How to collect and use first-party data effectively

Data has become one of the most valuable currencies in marketing. Businesses use a variety of methods to collect customer information, all with the goal of better understanding their target audience and designing more personalized and engaging marketing campaigns.

By creating an effective first-party data strategy and gathering data directly from the source, your business can increase your marketing ROI while keeping customers happy and loyal.

What is first-party data?

First-party data is the most coveted and reliable information you can have about your customers. Since you’re the one collecting the information, you ‘own’ it and don’t need to purchase it from contact lists or data brokers. Your company can gather customer information through user interactions on your website or app, and when someone makes a purchase.

Common examples of first-party data include:

• Demographics like age, gender, job title, etc.
• Email address and phone number
• Mailing address
• Online behavior such as browsing habits, times spent on certain pages, and shopping cart items
• Survey results and feedback
• Previous purchases

One important thing to note, with the growing privacy concerns around data collection, is that businesses must ensure safe and compliant practices related to the information you collect from customers. This means not only being transparent about when and how you’re collecting customer data, but also making sure that their information is stored securely and protected from cyber threats and data breaches.

Why first-party data is important

First-party data is valuable because it’s usually more reliable than other data, as it’s straight from the source. This customer information can provide your company with the following benefits:

• Build deeper understanding and relationships with customers – Understanding customer behaviors, preferences, and interactions can help you anticipate their needs, create customized communication, and provide a personalized experience. 
• Segment your audiences and personalize campaigns – Accurate data helps you identify different segments to create individualized marketing campaigns and promotions. 
• Reduce customer churn and attrition rates – By understanding customer behavior, feedback, and engagement, you can create special incentives to retain their business. 
• Create new products and services tailored to customer needs – With information about preferences and market gaps, your business can roll out new products and services that customers actually want.
• Drive conversion while lowering costs – Having insight into which segment is more receptive to personalized marketing campaigns helps increase conversion and maximize marketing ROI.

What are second-party and third-party data?

The different types of data aren’t necessarily different in what they tell you—the main variable is who collects it. Second-party data, for example, is collected by one company and then sold to another company that’s not a direct competitor. In a way, the second-party data you purchase is another company’s first-party data.

Third-party data is collected and sold by companies called data brokers. Data brokers specialize in gathering and selling customer information to other businesses.

First-party data is different because the business that collects and owns it is gathering data about its actual customers. Second- and third-party data consists of customers who have never interacted with your business but may fall within your target market.  

How can you collect first-party data?

There are plenty of ways to collect first-party data, including:

• Website sessions/online forms – Ask customers to fill out online forms or register on your website. 
• App downloads and usage – Encourage customers to download and use your app.
• Customer service interactions – Keep track of customer issues, feedback, and purchase interests.
• Customer feedback and surveys – Ask your customers to leave feedback or fill out a survey to understand their likes or dislikes, and why.  
• Social media mentions/interactions – Create custom hashtags and interactive content, and engage with your followers by commenting and sending direct messages.
• Email subscriptions – Subscription forms can help grow your subscriber list and gather more first-party data.
• User registrations – Ask customers to register their products online. 
• Lead generation campaigns/gated content – Offer free valuable and relevant content (such as a PDF guide) with a registration link.

When you start collecting first-party data, you’ll quickly notice that you need a way to store and organize this customer information. Using a customer data platform or software can help keep track of all the information as well as continuously add new customer data. This is extremely useful for the sales and marketing teams charged with campaign creation, plus it ensures that you have a secure place to store data.

Analyzing and evaluating your data

Collecting data is the first step to creating marketing strategies. The next step is to analyze and evaluate this information. Effective analysis can give you valuable insight into your customers. For example, you can figure out where they came from (what devices, websites, and apps were used to click the purchase button) and which digital functions discourage them from making a purchase.

Analyzing customer data can also help identify valuable trends and patterns like device preference, bounce rates, and conversion rates. Armed with this information, your company can re-evaluate and improve its revenue-boosting strategies. 

Ways to use your first-party data to boost revenue

Now that you have collected and analyzed your first-party data, you’re ready to create campaigns to strengthen your brand and boost revenue. Before designing an actual campaign, think about the end result. What do you want to achieve? This could be building brand awareness, gathering quality leads, engaging and re-engaging with new and existing customers, or providing more to your current customer base. Here are some ideas of what you can do with first-party data. 

Loyalty program

Loyalty programs are very effective for customer retention. Everybody loves a discount or something for free. Think about offering early-bird access to sales, discounts, or free content. These programs can also reward customers for repeat purchases or for engaging with your brand. 

Audience-specific landing pages

Landing pages make an important first impression. With first-party data, you can create landing pages for different segments. You can also use A/B testing to see what works and what doesn’t until you figure out what performs best. 

Personalized email/SMS

Create email and SMS communications about promotions, special offers, and even reminders about unopened messages that grab your customers’ attention.

Paid search/social

With your analysis, you can create targeted ads and social media campaigns using the most effective channels for your segments. These insights can help determine the best times to post content to reach your different audiences. 

When armed with first-party data, your business can collect invaluable information and better understand customer needs. By creating personal and meaningful marketing campaigns based on reliable data, you can increase customer loyalty, attract new qualified leads, and grow your business.