5 Steps to Build Your First-Party Data Strategy
Google reveals that 89% of successful businesses say anticipating customers’ needs and providing assistive experience along the customer journey is crucial for growth. It further states that 92% of leading marketers believe using first-party data continuously will help businesses understand what customers want.
Today, many thriving organizations don’t build their brands based on guesswork but with actual, reliable data. Think of the personalized experience on Amazon or Spotify. Or the customized recommendations you receive on Netflix or YouTube. Many of these tailored experiences didn’t happen with the marketing team guessing what you want as a user but understanding your wants and interests through an accurate, first-party data strategy.
So, suppose you want to satisfy your customers in a market where 63% of buyers expect personalization from brands, yet 72% would stop using a service because of privacy concerns. In that case, you must adopt a practical first-party data strategy.
Unsure of where to start? This article will help. It contains a simple, step-by-step guide to building a successful, first-party data strategy.
Let’s check it out.
What is a first-party data strategy?
In the most basic form, first-party data is the information you collect directly from your customers. While a first-party data strategy is how you plan to use this information to reach your marketing goals.
Why first-party data and not the widely used third-party data for marketing purposes? Google has disapproved of third-party data because many consumers feel insecure online, leading to a lack of trust. Current research shows that 72% of users think advertisers, companies, and technology firms track most of their activities online.
So, to build a privacy-first web, Google is deprecating third-party data (information collected by a third party and shared with you) and encouraging businesses to adopt a first-party data strategy.
While third-party data is more extensive, it is often insufficient and breaches consumers’ privacy. The first-party data strategy contains the information you gather from your users directly with their consent. This makes it a more reliable, privacy-first approach to gathering consumers’ data.
Primarily, you can source first-party data from websites, applications, product reviews, social media platforms, etc. This type of information includes the following:
- General information: Name, location, email address, etc.
- Purchase data: Invoices, receipts, etc.
- Demographic information: Age, gender, employment, income, etc.
- Tracked details: Comments, content downloads, etc.
The ultimate guide to creating an effective first-party data strategy
A working first-party data strategy isn’t just collecting consumers’ information across the web. It requires proper planning and the right tactics. Here’s how to build a first-party data strategy that works:
Define your business’s objectives
First things first, define your goals. Your customers will be willing to give you tons of information about them if they trust you. However, the only details that would work for your strategy are the one that fits your business’s objectives.
So, identify your goals before gathering first-party data for your brand. Do you want to make better recommendations? Discover why shoppers abandon their carts? Spend less time on your website or subscribe to a service more than others? Your objectives could be short or long-term.
Regardless of your goals, identifying them will be the roadmap that guides you on what information to request and the best platform to source the data from. It will set you on the right track so you don’t channel your efforts into collecting irrelevant information. So, figure out your goals and identify the most critical consumers’ information required to help you achieve them.
Map out consumers’ journey
One of the most significant purposes of a first-party data strategy is to improve consumers’ experiences. However, you’ll have to understand your buyers’ journey to do this. Highlighting their process will give you insight into what data to collect and how to implement this information to enhance their experience. So, create a visual story of user experiences with your brand. Step into their shoes, and see from their perspective.
For instance, what are the possible ways a consumer can get to know your brand, and what happens after? If they notice your business on social media, do they check out your website next? Go through the product section and click the “BUY NOW” button? Or do they sit back and observe your brand on social media to see if you are credible?
There are five common digital touchpoints: Awareness, engagement, conversion, service, and loyalty. Your aim at this stage is to identify where a customer begins their journey across the digital touchpoints and monitor their progress.
Understanding what stage each consumer is on their journey will guide you on the most appropriate information to request. You can then target this data to facilitate their journey across these digital touchpoints. This results in a positive experience that provides an 80% increase in revenue.
Collect first-party data appropriately
After you’ve identified your goals and highlighted your consumers’ journey, you will have a clear idea of the type of data to gather.
However, you must collect consumers’ information with the right approach to comply with privacy policies and gain users’ trust. To do this, create a transparent data collection process. Boston Consulting Group (BCG) in Responsible Marketing with First-party Data states the three practices to follow when collecting consumers’ information:
- Visible: The best data collection process is transparent. It doesn’t conceal banners and allows users to withdraw their permissions whenever they want.
- Candor: An effective data collection activity is open about what information to collect and the purpose (s) of gathering the data.
- Value: It highlights the benefits of collecting user data. It may include seamless transactions, better product suggestions, etc.
Create an efficient data management system
After gathering customers’ information, the next big step is to store and manage them efficiently. Data privacy best practices aren’t limited to data collection; it involves storage and management too. So, an error at this stage could lead to data loss, and other forms of attack, putting your organization at risk of non-compliance penalties.
Therefore, adopt the following component to establish a secure data storage and management process:
- Consent management: Seek users’ permission before collecting or using their data. Also, that a consumer gives you their information doesn’t mean you can use it for any purpose. Some uses may be acceptable to buyers while others may not. So, check in with every consumer on your goals before you implement their information.
- Deterministic identity solution: If customers engage with your brand through one digital touchpoint, their preferences link to a device-level identifier. However, you must be able to connect device-level data to a central customer profile if you realize buyers interact with your business across different touchpoints.
- Data storage: Store consumers’ data securely. Use cloud-based customer relationship management tools. Also, set up an efficient backup system to prevent data loss and adopt practical security tools to mitigate attacks.
Test, visualize, and measure
Now that you’ve gathered your consumer data and stored it correctly. It’s time to test, observe and track improvement. Introduce the first-party data you’ve garnered into a segment of your marketing approach for testing. For example, if most of your customers say they prefer check-out forms to detailed check-out records, shorten the forms by streamlining the requested information.
Afterward, observe to see if there’s an improvement in the check-out experience. Is there an increase in the number of shoppers completing the check-out process? Are they leaving positive reviews? The answers to these questions will let you know if your first-party data strategy will be effective.
Additionally, identify the areas that need improvement and figure out the metrics you’ll use to track your data strategy performance.
Visualize data to discover errors and inadequacies, and forecast possible outcomes. Then, adopt accurate reporting tools, and decide how frequent periodic check-ins will occur. Doing this will help you manage your data strategy effectively to get the results you want.
Best practices to adopt when building your first-data strategy
There are certain practices you must adopt to maintain a successful first-data strategy. Let’s examine them below:
Use first-party cookies
Now that many businesses adopt a privacy-first approach, third-party cookies are out, and first-party cookies are the new, cool kids on the block. They are codes created and saved on a website users’ system to monitor their activities with your business. They include passwords, number of visits, websites’ behavior, etc.
Unlike third-party cookies, first-party cookies track the activities on your website alone; they don’t monitor visitors’ activities on other websites. This allows you to protect your consumers’ privacy and access accurate data relevant to your business.
Invest in a consumer data platform
You are likely to source your first-party data from social media, websites, emails, surveys, etc. So, you’ll need a customer data platform (CDP) to compile and organize the data in a centralized system. Doing this will enable better accessibility, allowing you to find, and implement information efficiently.
Also, you can integrate the data into your marketing software seamlessly when you have all the information you need in one place. As a result, you can implement your first-data strategy into your marketing plan to boost your customer experience and grow your business.
Conclusion
First-party data is the most acceptable approach to gathering consumers’ information for companies seeking to promote privacy and grow their business. This article discusses five critical steps to creating an excellent first-party data strategy. Use the information provided in this article to set up a successful first-party data plan that moves your organization forward.
