What is first-party data? And how do you implement a successful first-party data strategy?
For years, brands and marketers have tracked user activity and behavior to tailor ad campaigns and shape communication strategies.
But as the capacity to gather more data has grown, so has customer distrust in how this data is used. This has culminated in a privacy revolution, one that has seen Google renounce third-party cookies, and increasingly stringent data privacy regulations such as GDPR coming into force.
Consumers today have unprecedented control over who they share their data with and how it is used. Explicit consent for data collection has to be earned, leaving companies to prove not only that they are being responsible with this data, but that they are providing something valuable in return – namely, engaging, personalized, and positive experiences.
First-party and zero-party data
Since brands and marketers still need audience insights to personalize content, offerings, and campaigns, there has been a shift away from third-party services and toward direct data strategies with clear consent management processes, largely using zero and first-party data.
Zero- and first-party data are two sides of the same coin in that the information is derived from audience interactions and transactions across a company’s own channels. There are, however, some differences.
First-party data comprises interactions on business platforms, such as customer relationship management (CRM) and point-of-sale data, together with online chat transcripts, social media conversations, purchase history, and demographic information.
Zero-party data comes from customers who actively provide a business with additional data and insights. This could be through a website form, for example, or a poll, survey, or membership application.
Whereas first-party data is derived from web activity that has to be subsequently analyzed, zero-party data is proactively given. But as opposed to third-party data, first- and zero-party data uses software and systems that are internal to the business, forgoing third-party intermediaries.
When used in tandem, first- and zero-party data can be used to develop audience segments into customer categories, which can be subsequently used to personalize products and communications.
Finding ways to motivate customers to share their information, however, is not always easy. Many businesses offer rewards in exchange for insights, such as premium content, exclusive offers, loyalty programs, newsletters, and e-books. All of these can be great ways to give back to consumers while encouraging them to share their interests.
Once a business has determined its specific value proposition, it needs to integrate an opportunity for the customer to supply their data seamlessly into their journey. Doing so can be tricky, but not impossible. Here are a few methods to try.
Registration
Registration is an easy way to acquire basic customer information such as name, interests, and geolocation details. Offering a discount on a customer’s first purchase can also be a great incentive to inspire new users to sign up.
Partnering with a platform such as Facebook or Google can simplify the registration process. While this does include a third-party service, users need to grant permission to share this information to access the website’s content, which makes it a first-party data source. It’s always good to give users the option to sign in as a guest, however – no one likes being forced to share data, and having a good experience can persuade uncertain customers to provide more information further down the line.
Interactive content
Using forms, surveys, questionnaires, and web requests are simple ways to build customer profiles. These might be triggered on the landing page or after a product purchase, which allows the customer to specify the type of product or service needed, or perhaps to give feedback.
It’s important to have a goal in mind when taking this approach. Questions around product preferences, budget, or buying tendencies can accomplish multiple aims and can empower a deeper understanding of what a consumer needs, wants, and what stage of the marketing funnel they are at. This in turn can be used to recommend the ideal product and inform future communications.
Interactive images also yield consumer engagement information without any additional effort on their behalf. SmartFrame’s technology allows users to interact with an image through functions such as Hyper Zoom and full-screen viewing, as well as lawful image sharing through a specific embedded link, and this information can be used to guage popularity and better inform brands of how users want to interact with their content. This also creates a better experience for the user as it allows them to engage with a brand in a way conventional images do not allow.
Enable content sharing and leverage user-generated content (UGC)
Users enjoy making and sharing content: it’s what the internet is all about. Making this part of a business strategy can be a cost-effective way to promote a brand and include the loyal customers who love it most. Furthermore, encouraging and involving consumers to be part of a journey lends content an extra layer of authenticity. Our recent article explained how to build an effective user-generated content strategy.
A stellar content strategy – including visual, written, and video content – also makes sharing easy. When properly analyzed, this can be used to reveal consumer interaction with a website or product, and the kind of content that is most popular. SmartFrame’s technology facilitates this through a sharing function, which is trackable, and measurable, and protects intellectual property by streaming the image from one central server rather than making it available to download.
Make customer feedback integral to the process
Consumers trust reviews. In a recent survey, 77% of consumers admitted to ‘always’ or ‘regularly’ reading reviews when browsing for local businesses, and 89% admitted they were ‘highly’ or ‘fairly’ likely to use a business that responded to all of its online reviews.
Customer feedback is a fantastic source of consumer insights as well as a chance to enhance everything from website functionality and user experience to the product offering. There are many strategic points along the journey where a quick feedback form might be appropriate, including post-purchase, after a repurchase, if a shopping cart has been abandoned, or following a referral or tag on social media. These answers can then be leveraged to be featured as positive reviews, or as a starting point for improvement.
Crucially, if giving reviews and providing feedback looks like a hassle, many consumers simply won’t bother. Providing easy links to follow, making it an optional step in the buying journey, using simple questions, providing prompts, and letting customers know how long the whole process takes will lighten the load. The key thing is to limit the number of clicks and redirects, which minimizes the time and effort required to write and publish the review.
Data follows trust
A business needs to inspire trust at every step of the way if it hopes to access any personal data. This involves being transparent about how and why data is being collected and making the benefits of sharing this data clear.
In short, a trustworthy brand experience must be a priority at every step in a customer’s journey. Once there is a deeper knowledge about customers, it’s important not to misuse this. Many consumers, for example, find retargeting creepy, and incessant marketing emails quickly fall out of favor. Responsible and respectful data practices are key to not only gaining new customers but to keeping loyal consumers coming back for more.
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