Today marketing is completely data-driven with almost every facet of marketing leveraging data in some form or another. Many of our most trusted strategies, such as retargeting and personalization, are heavily influenced by data. The three main types include first-party, second-party and third-party data each with their advantages and challenges.
But not all data sources are created equal and just like the influence food has on our health, the quality of the data we use for our marketing strategies, significantly influences the performance of our campaigns.
When it comes to a successful marketing campaign, first-party data will always be the best data source to use. First-party data is one of the best sources of data available as it is information that the company already collects from CRM data to web analytics data to customer feedback. For example, it can be made up of concrete facts, such as a visitor lives in Michigan, or it can be more abstract, like if someone is just browsing or actually ready to buy a product. Acting on first-party data should be a priority for every company that prioritizes the customer experience.
Here are five reasons why you need to ensure you are getting the most out of your first-party data.
1. First-party data has the highest return on investment
According to a recent joint Econsultancy and Signal study, 81 percent of companies that leverage first-party data achieve a strong ROI from their data-related marketing investments. The same study also found that the highest campaign lift came from using first-party data. Furthermore, Econsultancy stated that, “First-party data garners the highest return on investment of any data type, with the potential to do more.” Therefore, to improve the ROI of your marketing campaigns using first-party data is a no brainer.
2. First-party data is exclusive, your competitors don't have it
In the digital world, a competitive edge could make all the difference between a successful campaign and one that misses the mark. Pete Kim, CEO at MightyHive, penned an article for AdExchange in which he claimed that, "More than ever, first-party data represents a critical foundation for future marketing plans because it's the only data that your competition will never have."
One of the biggest disadvantages of second and third-party data is that your competitors can purchase it. It is not a unique data source. Only with first-party data can you guarantee your exclusivity to the data and get one up on your competitors.
3. First-party data is data you already own
Another drawback of second and third-party data is you have to pay to use it. First-party data on the other hand is data you already own. It is data that comes from solutions you already have in place such as a CRM system or a Voice of Customer program. This makes it much more accessible and extends the value of investments you have already made.
4. First-party data is unique and rich
The joint Econsultancy and Signal study also reported that outside data, such as second and third-party data, can help short-term marketing goals but it has no sway or indication over how customers interact with the business and what leads them to purchase. First-party data, collected directly from the business provides companies with rich opportunities to leverage customer patterns, behaviors and interests. Therefore, leaving first-party data such as customer feedback to sit in a silo leaves a rich and unique data source untapped that could exponentially improve retargeting and personalization efforts.
5. First-party data creates tailored experiences
First-party data is the most accurate data source that can truly tell you what your customers want. As a result, you can create highly tailored experiences that will drive conversion. For example, by leveraging first-party customer feedback, you can drive retargeting efforts by recognizing purchase intenders and aligning the message with their needs in order to increase the likelihood of conversion. In today’s customer-first world it is more important than ever to create meaningful and engaging experiences. First-party data is a critical ingredient to moving towards tailored experiences that create a one to one interaction with customers.
First-party data is a source that you already have access to and is critical to creating truly personalized experiences making it more valuable than second and third-party data. This makes acting on first-party data a fundamental priority for every company that wants to be customer-centric and that’s why first-party data is king.
To learn more about how to leverage your first-party customer feedback data to improve your retargeting campaigns check out our post – Retargeting 2.0