In today’s data-driven world, companies collect vast amounts of data on their customers through various touchpoints. This information, known as first-party data, can provide invaluable insights into customer behaviour, preferences, and needs. However, many businesses fail to leverage this data effectively. We speak to the experts to discuss how to get the most out this data.
One: Collect clean data
The first step to getting the most out of first-party data is to ensure the data is clean and well-structured. This means collecting data from various sources such as websites, social media platforms, email marketing, and customer service interactions. Data also needs to be accurate and up-to-date.
Jane Stanley, CEO at Hearts & Science marketing agency, says many companies get caught out by having different legacy systems which do not “talk to each other” or do not allow a connected view of the customer.
This muddled view of the customer can also come from companies adopting a lot of deep data and tech infrastructure without truly knowing how to maximise it. “The practicality of being able to implement it in the organisation is actually a real challenge,” she says.
This can be due to a couple of reasons – one being not having the talent within an organisation to understand how to use the technology to drive the first-party data and two – organisational design.
Managing Director of Together Connect, Andy Bell, agrees saying that leveraging first-party data can require significant investment in both infrastructure platform and skillsets.
“We’ve all heard about the shortage of talent in a lot of areas. This is one of those areas as well where I think that will have an impact. There are so many different MarTech platforms that companies have access to. You need skilled people to actually operate those things in order to get the value.”
It’s also important to look at how data will be kept up to date Andy says. “It’s not something you do and then it stops.”
When collecting data, businesses need to think about what processes are in place to keep that data clean and up-to-date.
Two: Understand the data
The next step is actually understanding and analysing the data. Information with no context is not useful to anyone so investment in skilled talent to make sense of the data collected is important.
“You need data scientists and analysts who can generate insights from the data,” says Andy.
Having a clear data strategy that aligns with a business strategy and priorities at the top can help with this.
“It sometimes feels like those things get a bit out of sync. How does [the data] link back to our business strategy and where that’s heading? That’s important. It’s not just collecting data for data’s sake. It’s got to be actionable. What am I going to do with it?” says Andy.
Three: Respect customer privacy
It’s crucial to keep first-party data secure and compliant with data privacy laws. This includes implementing security measures to protect the data from cyber threats and ensuring that data collection practices are transparent and compliant with regulations.
Transparency establishes trust between the data collector and the data subject. By respecting privacy rights and providing transparency about how data is collected, stored, and used, individuals are likely to be more willing to share their personal information. This fosters a more positive and ethical data collection process.
According to Google’s 2023 Privacy Playbook for Privacy and Performance, 80 percent of consumers in surveyed countries are concerned about the state of their online privacy. However, more than 90 percent of consumers are willing to share their personal information for the right incentive, such as improved convenience. This drives home the importance that trust plays in the consumer/brand relationship.
“Two ways brands can help unlock first-party data are by delivering helpful experiences and creating fair value exchanges,” the playbook states. “These can be achieved by making interactions meaningful, memorable, and manageable.”
Four: Segment customers
Segmenting customers into different groups based on demographics, behaviour, and preferences is an important part of making the most of first-party data. By doing so, marketers can tailor campaigns and communications to specific groups of customers. For example, if you have identified a segment of customers who are interested in a particular product, you can send them targeted emails or social media ads promoting that product.
Although this too needs to be done with care, Jane says. “You’ve got to be really smart about how, particularly with first-party data, you segment. You don’t want become too narrow too soon, but you can use the technology to still be able to do those tests, and build your understanding.”
She says with this, common sense must play into it in New Zealand simply because “we just don’t have the volumes of data records to be able to really do that one-on-one targeting that everyone sort of dreams of doing sometimes”.
Five: Personalise communications
Personalising communications based on your first-party data can help to build stronger relationships with customers. By using their name, purchase history, and preferences in communications, businesses can make individuals feel valued and understood. For example, if a customer has recently purchased a product online, this is opportunity to follow up with an email thinking them for their custom and offer a discount on their next purchase.
This can lead to increased engagement, loyalty, and ultimately, sales. By using customer data to create targeted messaging and experiences, marketers can build stronger relationships with their customers and drive business growth.
This level of personalisation is something that customers have grown to expect and has potentially been exacerbated by the pandemic.
“Customer’s expectations of businesses’ abilities to use their data, to personalise, to customise recommendations, to do all those sorts of things, has been increasing,” says Andy.
Customers now expect that if a business has asked them for their data then it will be used in a way that will benefit them, he adds.
There is a line between being helpful and being creepy however and this line can be quite subjective so good judgement needs to be made here.
“Just because you can make it clear that you have the information and that you’re using it in this way, doesn’t mean that you should,” Andy says.
This article was originally published in the March/April 2023 issue of NZ Marketing. Click here to subscribe.
