Why your customer data strategy should lean on first-party data

Due to privacy concerns, many ad platforms are saying goodbye to third-party tracking.

This begs the question: “What is consumer data without third-party cookies, and what’s going to happen to customer data strategies?”.

Luckily, the answer is simple (even if implementing it can present some challenges)—we must rethink our customer data strategies and lean on first-party data to fill in the gaps that the end of cookies will leave behind.

Consumer data strategies: Planning for the future

As marketing strategies shift away from using third-party data, investing in a first-party data approach can help you adapt to a changing industry.

In contrast to third-party data, which you obtain from various companies, first-party data is unique information captured by your business. Through marketing initiatives and consumer interactions, this is the data your team has collected with direct consent from customers. The responsible use of first-party data can help you create a direct relationship with consumers and benefit your company in various ways.

The Boston Consulting Group found that providing customers with a personalized experience throughout their journey by emphasizing first-party data can bring cost savings of 30% and revenue increases of 20%. They also note that, by linking all your first-party data sources, you can double the incremental revenue from each ad placement and see 1.5 times better cost efficiency compared to businesses without data integration.

And even though 90% of marketers understand the importance of first-party data for their customer data strategy, less than a third efficiently access and integrate that data, while fewer are using it to create a better customer experience.

The time to emphasize first-person data isn’t tomorrow—it’s today.

How to harness the potential of first-party data for your customer data strategy

Now that you know why the prioritization of first-party data is so important, let’s talk about three steps you can take to make effective use of data.

1. Collect and analyze the right customer data

Determining which data to collect and the best way to analyze it are the main factors that hold marketers back during the shift to first-party data. Establishing clear goals and linking them to business objectives can help overcome these challenges.

Once you set these goals, it’s easier to differentiate between must-have data and nice-to-have data.

For example, if your primary goal is customer loyalty and retention, the first step should be making your loyalty program the primary source for collecting first-party data.

From there, it’s simply a matter of creating a plan with easily measurable goals to determine what data is the most valuable for you to invest in and collect. You can identify the first-party data to prioritize by looking at the costs to acquire it and factors like its impact on customer experience and compliance with data privacy regulations.

2. Offer value and transparency in your customer data management

For your customer data strategy, there’s nothing more important than being transparent about how you collect and use your customers’ data. By showing customers you use their data responsibly to deliver them value, like through loyalty programs, you encourage them to be more willing to share information with you.

As you take a first-party approach to customer data management, you should ask yourself if you’ve made it easy for your customers to see what benefits they get by sharing their data.

Consent is key—you can incorporate consent forms throughout your website to responsibly gather data and inform customers how you plan to use it and what they gain in return.

3. Take a test-and-learn approach to personalization

After determining the first-party data most valuable for you to collect and how you’ll approach customer data management, it’s time to focus on how your customer data strategy will improve your users’ experiences.

One-to-one personalization is a realistic goal, but it can require a significant time investment. To get started with your new first-party customer data strategy, you can take a test-and-learn approach to determine the needs of specific audience segments.

Building personalized digital experiences is easy with Lytics

In a world where third-party data is disappearing, first-party data can offer valuable insights to help you provide customer experience while increasing revenue, cost savings, and overall ROI. However, it’s important to collect the right data, maintain transparency with customers, and use your first-party data responsibly.

That’s where Lytics can help.

As a customer data platform designed to prioritize and leverage first-party data, Lytics help you collect and use the right data to gain the insights you need to create a unique, relevant, and compelling experience for your customers. Try Lytics for free and take your customer data strategy to the next level.