We use cookies. You have options. Cookies help us keep the site running smoothly and inform some of our advertising, but if you’d like to make adjustments, you can visit our Cookie Notice page for more information.
We’d like to use cookies on your device. Cookies help us keep the site running smoothly and inform some of our advertising, but how we use them is entirely up to you. Accept our recommended settings or customise them to your wishes.
×

Making Use of First Party Data in Delivering a Total Customer Experience

The Importance of First Party Data

In 2017, The Economist stated: “The world’s most valuable resource is no longer oil, but data.” This rings true, especially in a post-GDPR world, where the importance of first party data in digital media has become increasingly apparent with less reliance on third party data sources for media targeting. First party data enables basic digital marketing requirements such as audience segmentation and retargeting, additionally, it unlocks more advanced uses such as cross-channel targeting, decisioning and personalisation, all of which enables companies to deliver a better customer experience.

Whilst third party data still has its place in digital marketing and is useful in reaching a broader audience, it is often anonymous, aggregated and can be considered ineffective, especially with rising data privacy concerns with regards to data collection. Additionally, the growing trend towards delivering a total customer experience means this is something third party data cannot deliver alone. This is where first party data comes into the spotlight – it’s unique to the company, it’s the company’s own data, it’s less costly and it can provide a competitive edge, provided its used effectively.

First, second and third party data


Making Use of First Party Data

A survey conducted by Harris in 2019 found that consumers are less accepting of impersonal or irrelevant communications delivered by companies. In fact, they found that 63% of consumers expect personalisation as a standard service and for a company to keep up with every stage of their journey through providing tailored, relevant and personal interactions. This means companies need to be able to contextualise a customer or prospective customer’s interactions – understanding the past, present and predicted actions – in order to deliver a total customer experience. This can only be achieved with a robust data strategy, effective use of first party data and alignment across consumer touchpoints.

It’s easy to jump in at the deep end when considering how to deliver the total customer experience, but it’s important to take a step back and first ensure there is a solid foundation to build upon, so what better place to start than with first party data? This data is directly collected by the company on their customers and prospects and can come from a variety of sources – web analytics, customer database, consumer surveys, digital marketing channels etc.

First party data alone presents a multitude of opportunities within digital media:

  • Segment audience to enable tailored and relevant content to be delivered
  • Identify customer value and define a communications plan for effective customer engagement
  • Use high value customers as base for lookalikes in media targeting
  • Employ A/B testing to optimise on-site experience
  • Draw behavioural insights from data to inform digital media strategy
  • Understand optimal channel mix to achieve media efficiencies
  • Use machine learning to build models to predict customer/prospect actions
  • Build decisioning models to determine next best actions

Making use of this data in a consistent manner across all consumer touchpoints is a key step in the right direction to building a total customer experience through ensuring a customer-led approach, rather than channel-led.

Barriers to Using First Party Data

For many companies, one of the main barriers to effective use of first party data is data siloes – in many cases, different tools, systems and teams simply don’t talk to each other to share information. Overcoming this barrier is often seen as a holy grail of sorts – a single customer view – a complete, holistic, deduplicated and actionable view of customers. The focus should be on joining up first party data sources before expanding the single customer view to potentially incorporate second party data sources to paint an even broader and complete picture of the customer. For example, an FMCG client has a data partnership with a retailer, providing them with sales data they can act upon using digital marketing.

Through building a well-rounded picture of customers, this can result in a much deeper understanding of the customer and enable better execution of the customer experience. A 2020 study by BCG found that companies who link together first party data sources and make use of this in media campaigns can generate double the incremental revenue on a single ad placement, in addition to also improving cost efficiency 1.5x more than companies without this integration. Therefore, whilst it can be a lengthy, often times frustrating process, first party data integration can bring a whole host of commercial and customer benefits.

Inputs and outputs of a single customer view

Privacy Concerns

In a world post-GDPR, there are of course many considerations that go hand-in-hand with using data. There are several restrictions on how first party data can be used, all of which require explicit permission from consumers to enable. The 2020 BCG study found consumers are much more likely to share data with companies that they trust and are happy for their data to be used in a way that would benefit them, as long as the company communicates how they intend to use the data in a clear, simple and transparent nature. Ultimately, it’s about a value exchange – consumers gain more relevant, tailored information and offers and the company gains data to enable better delivery of customer experience.

What Next?

How can you start making use of your first party data to deliver that total customer experience? The key thing is to start simple:

  • Establish what first party data is available and if there is a single customer view
  • Understand what opportunities the current set up can enable
  • Build an audience strategy to enable a targeted, relevant and consistent approach that can be activated across all relevant channels (media, CRM, on-site)
  • Develop a communications plan based on the audience strategy to enable a starting point for delivering a total customer experience

With investment – in time, resource and technology – you can begin to build on this simple foundation by layering more data sources to create a holistic customer view to enable more sophisticated processes to take place to drive a seamless customer experience.

To discuss more about how we can help you get started, please reach out to one of the team.

Join the Discussion