Insight, Thoughts

First Party Data: How an effective strategy can drive revenue and inform lookalike marketing campaigns

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How a first-party data strategy drives revenue and informs “lookalike” marketing campaigns

Unified customer profiles provide luxury brands with a much broader picture of what their customers need, how they behave and their pain points & desires.

To create a reliable unified customer profile, your primary input should be first-party data. Run this data through a customer data platform to gain a real understanding of your existing and potential clients through their interactions with you across multiple channels and touchpoints.

Applied correctly, these insights will improve customer engagement, optimise marketing campaigns and present growth opportunities. Marketers have also recently begun to use this data to inform “lookalike” campaigns on Facebook and Instagram.

In this article on first-party data strategy, we cover:

  • What first-party data is
  • Which customer data you should collect
  • The demise of third-party data
  • How customer data platforms help you see the customer journey more clearly
  • Creating marketing campaigns from first-party data
  • Building “lookalike” audiences from first-party data

What is first-party data?

You already collect first-party data directly from your customers via your customer relationship management, ERP and analytics software. This is valuable primary-source data that, when manipulated correctly, provides accurate insights into customers’ behaviours, preferences and wants.

This data can inform marketing teams on how the characteristics of campaigns that customers respond best to, what clients’ perceptions of the customer experience are and which products clients are likely to want more.

Key first-party data points

When collecting first-party data, ensure the following specific data points are included:

  • Contact details, especially email addresses for direct communications.
  • Transactional data, showing what a customer has purchased, how often they buy and how much they spend.
  • Website activity such as which pages customers visit, how long they stay on your site and what actions they take.
  • Social media engagement including what posts customers and subscribers like, comment on and share.
  • Customer feedback forms to get a better understanding of customers’ opinions and preferences through surveys, reviews and ratings.
  • Location, particularly suitable for brands with retail outlets so they can tailor promotions to local needs, trends and preferences.
  • Interests are useful particularly for luxury brands so they can tailor content (including product pages and funnel pieces) to reflect lifestyle and aspiration.
  • Loyalty program behaviour allows marketers to ROI when rewarding customers for repeat purchases or referrals.
  • Device type information is useful for UX and mobile apps teams in creating the best experience on customers’ preferred smartphones and tablets.

The demise of third-party data

If you rely on third-party data for a significant proportion of revenue, now might be an opportune time to pivot away from that.

That’s because third-party data is dying. The General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) in the US made third-party data much harder to work with. Both laws limit how it can be used even when specific data can not necessarily be traced back to one person.

Consumer pressure also led to Apple allowing their customers to opt out of location sharing and third-party tracking. 2023 is the year that Google announced it would deprecate third-party cookies.

Third-party data was useful because you could reach people based on their demographics, location, interest, online behaviour and other criteria. While nowhere as precise as third-party data, it was precise enough to generate a return.

Second-party data is less affected. Second-party data is data that two or more brands share, like when Starbucks and Spotify agreed in 2015 to promote each other to their own customers. However, to be compliant, the highest standards of data governance must be adhered to.

Customer data platform vs CRM

Although many CRMs feature sophisticated reporting tools, it’s better to use a consumer data platform (CDP) to power first-party marketing campaigns.

CRMs do focus on sales and marketing but customer data platforms go much further. Fed with your first-party data, CDPs can enrich customer profiles with valuable behavioural analysis insights. They’re also much better at segmenting customers by filtering on metrics like product usage, email campaign engagement, on-site behaviour and more.

CDPs also integrate well with a wide range of popular marketing apps so you can optimise your email marketing, social media marketing and content-based marketing campaigns by blending individual customer prompts into segmented campaigns.

Leveraging first-party data to meet marketing and business objectives

L’Occitane en Provence overcame a variety of marketing challenges by using the insights they discovered by using an AI-powered customer data platform to analyse first-party data.

They specifically collected information on device types, locations, purchase histories and browsing behaviours. Their goals were to segment customers by preferences and create individual customer/browser profiles.

Their customer data management platform now should personalised offers and recommendations to customers and registered website visitors. Visitors saw product categories based on their prior browsing behaviour. L’Occitaine offered visitors free samples and purchase-related gifts based on customer loyalty and the value of goods in their basket.

The combination of the correct choice of customer data platforms and first-party data gave this brand the ability to sell more to the same clients and website visitors.

Other ways to exceed customer expectations with first-party data strategies include:

  • Email marketing – incentivise customers to buy direct from your email campaigns by sending them products similar to those they have bought from you in the past according to category, style and pricing. You could also refresh their memories by emailing them products they’ve viewed on your website in the past or that were in a shopping basket that was eventually abandoned.
  • Web push notifications – pop-ups on users’ browsers reminding customers of abandoned carts, promoting discounts, announcing new products and more.
  • People-based marketing – customers increasingly expect brands to communicate with them whenever they want and on the platform of their choice. By tying together the data on your CDP/CRM with social media handles, you can deliver personalised offers to customers via private social media and messaging apps like WhatsApp and Telegram.
  • Funnel marketing – develop an understanding of what it is that turns a visitor into a customer through precise monitoring and analysis of their behaviour on your site. With this information, you can test to see which promotions and offers persuade a visitor to make their first purchase.

Creating “lookalike” campaigns on social media

Unlike third-party data, using your own data can improve the quality of the direct relationships you have with your clients. First-party data collection allows you to see your clients more clearly and to understand customer experiences from their point of view.

Use these insights to inform your social media and PPC campaign to reduce ad spend waste and redundancy.

Using the demographic insights from campaigns, feed those into Facebook or Instagram to create lookalike audiences. This is an area we have begun working on with a number of clients and it’s begun to yield some very positive results.

If you’d like to discuss your brand’s first-party data strategy please get in touch. We look forward to working with you.