What Marketers Need to Know About a First-Party Data Strategy

Your customers are the best source of information about what they want, need, and expect from your brand. That’s why first-party data marketing should be the core of any marketing strategy. It relies on the information you collect directly from customers like their purchase history, website activity, and interactions with sales and service teams. To be most useful, this information needs to be organized so it’s easily accessible to your sales and marketing teams.

First-party data has always been a high value resource for marketers looking to connect with shoppers. But recently it’s become even more essential due to an increasing focus on data privacy in the U.K. and U.S. that has triggered a decline in the use of third-party cookies. Creating a first-party data marketing plan keeps your business in compliance and reassures customers that you’ll protect their privacy.

This guide will help you understand what first-party data is and how it can be integrated into your marketing strategy. Along the way, we’ll explore the whole array of data sources available to marketers. Read on to start optimizing the way you collect and use data in your business.

What is First-Party Data Marketing?

First-party data is the data you collect from customers on your own channels, most often your website. Depending on the tools you’re using to monitor website activity you may be able to tell: 

• The pages a customer has visited
• How long they spend on each page
• Which items they viewed
• Whether they clicked on any offers
• Whether they’re a new or returning customer
• What they purchased
• Whether they engaged with chat, filled out a form, or contacted customer service

First-party data marketing uses this kind of information to inform subsequent marketing efforts. For example, you may send a follow-up email or direct mail postcard to a returning customer visiting your website for the first time in six months. The more detailed the information you collect, the more tailored your marketing efforts can be. 

For specific guidance on how to develop your first-party data strategy, get our Practical Guide to First-Party Data. 

Benefits of First-Party Data Marketing

First-party data offers more accuracy and reliability than other data sources. With first party data marketing, you can be confident that you’re centering your efforts around what the customer actually wants and needs, because the information came directly from them. It hasn’t been filtered through a third party. 

This accuracy empowers you to build direct customer relationships. It shows customers that you care about their needs and preferences. You won’t waste their time with irrelevant offers. You have what they need and you’re able to give it to them.

At the same time, marketing that relies on first-party data respects customer privacy. It allows you to be transparent about where the data came from and how it will be used. It also gives customers a sense of control, since they can choose what to share and what to hold back. A first-party data strategy, combined with transparent messaging around how data is used, can build trust between the company and the customer. 

When used proactively, first party data can empower your business to deliver attractive offers to customers in real-time. Tools like Ignite by Launch Labs allow you to immediately leverage first-party data to show the information and offers most likely to be relevant to the customer currently visiting your site.

Data-Sources Explained: First-Party Data vs. Second-Party vs. Third-Party Data vs. Zero Party-Data

Although first-party data has many strengths, most businesses do not rely on it exclusively. Instead, they build marketing plans based on a combination of several data sources. 

• First-party data - collected from customers of a business through channels run by the businesses e.g. websites, email lists, CRM. This information is accurate, but limited to customers who have visited the business site or otherwise engaged directly. It also requires an investment in technology to do well.
  
  
• Zero-party data - proactively shared with a business by its customers. This could come from forms, surveys or direct contact with sales and service teams. This information is often very accurate, but a relatively small number of consumers have the time and trust in the company enough to share zero-party data.
  
  
• Second-party data - first-party data belonging to another company and shared via a business relationship. For example, the data Kelley Blue Book shares with its advertisers about its users is often second-party data. This information can widen the pool of data available to a business, but privacy and transparency concerns must be carefully considered.
  
  
• Third-party data - collected by entities that do not have a direct relationship with the consumer. For example, a data aggregator may collect information from public records, websites, and surveys and sell it to businesses for use in marketing. This information widens the pool even further, but the data is sometimes inaccurate or flawed, and privacy concerns can be even greater. You can increase the accuracy of third-party data by matching it against existing customer records.
  

‍

A first-party data strategy should not be a first-party-data-only strategy. Using all of these sources of data thoughtfully to supplement your first-party data strategy can help you offset the weaknesses and maximize the benefits of each one. 

Ways to Optimize First-Party Data Marketing

Any marketing strategy comes with challenges. Some are unique to first-party data marketing, others are simply the result of collecting and using data. Fortunately, the right strategies can help overcome these challenges and even turn them into strengths. 

Lack of data management or suboptimal storage can create data silos that keep data confined to one part of the business, limiting its usefulness. 

Solution: Centralized identity graphs and an integrated CRM can make data available to all departments including marketing, sales, and service. This also minimizes the chances of duplicate profiles being created. With centralized information, you have clear, accurate details on which to base your marketing decisions.

First-party data is limited in volume, especially for small businesses.‍

Solution: supplement first-party data with second- and third-party data to expand scope, and implement the right technology to make sure you’re collecting all available first-party data. A supplemented approach makes your first-party data marketing even more effective.

Data privacy regulations are always evolving

Solution: stay informed on data privacy laws and best practices and partner with businesses that share your commitment to privacy and compliance. This is essential no matter what data strategy you’re using.

Collecting first-party data on your website requires the right technology.

Solution: some businesses rely exclusively on Google Analytics to collect data about how customers interact with their website. This is a start, but it’s probably falling short of your site’s real potential. Purpose-built first-party data marketing tools like Ignite by Launch Labs can help you collect, combine, and use data in real-time to maximize the potential for conversion. 

Strategies for Collecting First-Party Data

The first step in first-party data marketing is collecting the data. This can happen in a variety of ways both on your website and through other platforms both on and offline. Here’s a quick look at some of the places and ways you may be able to collect first-party data. 

• On your website - historically, businesses used cookies and tracking pixels to collect data on websites. Identity resolution takes things a step further by recognizing new or returning users and building an identity graph for each one.
  
• Email marketing - patterns of opens, clicks, and engagement with email marketing are also first-party data that can be used to inform marketing and enrich your identity graphs.
  
• Purchase history - integrating purchase history information from your CRM or sales team tells you what customers have bought in the past and enables you to make predictions about sales and service needs for the future.
  
• Offline sources - events, point-of-sale systems, and service center interactions are all rich sources of first-party data as well. Make sure this information is entered into your CRM or other centralized data collection system. 
  

If it isn’t already clear, first-party data is most useful when it is centralized. Businesses need technology and processes that help them to collect data into one centralized location. 

Best Practices for Safe and Effective Data Collection 

Collecting and using customer data means your business is subject to data privacy regulations. Aside from the legal ramifications, the way you collect and use data can also impact customer trust in your business. To uphold trust and maintain compliance, follow these best practices: 

• Obtain explicit consent before collecting customer data and tell customers exactly how and why their data will be used
• Provide clear value in exchange for data sharing (i.e. if you promise tailored results in return for data sharing, make sure the customer actually gets offers that apply to them) 
• Verify and clean data to make sure it is as accurate as possible
• Aggregate data into identity graphs and make the information available across the business to improve the consistency of the customer experience
• Stay informed on and in compliance with data privacy regulations

Be aware that your business is responsible for the partners it chooses to work with! Only partner with businesses that maintain the highest standards of data privacy and transparency. 

First Party Data Marketing Starts with Data

The way you collect and use data is more than a technical decision. It’s key to successful marketing. First-party data marketing starts with an approach to data that’s holistic, comprehensive, and privacy conscious. 

When you supplement first-party data with other data sources, you get the fullest possible picture of your customers. Centralized organization and customer identity graphs help every part of your business deliver a consistent, quality customer experience. Get the technology you need to understand your customers so you can deliver information and offers that convert. Learn how Ignite by Launch Labs empowers a first-party data strategy.