What is first-party data?

In a world of increasing digitalization and automation, personalization can truly connect with your customers and set you apart from the competition.

To implement personalization into your marketing, you need deep insight into who your customers are—and for that, you need data.

Of course, not all types of data are created equal. The best kinds come directly from your customers: That’s called first-party data.

Source: Data Science for Marketers #1

Here we’ll cover first-party data and how it compares to other forms of data, then explore why first-party data is vital to business success.

First-party data explained

First-party data is data about your customers that comes directly from your own sources. It’s incredibly handy for building customer personas and behavioral profiles.

Example Lytics Behavioral Profile

First-party data sources can include things such as:

• CRM
• Email
• Mobile app
• Product purchases
• Website
• Social media
• Surveys

Some types of first-party data include, but are not limited to:

• Demographics
• Email responses
• Hobbies and interests
• Purchase history
• Website dwell time
• Website views

Most people leverage customer data platforms (CDPs) to collect first-party data, but you can also store second-party and third-party data with them. More on those next.

The other types of data

First-party data is but one kind of customer data you can collect. There are two other kinds—second-party and third-party data—that each subsequently offers you less control over how you collect them and what kinds of insights you can gain. Nonetheless, they have their uses, but let’s look at each one in more detail.

Second-party data

Second-party data is one of the two types of data you don’t collect. It’s not far away from you, though—it’s data you might receive from a trusted partner.

For example, say you’re a headphones brand. Perhaps you partner with Best Buy to sell your products in their physical stores and through their website. Initially, you’d share your first-party data with Best Buy to assist them with marketing. Your first-party data becomes their second-party data.

Meanwhile, Best Buy gathers data on the customers buying your product and shares it with you. That information is first-party data to Best Buy—but to you, it’s second-party data.

You can also buy second-party data, but it may not be as reliable as partner-provided data since you aren’t cultivating a close relationship with another party.

Third-party data

Third-party data is also data you don’t collect, but it’s further away from you than second-party data because it tends to be aggregated from various sources.

What makes that different from second-party data, though?

Well, third-party data tends to come from random samples instead of your specific target market. For example, if a company creates a form for people to provide information, and you buy that information from them, that’s third-party data.

Third-party data tends to be demographic, but customer behavioral data proves to be more predictive in marketing outcomes. A 2020 Lytics study with 350 customers revealed that 92% of outcome variabilities can be traced to customer activities that can be measured through first-party affinity and behavioral data.

What is first-party data useful for?

Let’s explore some ways first-party data comes in handy for your business.

Personalization

First-party data helps you discover who your customers are and their habits. You can use this data to segment your customers into distinct audiences, which allows you to create highly personalized, one-to-one experiences with your brand.

This alone can do great things for your business: Some 90% of consumers are more likely to shop from brands that provide relevant product recommendations.

90% of consumers are more likely to shop from brands that provide relevant product recommendations.

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Adapting to online privacy changes

Google recently announced it’s steering toward a web that puts privacy first. Such changes decrease the viability of third-party cookies, so shifting to a first-party data strategy is becoming more crucial by the day.

In general, complying with laws like GDPR and CCPA is much easier when you use first-party data.

On top of that, it’s consent-driven. Accenture found that of the 27% of consumers who reported having a too-personal or invasive brand experience, 64% said it was because the brand had information the consumer didn’t knowingly or directly provide.

Consumers appreciate you asking for their data before using it and may look upon your brand more favorably.

Build customer loyalty and grow with first-party data

Customers don’t just prefer personalization anymore—they demand it. To create hyper-personalized experiences that delight your customers, you’ll need a CDP that bridges that gap between raw data and the insights needed to produce those experiences.

Lytics employs advanced data science and machine learning techniques in real-time to help your marketing team gather the right data to deliver experiences that truly connect with your customers through whatever channels you use.

Learn how Lytics can help you leverage first-party data to provide a better customer experience. Discover free guides and calculators that show you the impact of a first-party data strategy on your marketing ROI in the First-Party Data Resource Hub.