3 Best First-Party Data Practices To Drive Personalised Customer Experience
Get ready for Google’s 3rd-party cookies phaseout with these actionable tips
Last year Google announced to drop the support of third-party cookies on its Chrome web browsers by 2022. Though third-party data-driven ads are effective, some people view those ads as annoying and invasive. With increasing awareness towards user privacy, many people are not comfortable about being tracked on an individual level.
Google developed a replacement for third party cookies which is called Federated Learning of Cohorts (FLoC). The new approach targets a group of people who share similar interests instead of tracking each of us individually with personal identifiers (less creepy as some people would say).
Google rolled out the trial of FLoC cookie earlier this year in March. With its preliminary data, Google claims that the advertisers can expect to see “at least 95% of the conversions per dollar spent when compared to cookie-based advertising.” That being said, there are concerns and skepticism about the published data and the uncertainly has pushed many companies to rethink their first-party data strategy to make sure they can deliver the best personalised experience for the customers.
This article is aimed to help prepare and improve your first-party data strategy. Before we get into best practices, let’s get ourselves familiarised with four types of data that currently play an important part in marketing.
The Collection Method of Data Explained
Third-party data: Third-party data are collected by parties (e.g. advertisers) that aren’t the owner of the website the user is visiting. Third-party companies use tracking cookies to learn web visitors’ overall online behaviours and activities such as interests, purchases, and website visits, to perform more personalised ads across channels.
First-party data: First-party data are collected directly from the company’s own audience using first-party cookies to optimise customer experience such as remembering a user’s language preference, log-in info, items added to the shopping cart and to tailor offers and messaging. Google Analytics puts together the results of first-party data.
Second-party data: Second-party data is another company’s first-party data. A buyer can purchase directly from a seller who owns the data and use it to improve their marketing strategies.
Zero party data: Some would say zero party data is the most valuable data since consumers answer your questions and provide insights voluntarily.
The term zero party data was coined by Forrester Research which defines as “data that a customer intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her.”
Optimise First-Data Strategy with Actionable Suggestions
Though third-party data is convenient and help marketers reach and discover new audiences, it’s not as accurate, relevant, timely and unique as first-party data that are collected from the customers.
To prepare for the phaseout of third-party cookies, companies are trying to improve their first-party data strategy in terms of collection and organisation. Here are some ideas as to how you can enrich your data pool.
1. Establish Long-term Relationships through Value Exchange
According to the report by BCG, the best practice of first-party data is through two-way value exchange: “the company gains the ability to deliver a better customer experience and more effective marketing, and the customer gains useful information, assistance, and offers.”
For example, companies build a new platform whether being a mobile application that helps improve the user experience or a content-specific website that solves a particular pain point of the customers. By providing value for the customers, companies can gain additional insights other than their product site and develop data-driven marketing strategies.
2. Fill Data Pool through Interactive Progressive Profiling
Progressive profiling is a technique that allows you to build a customer profile by asking a few questions once at a time instead of bombarding your customer with a 10-min long survey. Form-filling is the most common way to collect data. However, this is not the only way. Some companies opt for creating interactive experiences through gamification to encourage participation.
Take this non-profit organisation that offers roadside travel assistance for example. They collect deeper insights about their customers through a fun quiz. In doing so, the company can then send a personalised follow-up offer to its members.
3. Invest in Customer Data Platform for Centralised Insights
Now we know how to collect first-party data but how can we make the best use of our first-party data especially with many of them being scattered. How do we connect data across online and offline channels? That’s when Customer Data Platform (CDP) comes into play.
What can Customer Data Platform do for marketers? CDP help brands manage entire customer profiles and journeys with a centralised view. Thus, brands can unify, activate and analyse those connected data in just one place.
For example, CDP helped Wickes, a home improvement retailer with 240 stores across the U.K. improve the cross-team efficiency in call centres where are a vital customer touchpoint for Wickes. Before implementing CDP, call centre agents always needed to ask the IT department to pull out data such as customer details and loyalty program memberships. After using CDP, call centre agents are now able to manage customer inquires and provide personalised services resulting in an increase of 98% in operational efficiency.
Final Thoughts
For many digital marketers, it was terrifying to hear the news of third party phaseout, thanks to some media as they describe it as ‘cookieless world’ which is not true at all.
The current situation is what tech giant responds to users’ concern for privacy. The solution might not be perfect yet and it indeed has a huge impact on digital marketing. Having help from external stakeholders is convenient but companies should always have their own data so they can act proactively rather than respond reactively to the marketplace.
Do you have any concerns or insights for the future of digital marketing? I’d love to hear your thoughts! Share in the comment below!
Thanks for reading! written by Chiao Yin
