Seven First-Party Data Ingestion Ways Your Business Is Missing Out On
30 second summary:
- Third-party data is being phased out by Big Tech, so first-party data is essential
- First party data is willingly provided by users so that you can create a consumer profile
- Internet users are careful about providing their data, but do so when they are rewarded
- Pixel tracking, CRM platforms, surveys, and encouraging interaction and registration are all effective ways to collect data from first-party providers
- First-party data must be used responsibly to repay consumer trust in a company
In online business, data is arguably the greatest currency of all. By getting reliable data about your target audience, an effective and tailored marketing plan can be created. This will convince customers that you understand their special needs, wants and weaknesses.
Unfortunately, not all dates are created equal. As the impact of the internet grows and the aftermath of the Cambridge Analytica scandal continues, consumer privacy is more important than ever. Every online business must create a consumer profile in an ethical and reliable manner. This makes first party data collection critical.
What is first party data?
First party data is consumer information that is collected directly from your company based on user behavior. This data can be used to profile your target audience and tailor your marketing and user experience accordingly.
What is the difference between first party, second party, and third party data?
As mentioned earlier, first party data is user information collected directly from your website. We'll discuss how you can get first-party data shortly. However, let's clear the difference between this approach and third-party or third-party data.
Third-party data is essentially the first-party data collected by another company. This can be shared between two websites for an agreed common good. However, third-party data remains private. It will not be made available to the public and cannot be purchased.
Third-party data is the data that you typically acquire from a data management platform (DMP) or a consumer data platform (CDP). These platforms collect data from users based on their online habits. These are known as tracking cookies. It is important to note that third party data is not obtained through a personal relationship with consumers.
The use of third party data is slowly being phased out. Internet users are becoming increasingly security conscious and trying to create online privacy policies. Google has announced that it will remove third-party cookies from 2022, while the Firefox and Safari browsers have already done so. With Google Chrome accounting for around 65 percent of the world's web browser traffic, the effects of this will be clearly felt.
In essence, third-party data is a dying art, and third-party data ultimately belongs to someone else. This means that first party data collection should be a priority for any online business now and in the future.
How does first party data help a business?
As indicated, first party data is used to create a consumer profile. Think of this as market research straight out of the horse's mouth. By monitoring how users interact with your web presence, you can offer them more of what they want – and less of what they don't care or even alienate. After all, there is little to be gained by marketing a steakhouse restaurant to someone who is solely interested in a vegan lifestyle.
Perhaps the most effective example of first-party data marketing is Amazon. We've probably all bought something from Jeff Bezos' empire at one point or another. Even if a conversion hasn't completed, you may have browsed the products on offer. Amazon uses this data to create personalized recommendations the next time you visit.
It's not just a tool for direct interaction on a website, however. First party data is also invaluable for advertising. By learning a user's habits, bespoke marketing can achieve them on social media. This is a powerful form of inbound marketing that is sure to keep consumers interested.
Consumers who were previously solely interested in red circles might be tempted to experiment with a blue triangle, but are more likely to stick to the type. By including first party data, you can meet customer needs before they ask for it. This is a cornerstone of success, especially in the highly competitive world of online trading. After all, 63 percent of customers expect at least a certain degree of personalization from every service provider.
Creative ways to collect first-party data
Collecting data from first-party providers is a delicate art. Because consumers are unsure of how much the technology industry knows about them, this data may not be freely available. You have to offer something for it. 90 percent of consumers willingly offer first-party data when it's worth it.
Most importantly, you need to be transparent about how first party data is being collected and used. Consumers are cautious by default and you have to earn their trust. An open endorsement of the data we have collected from you and how it is used is the first step in achieving that belief.
Seven great ways to ingest first-party data
Let's discuss some ways you can help your business get first-party data that can help you take your business to the next level.
1. Add tracking pixels to a website
Tracking pixels are tiny – usually no larger than 1 x 1 – pixels that users rarely notice. These are installed on websites by coding and collect first party data about user habits.
This can include what pages are being viewed, what ads are of interest, and personal information, such as: For example, whether the user is browsing a mobile or desktop appliance.
This all sounds like cookies, but there is one key difference. Cookies can be deactivated or deleted as they are stored in the server's browser. A tracking pixel is included in your website so that data is recorded from every visit, regardless of which settings the user has activated.
2. Use a CRM platform
CRM (Customer Relationship Management) software is becoming increasingly popular with online businesses. Chatbots are perhaps the best example of this. Chatbots are not for everyone – many consumers still prefer to interact with a human – but 90 percent of companies claim that chatbots have improved the speed and efficiency of problem solving.
In addition, chatbots easily collect data from first-party providers. When a user has a problem or problem, they may get tired of waiting on hold for 15 minutes and then hanging up. Now that head start may be lost forever and you will never know what you are looking for. Even if a chatbot can't encourage a user to convert, you have an idea of what they were interested in. This will contribute to targeted marketing and user personalization in the future.
3. Reward users for sharing their data with you
As mentioned earlier, customers want to be rewarded for their data sharing. Ideally, this is an instant, tangible reward like a discount. At the very least, provide evidence that you are tailoring your service to the individual needs of consumers.
Not every company can provide instant tax motivation to every user. However, there are other ways to reward consumers as well. Monthly freebies are a great example, especially when advertised and managed through social media. Encourage people to like and share your post, and promise to offer an incentive to one lucky winner at the end of the month.
This is easily dismissed as a cynical marketing ploy, so you need to keep your promise. More importantly, you need to make it clear that you did this. However, when consumers feel they are faced with a shot of something for nothing, the more likely they will see the use of their data as a fair exchange.
4. Promote interaction
Buzzfeed might not be the first place many look to persistent journalism, but it has enjoyed excellent traffic for many years. Why? Because it encouraged interaction through goofy online quizzes that provided easy ways to collect consumer data.
This is not necessarily a model for every website. You need to protect your brand reputation. Inviting people to learn which pizza toppings best define them can do more harm than good. However, similar exercises around your business can encourage interaction. A quiz about your division that promises a graduation reward will generate interest.
Any competent SEO service agency will tell you that quizzes and other interactive elements on a page can also have the bonus of helping with SEO. This is because an important metric for Google to use when evaluating the quality of your website is the time spent on the page. If Google finds that your visitors spend several minutes looking at a page, that's a positive sign that the page is engaging and interesting to visitors.
Another strategy could be unlockable social media posts. Consumers will be fascinated by what you offer behind a sign. Paywalls will likely put you off, but promising content-based rewards for people sharing their data can be effective – if the outcome is worth the sacrifice.
5. Conduct surveys
Technological advancement ensures that all consumers now have a voice. They expect this to be heard. Never lose sight of the fact that consumers are in power in the 21st century. Negative reviews of products and services can cost a company up to 80 percent of potential conversions.
The easiest way to achieve this is to send surveys to your existing customers and even to potential leads. Don't expect a 100% response rate, especially if you don't offer a reward for consumer time. However, some will take the opportunity to share their views and give you valuable first-party insights.
6. Encourage registration
When running an ecommerce website, conversions are the most important bottom line result. This means that many companies understandably offer services that increase the likelihood of a sale. This could include guest checking out, a policy preferred by half of all online consumers.
The problem with checking out guests is that less data is collected than when a customer is signed in. Many consumers choose to check out guests because it is faster, offers more privacy (especially when paying with an e-wallet instead of a credit card), and theoretically protects their inbox from unwanted marketing communications.
However, as we have found, many consumers will provide data if you offer something in return. The most popular example of this is a discount on the first purchase. Combine that with a promise of personalized offers and an enhanced shopping experience, and you're more likely to see more signups.
Be careful what data you ask for. Be sure to explain why information is important. For example, if a credit check is not required, many customers may be reluctant to share their date of birth. However, if you promise to offer exclusive deals around the birthday, your reasoning will be far more convincing.
7. Host Events
Younger consumers value experience over results. Gone are the days of gaining total loyalty by providing goods or services at an affordable price. The rise of social media and its ubiquity in the lives of Millennials and Generation Z means a personal connection is required.
Live events can offer this. Host an AMA where an executive from your company answers questions about your practices. This can also be a great way to reassure consumers that you are acting sustainably and socially – something that is of tremendous importance to many modern consumers. A live product launch can be another way to attract users.
How does first-party data benefit? Registration is required to participate in the event. Even if the number of registrations is not reflected by the later participants, you have gained valuable data. You will also get insights from those attending the event, especially if you encourage interaction.
Mistakes to Avoid When Collecting First Party Data
As we have tried to point out, consumer data is a sensitive issue. First-party data is invaluable, but it must be accessed without betraying consumer confidence. Here are some key pitfalls to avoid in your data collection strategy.
- Don't ask for something in vain. The data exchange must be a consideration
- Avoid getting too personal – only look for data that is relevant to your business model
- Understand how the data will be used and allow consumers to opt out if that is their preference
- Handle the data responsibly, offer consumers added value and do not misuse the information obtained. Trust is hard to gain and easy to lose. As Google found, unethical use of data that violates trust can also be very costly
Is your website making the most of first-party data? Do you have any additional creative suggestions on how this information can be obtained for ethical reasons? These are the questions that will determine the success of your company in the future. Get on the first-party data train now. It has already left the station and is quickly picking up speed.
Joe Dawson is the director of the UK based strategic growth agency Creative.onl. He can be found on Twitter @jdwn.