Discover the Power of First-Party Data
For years, marketers have turned to third-party data sources, investing millions of dollars in data about consumers assumed to be interested in their product to enhance targeting strategies. That’s fine if prospecting is your goal. But how are you marketing to the customers you already know?
Most marketers know that it is less expensive — and more profitable — to retain customers than to find new ones. Repeat customers spend 33% more with a brand than new ones. And just one-fifth of existing customers account for 80% of future profits. What’s more, these people who have previously interacted and transacted with your brand have given you the most precious of marketing assets: first-party data.
A Signal survey of U.S. marketers reveals that first-party data garners the highest return on investment of any data type.
However, many marketers lack the right technologies and data strategies to fully leverage its potential and turn to third-party resources to fill in the holes. While data from third-party sources can enhance acquisition strategies, it can’t explain a customer’s relationship with a brand and their path to purchase. Plus, there’s nothing unique to third-party data that can just as easily be sold to a competitor. And then there are the inherent issues to working with third-party data — quality, accuracy and recency, not to mention the expense.
In this age of consumer empowerment, creating the type of personalized and highly targeted experiences that drive brand loyalty and retention means being able to understand and respond to customer wants, needs and intent with 1:1 contextual relevancy. What better way than using the actual data that details every customer interaction with your brand?
It’s fresh. It’s free. It’s yours.
Tap Into Your Most-Trusted Resource
First-party data is the foundation for understanding your customers because it’s based on actual interactions with your brand across the vast array of consumer touchpoints, both historical and in real time, rather than the behavior of lookalikes that occurred weeks or months ago. It’s the data that a person entrusts to you, in exchange for your superior product or service. And it’s the only data that offers the types of insights and control you need to recognize, relate and respond to your customers in more meaningful and valuable ways.
While using first-party data to market to known customers is not a new concept for retention strategies, the approach for doing so is. Thanks to the evolution of customer identity solutions, marketers can now integrate all of a brand’s offline and online first-party data to reach and engage actual customers wherever they are in their decision journey.
As marketers increasingly adopt identity resolution as a strategic discipline, brands are expecting more from their first-party data. In our survey of marketers using at least two to three categories of data, two-thirds believe that first-party data provides the best path to consumer understanding and, therefore, performance. Not surprisingly, 82% of marketers state that they will increase their use of first-party data in the year ahead.
Nearly 75% of marketers cite first-party data as generating the greatest insight, with another 18% tapping into the first-party data of their trusted partners.
Take Stock of Your Resources
Today’s consumers interact with brands across multiple devices and channels, both digital and offline. It’s a complex and fast-changing landscape, with new touchpoints constantly emerging. But the important thing isn’t the number of channels you use — it’s creating better brand experiences that delight customers and drive them back again and again
The key benefit to all these touchpoints is that they allow brands to collect a wealth of data about their customers. This proprietary data can be connected to individual profiles to resolve identity and drive a deeper understanding of how consumers behave, what they want and where they are in their buyer journeys. To make the most of this data, marketers need to think strategically about their digital interactions, as well as the offline warehouses where they store information about their customers.
- Website: A company’s website can provide a wealth of data on site visitors, from names and email addresses to visitor behavior and transactions. Plus, there are additional behaviors that can be tracked (such as when users hover over text or images) for specific retargeting strategies.
- Mobile apps: App users are some of a brand’s most enthusiastic supporters — after all, they made the effort to download the app. To ensure useful data is being extracted from a brand app, marketers need to define which user events are meaningful and be sure to log and measure them.
- Email and SMS: Email offers data like open rates, click rates and bounce rates that date back to the beginnings of brand’s digital marketing efforts. Plus, the granular data on who is opening emails and whose interest is flagging allows marketers to segment audiences and run specific campaigns targeted to different levels of engagement. SMS data is similar: because text messaging is an intimate form of communication, customers who allow brands to engage with them via SMS show a high level of interest.
- Point of sale and CRM: This offline data may be a brand’s greatest source for online targeting and activation of its best customers — particularly, the level of personalization it affords by knowing a shopper’s purchase history. This data is also very useful for measurement and analysis: brands can see what’s selling, what’s not and where.
- Beacons: The next step for retailers, beacons yield new kinds of in-store and location-based customer data. Beacons offer enormous data potential, as they capture detailed aspects about a consumer’s behavior.
- Call centers: Sometimes the most important customer interactions happen at call centers. They are often where new accounts are initiated and where problems surface. While a brand may have invested in automation, systems and training to improve selling and service, the rich data being produced should not be overlooked.
See the Big Picture
For many marketers, customer insights are currently limited to one channel at a time. By integrating data from all touchpoints into a durable customer identity asset, marketers can understand the entire buyer journey, not just one part of it, and improve overall marketing performance. Here are a few ways how:
Improve targeting precision.
To achieve true addressability and targeting efficiency, marketers need to shift away from cookie-based tactics toward strategies that leverage a brand’s own first-party data to identify real people across devices and channels. First-party data helps marketers enhance accuracy and relevancy, reduce ad waste and, ultimately, drive ROI.
Map the customer journey.
By integrating and accessing first-party data from one customer identity asset, marketers can map the buyer journey, discovering the different steps that consumers take on their path to conversion as well as the order in which they take them. This, in turn, helps marketers deploy the right message at the right time and place, informing strategies to pull customers back on the road to conversion.
Create a single view of the customer.
Each customer is represented by multiple individual, anonymous profiles as they engage with a brand offline and online across the web, mobile apps, email, brick-and-mortar stores, call centers and other touchpoints. Merging these profiles into a single identity allows marketers to understand what inspires customers to take action across different channels, devices and platforms.
Advance omnichannel measurement.
By connecting data from all channels, brands can see how a customer moved from an email to a website to a mobile app before completing the purchase in store. With a complete view of this process and its many variants, marketers can segment and optimize for different audiences and guide behaviors that lead to conversion
Close the loop on attribution.
Insights from first-party data can be employed to influence media allocations and budgets. Understanding how each point in the customer journey affects conversion provides a more accurate way to analyze attribution and discover how budget shifts affect online engagement and in-store sales.
First-party data delivers the most accurate intelligence and inspires new ways to tailor messaging and shape the customer experience. Based on what a brand knows about its customers and their behaviors across touchpoints, marketers can design unique brand experiences customized to specific interests, preferences, location, purchase history and more.
Take Your First-Party Data to the Next Level
The path to getting more from your first-party data is clear. But being able to collect and react to first-party data about your customers wherever they are on their consumer journey is also a significant undertaking. Here are four key steps for taking your first-party data to the next level.
1. Create a roadmap for your first-party data.
First-party data is the foundation for a larger, omnichannel marketing strategy that can help brands achieve lower-funnel objectives, such as customer loyalty, retention and upselling. Define your marketing and customer experience goals and objectives, the tactics and analytics required to execute on the strategy, and create a roadmap for how your cross-channel marketing capabilities will develop over time. Break down the long-term effort into smaller projects that show incremental ROI at each stage.
2. Determine the right data sources and data points.
Audit your data sources to identify what data is being generated and how it’s being measured. Cross-reference your data sources and data points with the data requirements of the marketing and analytics use cases you plan to execute and make sure you collect the data that’s important to your objectives.
3. Demand more from your data.
First-party data is critical for creating personal and meaningful customer experiences in any given context. Integrate offline and online data into a company-wide identity asset to drive customer-centric programs that align marketing, product and service.
4. Benchmark and monitor over time.
Continually evaluate your first-party data capabilities, monitor progress and integrate what you’ve learned at each step along the way. Identify key success metrics for your solution, both in terms of operational capability and support for cross-channel marketing initiatives. Track data volumes, sources, processing speed, profile depth and which data is activated for analytics and measurement.
Build a Foundation for Long-Term Success
Third-party data isn’t enough anymore. Brands are realizing the limitless potential of first-party data for driving marketing success. In Signal’s study of data usage among marketers, more than 80% plan to increase their use of first-party data, and they consider it the lynchpin of their data-driven strategy for the future.
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 centers and beyond. Equipped with identity, marketers can amplify reach across channels, build customer relationships, improve retention rates and increase brand revenues.
Sure, staying on course with today’s consumers is challenging as they hop from one channel or device to the next. But with the right technology and a customer identity strategy rooted in first-party data, you’ll discover the most direct route begins and ends with the data you already own.