Major browsers are blocking cross-site tracking, forcing digital brands to find new ways to engage new customers and drive revenue growth. That means there is a significant opportunity to collect and leverage first-party data. But why is it urgent to do so?
Collecting first-party data brings advantages in accuracy and security. You are not limited to information provided by third-party platforms. The information is extracted directly from the source: your audience. Minimizing the distance between your company and the data source reduces the chance for errors and data breaches to occur.
However, many marketing teams lack the right technologies and data strategies to leverage the full potential of first-party data. The challenge is aggregating this data and activating it in the brand’s marketing and advertising efforts.
Developing an effective first-party data strategy can be intimidating at first, but it doesn’t need to be complicated if you follow these steps.
Take stock of your first-party data sources
First-party data is any data you collect through a direct relationship with your customers and site visitors. Although many in the industry are talking about it like it’s a new foreign thing that you’ve never had before, this is not true. It’s easier than you think to collect first-party data, and you probably already have access to a few significant sources.
Many people assume first-party data is limited to CRM data. CRM data can include customer contact information, order histories, and customer service records. This is the data you are most likely to already have without doing any extra work. But this is just a small portion of what’s possible.
The next essential source of first-party data is your website. You can collect first-party browsing data by adding first-party tracking tags to your website. With the right technology this is a simple task. With first-party website tracking, you can collect anonymous website behavior and assign unique IDs to each customer. This includes source and medium data for each session just like Google Analytics provides. This is the best way to capture data on the pre-conversion part of the customer journey. Once new customers convert and give you their name and contact info, their customer profile is merged with their anonymous ID with their pre-conversion browsing behavior.
Similar to a website, customers may share first-party data when they create a profile on an app. When users create an account, the marketing team has access to customer behavior and their ongoing activities. However, you need to ensure that useful data is being extracted from your app, by previously defining which user events are meaningful and measurable. You can also run in-app polls and surveys to increase engagement.
Invest in a unified customer database
Before you can build a first-party data strategy, your brand customer data must be collected, organized, and unified. A Customer Data Platform (CDP) is a web-based and marketer-friendly platform that enables a customer-centric approach to data collection and use. The CDP category is broad and includes several “flavors” of customer data management. Velocidi’s solution places primary emphasis on making data usable in marketing by automatically segmenting customers using machine learning and RFM (Recency, Frequency, Monetary Value) modeling.
Once you have those segments, you can activate them across your marketing channels through secure integrations with marketing platforms. And by sharing this information across product, marketing, and customer success departments, you create a customer-centered organization responsive to your customer’s needs.
Integrate your first-party segments into your marketing strategy
Now, you must identify the data you need to reach your business and marketing goals effectively. Then, set priorities for each funnel stage. Velocidi’s CDP provides different strategies to convert, reach and retain valuable customers.
- Conversion Optimization. Velocidi identifies which customers are most likely to convert. How? Using machine-learning predictive modelling such as Likelihood to Buy (LTB) to detect patterns in online customer behavior. Using first-party data, we are able to create audience segments that isolate your “likely buyers”, so your retargeting budget won’t go to waste.
- Prospecting. A combination of machine learning and commonly used RFM parameters are used to build lookalike audiences. These audiences – who share similar online habits and preferences with your target audience – help you reach potential customers online.
- Retention. Deliver the right message at the right time. Re-engage your customers when they are most likely to respond positively to your communication. Velocidi identifies the most receptive recurring customers and when to engage them based on their Next Purchase Date Prediction.
- CLV Attribution. Attribution allows marketing teams to learn which touchpoints are driving conversions most effectively with unbiased reports. However, you need to predict a user’s long-term journey regardless of the channel of acquisition. That is the job of Customer Lifetime Value (CLV). At Velocidi, we use predictive CLV based on real-time first-party data.
Amplify your data
After building your strategy, you must activate your audiences on marketing and advertising platforms (e.g., Google, Facebook, and Mailchimp) so you can run customized campaigns with higher ROI.
One example of success is the retailer Maskk. Using Velocidi’s audience strategies to calculate their actual cost per acquisition across both prospecting and retargeting campaigns, Maskk reduced their CPA by 33%.
You can also use first-party data to personalize the content you show to a particular customer. The data you collect on a user that visits your website will give you insights into their interests, allowing you to serve content that feels close and personal.