First-party data is all the data that is generated and collected directly by a company’s own properties and audience. Companies are able to use this data to improve their products and services, understand customers’ needs, and generally provide a better customer experience.
First-party data is immensely valuable for your business as you have ownership of that data. The data you’ve collected can be used for better customer service, increased understanding of your customers, more precise messaging for your marketing and advertising, and knowing for a fact that a 3rd party such as Facebook, Google, or Amazon can’t just change their algorithms and take away customer data from your business.
Businesses usually collect customer data for prospecting, retention, and engagement through some form of a customer relationship management tool, also known as a CRM.
A CRM system can provide a full 360-degree view of your customers which helps with generating content that appeals to them as well as targeting them with ads on social media platforms or email marketing campaigns, addressing customer queries and concerns, as well as follow-up on prospects and leads generated from your website.
But before diving into tools and usage, we need to focus on the fundamentals, so let’s start with WHY you want to collect first-party data, especially beyond 2021.
No More Cookies!? Monster Sad!
To understand first-party data’s importance (also known as 1PD), let’s explore what types of data there are in the first place. I’ll keep it as simple as possible.
- Zero Party Data – Yep, there’s a ZERO point data, these typically are data collected through voluntary identification by an audience, such as ticking certain identifier options on a webpage This term was coined by Forrester, so I’ll just use their definition and you can click the link below to learn more:
“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.”Forrester
- First Party Data – Data you actively and directly collected of your customer and audience through properties you own such as your own website, survey forms, sign-up forms, feedback and contact forms etc.
For example, if you fill in the subscribe form at the footer of this site, that’s first party data I acquired from you, my reader (go ahead, please subscribe!)
- Second Party Data – First party data collected and owned by someone else that are shared with you. For example, if you share your first party data with an agency to run ads, they are using 2nd party data (your first party data).
- Third Party Data – Aggregated data collected of customers and visitors by properties and entities that you don’t have direct relationship with. For example, all the cookie data and pixel data we have in our browser right now that are collected by Google, Facebook, independent advertisers etc. They’re often anonymous, aggregated data used to target us for future communication, audience grouping, etc.
It’s the third-party data, often associated with cookies (small snippets of text and data collected from your browsing behavior) that will be axed more and more moving forward.
Back in 2019, Google made it much easier for their users (so, all of us outside China, I guess) to block unwanted cookies during our web browsing experience. In a nutshell, they said:
The changes in Chrome will empower users to make informed decisions about how to control the use of their data for personalized advertising.GOOGLE ADS – Raising the bar on transparency, choice and control in digital advertising – May 2019
In March 2021, Google doubled down on this and announced its intent to remove support for third-party cookies from its core browser, Google Chrome, stating:
Keeping the internet open and accessible for everyone requires all of us to do more to protect privacy — and that means an end to not only third-party cookies, but also any technology used for tracking individual people as they browse the web.GOOGLE ADS – Charting a course towards a more privacy-first web – March 2021
In April 2021, Apple announced privacy changes built into their iOS 14 that essentially gives users the option of not sharing their personal data on all applications. From games to social media apps, businesses and publishers may no longer track the activities, purchase history, and interest of their customers once they are opted out.
For customers, this offers plenty of privacy benefits, for businesses, however, you’re now working blind if you rely on third-party data access.
Industry experts expect the death of third-party cookies to expand even further in years to come, forever changing how marketing and advertising strategies that have worked for so many businesses over the past decade.
Don’t Forget to Take Care of Your (Customer’s) Data
I won’t cover all the details about data protection and security measures as they differ country-by-country, but I’ve provided a list below with Wiki links:
- General Data Protection Regulation (GDPR)
- California Consumer Privacy Act (CCPA)
- Personal Data Protection Act (PDPA) – Singapore-specific
In general, these laws have very strict and specific guidelines that you must follow to protect the data of your customers. If in doubt, trying to comply with both GDPR and CCPA will start you off the right path, then layer your local country requirements, as appropriate. DO NOT IGNORE THIS!
First-Party Data Acquisition Ideas for Small Businesses
Before you start acquiring data, you’ll need to identify what kind of data your business needs in the first place. A big mistake a lot of first-time data acquisition projects face is acquiring too much data that they can’t use and end up spending countless hours and resources sifting through data but not knowing where and how to use them. That’s a huge waste of time.
As resources are limited for most small businesses, focusing on collecting data that helps your team to make smarter decisions and better serve your customers would be great starting points instead of sales and revenue-focused.
Here are five simple ways to get started if you have a limited budget and resources.
1. Utilize Zero Party Data Collection
As mentioned above, zero-party data are data a user freely provides during an interaction with your digital properties. If you’re still unsure of what that looks like, here are some great examples.
Tide utilizes this pretty well, on their home page, they have this zero-party data capture form identifying what kind of stain problem you’re facing.
After you’ve selected the stain type, you’d be directed to a specific and dynamic landing page that’s focused on your selection, alongside the product recommendation.
While you may not be a global leader in laundry detergents, you can utilize the same strategy to guide your visitors to the most appropriate content, solution, and product to accelerate your relationship with them.
2. Collect Basic User Information Up Front and in Content
Oreo uses a standard pop-up lightbox window to collect a visitor’s name and email. The most common mistake companies make when implementing user data capture is not giving a reason WHY THE VISITOR SHOULD GIVE YOU THEIR INFORMATION.
It’s super common for websites to use “Subscribe to our email list!”, or “Get notified!” but not address whether that’s a strong enough rationale and incentive to give away our personal data.
Oreo’s incentives include exclusive offers, recipes, and updates. The recipes part is super popular for Oreo fans, I personally would’ve focused on that incentive if I were to optimize that lightbox.
You can do the same by offering an incentive that makes sense for your business. Perhaps a first-purchase discount, a free trial, or a complimentary consultation. Figure out what excites your prospects.
3. Use Warranties
This is particularly powerful for physical products or any product that have a warranty attached. The incentive is clear – peace of mind.
In almost all cases, companies do NOT require your data, serial number, contact information for warranty purposes as the products’ batch code and serial numbers will be able to identify whether or not an item was produced within the warranty period and possibly track which retailer sold you the product as well.
The key information for warranty claims tends to be the identifiable elements on the item (bar code/serial) and proof of purchase date, that’s it. Your personal information is irrelevant – for warranty purposes… But highly valuable for first-party data capture.
As you can see from the example above (from Asus), the fields of information they ask for have nothing to do with the product. As long as there’s a reason why people are incentivized to register your product, be it for replacement, servicing, or even on-boarding support, there’s an opportunity to capture data.
4. Don’t Forget Physical Live Events
Events, roadshows, booths, symposiums, and conferences are extremely valuable and efficient ways to collect VERY targeted first-party data.
Your strategy closely mimics #2 above for online properties, but you’re just doing it face-to-face. By asking attendees to fill up a survey form before or during a talk, asking for business cards, post-event feedback forms, the data you’ll collect are almost guaranteed to be relevant to your business.
One of the most efficient ways to acquire leads is through LinkedIn. Consider incentivizing your prospects to scan your LinkedIn QR code and follow your business account and let LinkedIn’s robust back end handle the rest. Learn more about LinkedIn’s business solutions here.
5. Leverage the Unboxing Moment
One of the most underrated customer experiences marketers and businesses ignore is unboxing. That moment our package arrives in the mail or even when we take an item out of a loose, open bag when we get home. It’s a brief but important gifting euphoria we all enjoy whether we’re familiar with the content or not.
This is a prime-time moment to capture and connect with someone who’s already either purchased your item or got exposed to your product for the first time.
For great brands, this experience is an exact science. From how many tear-offs and folds it takes to “reveal” the product to how many smaller compartments are in the packaging for you to unearth more goodies. They all come into play to maximize euphoria and minimize buyer’s remorse.
We’ve learned this from flower and celebration products where opening the letter and insert often takes precedence over the product itself. The reverse is true for most electronic products, where manufacturers put the documentation last to groom you to make sure you get the most out of your gadget.
Use inserts strategically that is suitable for your product and combine them with the tactics mentioned above like warranty, perks, and entertainment to build your database.
It Doesn’t Have to be Complex
There you have it, really simple methods you can try for your business to get started capturing first-party data of your customers to start a more direct relationship with your customers.
No matter what your business size is, or what product you sell, your business’s most valuable asset is your customer data.
Start simple and start small, why not try it with your current customer base or your next small campaign? There’s no need to go nationwide if your pipeline and marketing team can’t handle the volume anyway.
In future articles, we’ll cover software suggestions, how to actually use the data you’ve collected, and common pitfalls and mistakes small businesses make when it comes to their CRM strategy. Stay tuned!