What Is First-Party Data And How To Use It?
- Categories Business
- Date 3 July 2023
What Is First-Party Data And How To Use It?
In the realm of marketing, first-party data is an essential tool that allows companies to collect user data without relying on third-party cookies.
As concerns for user privacy led to the demise of third-party cookies, marketers find themselves facing a new hurdle—how to gather valuable customer information. This presents a significant challenge for organizations that heavily relied on cookies to not only advertise through digital channels but also track user behavior.
However, amidst this transforming landscape, innovative approaches are emerging to tackle this challenge head-on. In this blog post, we will explore the exciting possibilities that lie ahead for marketers in capturing customer information while maintaining privacy and adhering to regulations. Let’s dive in and discover the new horizons of customer data acquisition!
What Is First-Party Data?
To put it simply, the company becomes the first party that is collecting information from the consumer.
First-party data is the valuable information that a company collects directly from its customers and has full ownership over. It serves as a crucial piece of the data puzzle available to marketers, offering the potential to enhance and complement other data sources. Additionally, it also minimizes the reliance on external data. First-party data can include the following:
- Demographic Information: Age, educational background, employment status, and marital status.
- Interests: Specific products that individuals prefer, categories of products they are interested in, preferred marketing materials they respond to, and the type of content they engage with.
- Location: Where individuals live, work, or where a business is located.
- Purchase History: Individual products purchased, bundles or packages they have bought, subscription services they use, successful instances of cross-selling or upselling, the overall value of their purchases, and the duration of their customer relationship.
- Loyalty Program or Membership Status: The tier or level a customer has achieved within your loyalty program, as well as the length of time they have been a member.
- Coupons: Customers use of coupons.
- Social Media: The primary platforms where customers are most active.
By tapping into the power of first-party data, marketers can unlock a horde of insights that fuel their strategies and drive meaningful connections with their target audience.
How To Collect First-Party Data?
There are some sources that help you collect first-party data from the customer interactions. They are:
- Website: Customer activities while on the website like time spent, product purchased etc.
- Mobile app: Comparing website and mobile app analytics to see which one performs better.
- Email or SMS: Customer interactions with your messages.
- POS Systems: Point-of-sale systems collect everything about consumer purchasing history.
- Beacons: Discover untapped customer data from in-store and location-based interactions.
- Call Centers: Initiate new accounts and address customer concerns effectively.
How To Create A First-Party Data Strategy?
Developing a first-party data strategy entails crafting a robust plan to facilitate the gathering and utilization of customer information directly. Basically, this is obtained through your owned channels with their consent.
In simpler terms, it involves designing a roadmap to effectively collect and leverage the data that customers willingly share with your business.
1. Determining your goals
This crucial step allows you to create a comprehensive plan with measurable objectives, outlining the specific data you need to invest in, as well as how you’ll collect, analyze, and utilize it effectively.
2. Obtaining the right data
Fortunately, there are numerous channels available for acquiring first-party data, such as your website, mobile app, CRM, loyalty program, email marketing channel, and call center.
As consumers become increasingly cautious about sharing their data, it is crucial to prioritize consent management and maintain strong data governance practices. By demonstrating responsible and respectful treatment of their data, your brand can build trust and encourage shoppers to willingly share their information with you.
3. Utilizing your gathered first-party data effectively
You can implement the collected first-party data in various ways. Determining the eligibility of individuals for specific customer segments, such as VIPs or loyal customers comes first.
Alternatively, you can also analyze the insights derived from your first-party data to gain a deeper understanding of how shoppers engage with your brand. Armed with this knowledge, you can then embark on crafting more personalized experiences across your emails, website, and advertisements.
4. Creating an analytics plan
Before anything else, establish clear metrics for gauging success not only across different channels where your data is applied but also for your overall data strategy. By proactively determining the means to measure your progress, you can assess the effectiveness and impact of your first-party data-driven initiatives.
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