Building a first-party strategy: What is first-party data and how can it help your brand?

Data is what can make the difference between a “yes” and a “no” — but how do you gather data without overwhelming your customers?

Building a first-party strategy: What is first-party data and how can it help your brand?
Katie Metz // Adriana Lacy Consulting

Data drives decisions, especially if you're in the marketing world. Before you can convince your company to invest in an idea, you have to present some proof of its potential. Data is what can make the difference between a “yes” and a “no” — but how do you gather data without overwhelming your customers?

One method is first-party data. In this form of data collection, companies pick up data from social media, website traffic, and other direct interactions with an audience. Most of the time, customers have shared data without even realizing what has happened. First-party data allows companies to be first in line to gather up that data about their audience. The findings can be helpful for gaining a better understanding about customers’ needs and behaviors.

If you understand your customers’ behavior more, you can do a better job of meeting their needs. You can even help them solve problems they didn’t know they had. Another benefit is a greater opportunity for creating personalized experiences while interacting with your brand.

First-party data collection happens faster — and easier — than you think. Here are a few examples:

  • Online chat transcripts
  • Social media conversations
  • Subscription-based responses
  • Purchase history
  • Customer behaviors

The best part about this kind of data collection is that there is no interference. It is the most direct form of data collection, and it is very helpful for determining your next steps.

Data differences

We’re spending the bulk of our time talking about first-party data collection, but do you know about the others? Second-party data and third-party data are also collection methods for marketers.

CMSWire said it best: [First-party data] is the equivalent of getting information directly from a friend, whereas third-party cookie data equates to someone telling you about a person you don't know.

With second-party data, you didn’t gather the information yourself. Instead, you worked with another data collector who has a shared interest. They will also benefit from the insight. For companies, this can mean a company purchases data from another source. Again, they didn’t gather the data first-hand, but they are still receiving information about their customers. One benefit of second-party data is that it provides a fresh set of search criteria. For example, you may learn new details about your customers that you never thought to consider.

Third-party data is the most far removed from gathering data from your audience. In this case, the business that gathers the data doesn’t have a shared interest or a direct relationship with your audience. A lot of third-party data is collected in a random sampling. It takes away from the strength of directly gathering information from an audience.

Benefits of first-party data

When you have taken the time to study your audience, it pays off — literally. For some companies, it means more website traffic or views. For others, it can mean a boost in purchases. The top benefits are personalization and more targeted engagement.

  • Personalization: If you’re talking about your favorite television show on social media, companies are listening, too. From the tiniest details about your interests to clearly stated endorsements of shows or products, these specifics help companies personalize your experience. Streaming services, for example, have a front-row seat to your interests and can curate the best in-home watching experience — and that's all because you started talking about a character on one of your favorite shows.
  • Segmenting: When you take a look at your data, it won’t take long to see the different groups that make up your audience. This knowledge helps you tailor your campaigns in a different way. You wouldn’t send an email to a certain group if their data says they will be uninterested. Instead, you look for the group that would welcome your messaging. Why spend time and money on targeting the wrong audience? From ads to emails, segmenting makes a difference. Many companies rely on someone’s purchase history to help them determine which ads to present or product to highlight in a campaign.

Challenges of first-party data

The benefits of first-party data have captured the attention of many businesses, but there are challenges, too.

Gathering up data and storing it in one place is one of the first obstacles to tackle. Since first-party data comes from many sources, it involves teamwork and input from other departments. You may need data from the sales department who answered questions through an online chat. Marketers will then need to share what they have from their other sources. Once everything is put together, someone has to prioritize which data points make the most sense.

Another big issue: privacy. While gathering information is as easy as 1-2-3 these days, companies must keep in mind the rules and regulations created to protect individuals and their privacy.

While weighing the pros and cons of data collections, first-party data is the future way of staying connected with your audience, strengthening customer loyalty, and making sure your messages hits the right inbox every time.

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