We’re in the era of growing data privacy concerns, and people are no longer willing to sacrifice their data for convenience. Salesforce's State of the Connected Customer reported that 64% of consumers now take online privacy more seriously than they used to, and 79% are more likely to trust a company with their information when the policy is clear and upfront.
Here is where first-party data becomes extremely valuable. A first-party data strategy won't be successful unless the data you're collecting from your customers is gathered with focus on customer consent and transparency and it is compliant with data privacy laws. This way, customers can be sure that their personal data is being used in the way they want it to be used.
What Is a First-Party Data Strategy?
A first party-data strategy is an essential part of any marketing effort. It can help you understand your customers by gaining insights into customer behaviors and preferences, create custom content, track, and target more granularly your marketing efforts. It also requires acting and planning around the data that is collected and stored from your customers. Here are some recommendations on how to get starting on a strategy:
1. Understand the data
Collecting without a clear roadmap is not beneficial for your business. First you need to have a foundation for understanding what you are looking for. Set clear marketing and customer experience goals and objectives and define what type of data you want to collect.
2. Plan for data storage and management
Your customer data may be spread out into different systems. You need to plan for how to connect all these systems and store the data in a way that helps you build a single customer view into a centralized system such as a customer data platform (CDP) or a customer management system. Find a platform that helps you to bring together this data and make sense of it. You’ll also want to consider the security of the data you’re collecting from your audience.
3. Create customer profiles
Understanding how customers behave and interact with your products and services will help you to create a more unified view of a single customer. Use the data from one or more of your customers to create a map of the customer journey, this will help you target the right message at the right moment.
4. Use data analysis to improve customer experience
Gather patterns and unique insights about a customer’s journey with the data you collect. Find commonalities, customer behaviors and preferences in the data that would help you get a better understanding of who your customers are, their needs and how to better serve them.
5. Enhance AI chatbots and automation actions
Leverage your first-party data with AI chatbots. This data can be extremely useful to inform your conversational AI strategy as it can help create more relevant experiences for your customers when they interact with your company via engagement channels such as live chat or messaging.
6. Personalizing your messaging
The data you collect from your customers is unique to your business. There is a great advantage of using it to personalize experiences for your customers. For example, as Neil Patel describes, you can use first-party data to make more personalized ads, email marketing campaigns and product recommendations.
Sources of First-Party Data
Now, let’s look at the type of information you may collect. You can gather a wide variety of data, which is important for businesses regulated by the financial conduct authority. This is what will empower you to segment your audience, personalize messaging and have more impactful engagements with every site visitor. These are some examples of what first-party data can look like for your organization.
Demographics
Demographics like age, gender, and location are a key part of many first-party strategies. For example, if you're trying to reach a younger audience, you might decide to focus on gathering the email addresses of college students.
Purchase history
If you offer multiple products or services, you can use first-party data to track which products customers have purchased in the past. This information can help you upsell or cross-sell complementary products.
Their purchase history can also indicate their interest level and engagement with your brand. For example, if someone has only purchased one item from you in the past, they may not be as engaged as someone who has made multiple purchases. A strategy in place could be applying a loyalty program for those who have made multiple purchases to help increase customer retention.
Website activity
Another crucial piece of first-party data is information about how customers interact with your website. This can include things like the pages they visit, the products they view, and the searches they make.
This data can help you understand what customers are interested in and where they tend to get stuck on your website. If your bounce rate is high, you might need to rethink your website's design or navigation, or your content strategy.
Sales interactions
Whenever a customer interacts with your sales team, there's an opportunity to collect first-party data. Apart from gathering consented personal information such as email, name, and phone, it can include key information about the products they're interested in, their budget, pain points and needs.
Customer feedback
Finally, first-party data can also include feedback from customers. That could be as simple as a rating, review, or survey response.
By gathering this information directly from your customers, you can gain valuable insights into how they experience your brand and think of your products and services. You can even ask them for suggestions on how to improve.
How Do You Gather First-Party Data?
Knowing what first-party data is and what it does for your business particularly if your website is subject to data protection regulations are good first steps. However, before you can leverage this information, you need to know how your company can get it.
Surveys
The best way to gather first-party data is through a simple survey. Whether it's an email survey, a pop-up on your website, or even a phone call, this is one of the most transparent ways to collect customer information.
One key thing to remember with surveys is that they should be short. No one wants to fill out a long, burdensome survey, so try to make yours as concise and easy-to-complete as possible.
Online forms
Another way to gather first-party data is through online forms. They could be something as simple as a sign-up form on your website or a contact form for customer support. Online forms are a great way to collect simple information like names, email addresses, and phone numbers from customers. To ensure compliance and gain trust, make your consent statements easy to understand, especially if your business is authorised and regulated under data privacy laws.
Analytics
Numbers don't lie, and there are a lot of great analytics tools that can help you track the performance of your website. Google Analytics is one of the most popular options, as it's both powerful and free.
Site tracking
When you need a more advanced way to track your website visitors, then a visitor monitoring tool is the answer. Velaro's software can monitor customer behavior. Everything from website activity and navigation patterns to in-depth demographic information about your customers.
Plus, with Velaro's live chat features, you can engage with your website visitors in real-time and collect first hand feedback about their experience.
How Do You Enrich First-Party Data?
Once you've collected this first-party data, it's essential to know how to enrich it. More simply put, you should have a method in place to give context to the points you collect. This will help you get even more value from the information you've already gathered.
One way to do this is through predictive analytics. This uses machine learning and advanced algorithms to analyze your customer data. That way, you can predict future customer behavior. You can do this by creating visualizations with your data, using machine learning to better understand consumer actions, or running statistical tests to draw conclusions about what you collect.
The Role of a Successful First-Party Data Strategy in the Customer Journey
First-party data is essential for any successful marketing or sales strategy, as it can help you understand your audience and the customer experience they want. It opens the dialogue between customer and company, which is essential for conversion.
It can also help you segment your customers based on their needs, interests, and budget. This allows you to create more targeted marketing campaigns and reach out at the right moment during their customer journey. This is going to become more and more important as your customers’ expectations for personalized marketing efforts continue to increase.
Whether you're looking to build targeted campaigns, improve customer relationships, or prevent churn, using first-party data is the key to getting the most out of your marketing efforts.
