The importance of data as a marketing tool is indisputable. With the right data in your hands, you can unlock your customer base’s preferences and behavior patterns and build on them to ensure your marketing plan is targeted and effective.
But what type of data is the right one, and why is this important? This article will explore the different types of data available to you and provide a persuasive argument as to why first-party data might be the right path to choose.
What Are the Different Types of Data?
Let us begin by exploring the two most common types of data that businesses use to learn from their customers―first-party and third-party data. As the name suggests, first-party data is data that you collect firsthand. It comes directly from your customers. It is data you control and do not have to obtain permission to use.
In comparison, third-party data is data that you purchase. It is collected by external sources.
Risks of Using Third-Party Data
Using third-party data can be problematic, though, because you do not directly collect it from your customer base but from a wide range of sources. So, while you will be getting someone else to collect and analyze the data for you, it might not be directly applicable to your specific audience base. Equally, you are not in control of how the data is collected, so there is a chance that the information you are purchasing is inaccurate or even outdated.
The important issue of consent is also a major risk when relying on third-party data to provide insights for your marketing strategy. When purchasing data from external sources, you cannot be sure of how this data was obtained, and given laws, such as the General Data Protection Regulation (GDPR), the availability of such data may become an issue.
Why Use First-Party Data?
As mentioned above, first-party data is data that you collected yourself. That can be via analytics from your web page, surveys, looking at purchase history, social media posts, and other sources. In this next section, we will take a look at why first-party data could be the way to go.
Since first-party data comes from your own customers and followers, it is much more relevant to your work than third-party data. Analysis of your own customers’ preferences and behavior patterns can be directly translated into positive change in your organization. Plus, when collecting your own data, you can be transparent with your customers about what their data will be used for and gain their confidence, making them more likely to share information with you.
Putting First-Party Data into Action
Let’s take a look at how you can use first-party data and some methods to improve your first-party data strategy.
1. Make content dynamic
Collecting first-party data and acting on it means you can tailor content to be relevant to your customers’ preferences and needs. For example, if you run a travel site and a customer purchased a flight to Marrakesh, then you can tailor ads and tips for his/her trip based on this information. Not only will you be providing a helpful service for your customer who is likely to want to use your website again, but you may also convert this activity into another sale.
2. Targeted email marketing
Utilizing first-party data means that you get to know your customers, and if you can store this in a customer data platform, then you can use this knowledge to provide targeted information to your customers. For example, if you run a travel site, you have customers interested in a variety of destinations and types of holidays, and not one-size-fits-all email will interest your entire audience. With first-party data, you will know which customers are interested in what and ensure that they only receive information that is relevant to them.
3. Enhance customer experience
Getting to know your customers can only be a good thing, and it means you can tailor services to meet their requirements and satisfy their needs. Successful marketing means knowing your audience’s specific niches, which you can do through analyzing first-party data. That could be done by creating specific areas on your website related to the different interests of your clients, highlighting that you recognize them as individuals.
An effective marketing plan requires a solid evidence base, which you can get from first-party data. And since you have full control over the data, you can be confident in its authenticity and relevance to your development as an organization.