h Star’s goals for category leaders: First party customer view //

This is the second part of a series that will cover the North Star goals and how they distinguish category leaders from their peers. You can find the first part, one-to-one, Omnichannel Personalization, here.

Customers today have two needs, sometimes contradictory. Customers want personalized content, offers, and experiences that are tailored to their needs. However they also need high levels of data privacy. Brands can improve customer experience and act as good stewards for customers’ private data.

My most recent book, “House of the Customer,” lists four North Star goals every brand should aim for, regardless of how lofty they might seem. The first goal, providing an omnichannel personalized, one-to-one customer experience, was discussed in the previous article.

This is the second of a series of four articles. I’ll be discussing how to have a true first-party customer view. It protects customers’ data and allows brands to use accurate insights to deliver great experiences.

Why is it so important to have first-party data?

You might be a little confused about this topic. You have a CRM and you have obtained consents and opt-ins to your email marketing. Let’s now discuss why first party data is so crucial.

The industry is changing

Next, I will discuss government regulation. However, the marketing technology industry is making huge changes. In some cases, it even amounts to self-regulation. These changes include:

• Third-party cookies are being deprecated — Apple and Microsoft were the first to do so, with Google following suit in the months ahead.
• Less invasive mobile device tracking.

Privacy-focused data cleaning rooms that only allow trusted parties to share information are disrupting the traditional use third-party cookies to target ads.

This approach allows publishers to create their own advertising networks or partner with other companies to increase their value. This approach gives advertisers and marketers greater confidence in reaching their audience in a manner that respects consumers’ increasing desire to protect their data.

Get deeper: Why clean data rooms

Compliance and regulatory requirements

There are many changes taking place in the industry. Some of these are driven by regulations. The world is moving towards greater transparency and oversight of consumer privacy.

The GDPR of the European Union leads the charge, followed closely by other states in California and other countries around the world.

Companies of all sizes and types need to adapt to this shift.

• Secure customer data.
• Learn how customer data is sourced, used and shared.
• To stay competitive, you must responsibly use it.

Dig deep: Why compliance is important in marketing

Personalization

Because personalized experiences require highly customized data, first-party data is essential.

You have probably already read the statistics about how more relevance leads to more customers, loyalty, and word-of mouth referrals. Although some people make exaggerated claims about personalization driving revenue, there is ample evidence to support the claim.

It is clear that brands need to adopt first-party information strategies. These are compelling reasons, but so is the fact your competitors may be investing and focusing on these areas. This makes it even more important to act quickly.

Get deeper: What’s personalized marketing?

What are the components of a first party data strategy?

Let’s now discuss the process of creating a first-party strategy for data. We will be looking at the three main components.

1. Unified customer views

The first component is about creating one view of your customer across all channels and platforms.

Marketing, advertising, CRM and customer service data can all be merged into one cohesive view to give us visibility throughout our business and the customer journey before, during, and after the sale.

2. Consolidated tools

Sometimes, the second component is a natural side effect of the first. The need to unite the customer view requires that all data collected, managed and analyzed be consolidated.

A customer information platform (CDP), at its core, allows seamless integration of disparate systems and removal of overlapping platforms. This is a sustainable way for customers to have a strong first-party view. You can also use tools such as customer journey orchestration or a next best-action approach to make decisions based on this view.

3. Governance of data

Customer data governance is the last component of a first party data strategy. Customer dissatisfaction can be caused by incomplete or fragmented data.

Your customers trust you greatly when you manage, update and collect customer data.

Data governance is not a one-off initiative. It requires ongoing maintenance and training for the people entrusted to valuable customer data. To ensure compliance with regulations and best practices, it is important to regularly review and update the guidelines for how customer data is used.

These three components can contain many pieces, but they give an overview of the scope and purpose of your first-party data strategy.

What does this mean for your marketing strategy?

While you might have all the elements mentioned above, a great first-party data strategy requires more than the right pieces. The key to its effectiveness is how you use these pieces. Let’s look at some ways that it could change the way you market.

It’s time for your brand garden to be planted

Companies that have been collecting first-party data for many years may not notice a significant change.

If you don’t have an intermediary to sell your products, or if your advertising relies heavily on third-party data, you should start building a solid infrastructure to communicate with your customers directly. A brand garden, or as some prefer to call it.

Ask the right questions, not just more questions

It might be easy to assume that the customer needs more first-party information means you should start asking them more questions. This is not always true. Customers want to share information that is relevant to your brand. This will allow you to better tailor your products and experiences.

Asking too many questions about products and services that aren’t related to them can cause customers to lose trust. Keep your data requests relevant and show customers the rewards for sharing more.

Consider a cooperative approach

Are brand gardens not the right fit for your business? Do you not have enough chances to directly ask your customers questions?

Consider collaborating with brands to increase your reach and personalize your messaging, offers and experiences.

This can include customer data clean rooms, joint efforts and other forms of collaboration. It is important to make your customers aware of what you do, with whom you are partnering and why they are benefitting. Customers are already concerned about their data being shared with unknown parties.

Even if your company is careful to only work with trusted parties, it is important that your customers are aware of the process you use to vet potential partners.

Although some aspects of your marketing remain the same, increasing your focus on protecting, utilizing, and collecting data from your customers will not only change your marketing, but it will also improve your brand’s future and help protect your brand.

How can I get started?

Although Google’s third party cookie deprecation dates still look uncertain, that doesn’t mean you shouldn’t start immediately. If you aren’t sure where to start, here are some ideas.

Find out the state of your first-party information

Start by understanding the current state of your organization’s journey to customer data maturity. Even though there are many dots to connect, you may be closer than you think to achieve a first-party data strategy.

Assess your third-party usage

Next, it is important to understand the extent of your reliance on third-party data as well as the potential impacts on your industry. You can begin planning right away by creating a gap analysis.

To fill in the gaps, create a first-party strategy for data

After you have completed the first two steps, you can now create a strategy or implement a plan.

• Fill in the gaps between your first-party customer information.
• If you reduce or stop using third-party data, compensate for any resulting problems in your marketing infrastructure.
• Create personalized customer experiences that your customers will love in the future.

Find the right balance for your first-party data strategy

You can balance two sets customer needs by having an effective first-party data strategy.

• You will first be able to provide a more personal experience.
• You will also have more control over customer data, allowing you to keep the highest level of privacy.

This is the third part of a four-part series. I’ll discuss why brands need to embrace the customer lifetime value model. What are the benefits for both the customer as well as the business?

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