You’ve got data. A lot of it.
Whether you know it or not, you’re collecting a ton of information from your customers and potential customers. You know what products they’ve bought, when they bought, when they last opened your email newsletter, the last page they browsed on your ecommerce site, their favorite social channel, and so on. As a marketer, you understand why you’re collecting the data, but what are you doing with it?
Probably not enough.
In fact, fewer than a quarter of marketers are extremely satisfied with their ability to use customer data to create more relevant experiences. And 54 percent of marketers are only using half of their customer data.
But instead of focusing on cleaning up the data you already have, many marketers may opt to buy third-party data from data providers, convinced that this is the magic solution to all your data woes. Or you decide to invest in predictive analytics which you think will fix everything instantly.
While second-party data and third-party data have their place, and predictive analytics are cool in theory, it all comes down to the accuracy of your own customer data. Without a solid first-party data set, you can’t feed the algorithms that power predictive and you have nothing to augment with third-party information.
By focusing on the data that you collect right now — first-party data — you can power your B2C marketing, acquire new customers, and significantly improve the customer experience. Here’s how.
What is first-party data?
So what do we mean when we say first-party data?
First-party data is the information you collect on your customers throughout the buying process. This data is owned by your business and provides insights into the habits of your customers.
You’re probably collecting first-party data from a variety of places, including:
- A Customer Relationship Management platform (CRM)
- Ecommerce platform
- Email marketing solution
- Ecommerce website
- Social media channels
- …and more.
This information might cover basic demographics like name, age, location, phone number, and email address, and also include details like purchase history, browsing habits, interactions with your company, and social media data.
To make the most of this data, you can’t let it just sit unused in each of these platforms. You need to unify and centralize it so you can get a single view of your customer. With all that data in one place, you can better understand how customer behavior impacts their purchase decisions. (More on this later.)
What are the advantages of using first-party data?
You’ve got all this information just (virtually) sitting there ready to be used. And, if you treat the information in the right way, you can continue to collect more. In fact, 63% of Millennials, 58% of Gen Xers, and 46% of baby boomers are willing to share their information to receive personalized offers and discounts.
But only 28% of digital marketers are using first-party data across all of their paid media channels and in ad campaigns. It’s a massive missed opportunity.
Here are the reasons why you should harness the power of your first-party data to boost your marketing ROI.
1. More reliable and relevant information
If you rely on first-party data, you as a marketer have the power to decide the customer information you want to collect and analyze based on your business’ specific marketing and business goals. No one knows your customers better than you, and so the data and insights will be specific to your customers and prospects. In comparison, third-party data only provides insight into general segments, or what other people have deemed to be important. You can also regularly update this data on a real-time basis as new information comes in, instead of having to work with a static list of information.
Another benefit of first-party data is that you know its source and how it was obtained (i.e. with the consumer’s consent) so there is no gray area or issues with privacy laws.
2. Breaking down the barriers with identity resolution
One of the problems marketers run into is that their customer data in generally siloed in either their ESP, ecommerce platform, or social media channels. Generally, these systems don’t talk to each other. One customer may have 3 to 5 profiles in your systems, making targeting customers at the right stage difficult. This is where a CRM built for ecommerce can connect the dots and make sense of all the ways a customer interacts with your brand. With identity resolution, these systems can talk to each other, so marketers can stitch together first-party customer data into one, definitive customer profile.
Now that you’ve unlocked the key to understanding how customers interact with your brand, taking a targeted approach allows you to add effective personalization to your marketing, pushing upsells and cross-category offers that will go a long way to increase your repeat purchase rate.
3. Ability to create highly personalized experiences
Now that we have this valuable first-party data and we know that the insights are tied to our specific business goals, we can build out more granular segments and communicate with customers on an individual level. It’s no mystery that personalization drives engagement, and by being able to segment your customers however you want based off of their interactions you can always be relevant to your buyers. This then improves the overall customer experience — which is what it’s all about!
With first-party data, you can also have a better idea where people are in the customer journey. This is where you can act on the insights you uncover, which means you can serve up content or offers that are better suited to their place in the buying cycle.
4. Scale and expand to find new audiences
Your first-party data is not finite and limited. It’s merely the starting point for finding more consumers who have similar profiles to certain segments, and then including them in the segment. Using the up-to-date, reliable, and accurate customer segments you’ve already created, you can use tools like Facebook Lookalike Audiences to find new markets for your ads.
First-party data is really the core of your marketing and can help you become more relevant and useful to your buyers by serving up more personalized communications and experiences. The good news is, you probably already have the data sources you need in right now! It’s just a matter of unlocking the insights and learning how to use your first-party data effectively, and you too can power your B2C marketing like never before.