Osh Rice, Managing Director at Daydot, breaks down what marketers need to get to grips with, sooner rather than later…
Obtaining insight about consumers, particularly knowledge of their behaviour online, is key to powering sales, marketing and CRM success. Brands need to know what draws them to websites and mobile apps, for example, and engage and spend via these channels. Only then can they deliver the necessary strategy to effectively target and engage with them.
However, it is well known that valuable third-party data on consumers is becoming increasingly hard to access. It started with GDPR and tighter restrictions on how brands can use, share and store customer data. Today, some popular browsers block third-party cookies and such data is about to get even harder to source from 2023, when Google is set to block third-party cookies from its Chrome browser.
With restricted access to third-party data it’s critical that brands make a concerted effort to collect first-party data. This is information a company has directly collected itself on a consumer. For a brand, this data could be personally identifiable information (PII) such as name, address, email and phone number. It could also be the technical identifiers such as cookies or mobile device IDs, as well as behaviour and engagement stats. This information could be gathered from sales, surveys, lead generation forms, CRM, call centres or analytics.
First-party data is so important because it’s the foundation of an omnichannel marketing strategy that can help brands to achieve very important objectives, such as customer loyalty, retention and upselling. It is critical for creating personal and meaningful customer experiences across multiple touchpoints, and therefore maximising customer lifetime value (CLTV).
How to build a successful first-party data strategy
Always create a roadmap for your first-party data. This requires defining your marketing and customer experience goals and objectives, along with the tactics and analytics required to execute on the strategy. Envisage how your cross-channel marketing capabilities will develop over time. Then break down the long-term effort into smaller projects that show incremental ROI at each stage.
Audit your first-party data sources to identify what data is being generated – remember it must be data that will help you meet your roadmap objectives. Then cross-reference these data sources and data points with the requirements of the marketing and analytics use cases you plan to execute.
If you can integrate off- and online first-party data into a company-wide customer data platform this will also help inform the delivery of customer-centric programmes that align marketing, product and service.
It’s important to benchmark and monitor your first-party data on an ongoing basis. Continually evaluate your data capabilities, monitor progress and integrate what you’ve learned at each step along the way. Identify key success metrics, both in terms of operational capability and support for cross-channel marketing initiatives.
Activating first-party data
Meaningful value exchange and trust is key
According to SmarterHQ, 90 percent of consumers are happy to provide first-party data if it will improve their experience. Therefore, to ensure you are able to continue to collect valuable first-party data it’s important to deliver a meaningful value exchange with consumers, through exclusive offers and loyalty programmes. So, when planning or reevaluating your first-party data strategy, an important question to ask is, “Have we made it easy for customers to see the benefits of sharing their data with us?”
Also, consumers are more likely to part with their data if they can trust it will not be misused. Brands must demonstrate they are responsible with data and have strong data governance procedures in place. By managing data properly and implementing processes that ensure data accuracy and integrity by protecting it against data breaches, for example, brands will not only have happy customers, but valuable data that can be used to improve the customer journey and drive engagement.
Align with customer objectives using qualitative insights
To effectively align with customer objectives, undertake first-party user research that delivers qualitative insights. It’s the best way for brands to understand exactly what issues exist, where users experience these problems, and inform the testing strategy needed to create a successful solution. It’s not enough only to have quantitative data. That can tell you only what customers are doing, not why they are doing it. Qualitative research fills in these gaps to better understand customer anxieties, needs and expectations.
Culture of experimentation
Brands must have a culture of experimentation within the business. Once you’ve determined which first-party data is most meaningful for you to collect, and how you’ll collect and manage it, then you can focus on how you’ll use first-party data to improve the customer experience. While many brands aim for one-to-one personalisation, the time and investment required to pull it off can be significant. A test-and-learn approach may be required to assess the level of personalisation needed for specific audience segments, to assess which activation type helps you achieve your marketing objectives.
Implementation and hybrid model
To effectively collect and analyse first-party data to help maximise CLTV, brands need to have the right team, technology and processes in place. When it comes to the team they need to be made up of data strategists, designers, developers and researchers.
Ideally, a hybrid approach is the best one to take when collecting and effectively using first-party data. This is where the brand takes data ownership and develops key capabilities related to data analysis and activation internally, and works with a trusted partner to fill any expertise gaps. An experienced third-party can help brands skip months of trial and error, and apply best-practice models and frameworks from day one that ensure first-party data is effectively used to drive growth.
All of which means...
By leveraging all of a brand’s first-party data to resolve customer identity, marketers can build a data asset that serves as the foundation for all consumer engagements across the web, mobile apps, stores, email, digital ads, call centres and beyond. Equipped with this intelligence, marketers can amplify reach across channels, build customer relationships, improve retention rates, drive brand revenues and maximise CLTV. To deliver on this in 2022 they need to understand the importance of a value exchange and building trust, experimentation, qualitative insights and the benefits of a hybrid model of working.
By Osh Rice