First Party Data: Everything eCommerce Brands Need to Know
eCommerce brands rise and fall based on how well they know their customers. Marketing for eCommerce gets a whole lot easier when that understanding comes straight from the audience itself. Today, we’re talking about how you can develop that understanding using first party data.
What is first party data?
First party data comes straight from your customers or audience. You collect it yourself, using metrics you define around your business objectives. In effect, it’s a straightforward direct deal between your brand and its customers. People hand over their data in exchange for a better, more personalised eCommerce experience.
First party data vs second party data
Compare this to second party data. This is data collected by another company, not your own business, and sold to you for use in refining your eCommerce strategy. It doesn’t come direct from your audience, but second party data should still be relevant to them and their needs.
Web browsing activity, app usage, and social media information are common types of second party data. In most cases, you’ll be able to pick and choose what details are most relevant to your goals.
First party data vs third party data
Third party data comes from specialist companies, aggregators and independent researchers. Usually, their main job is to conduct surveys and interviews to gather big-picture data. Industry trends, demographic information, and generalised behaviours typically count as third party data.
This data is usually easy to find and purchase for now, but time is running out. Google is getting rid of third party cookies by the end of this year (2022), so it’s a good idea to prepare for a cookieless future and look at other options.
Why should brands use first party data?
eCommerce marketers love first party data in the same way as historians love first-hand sources. You’re cutting out the middlemen and getting information from the most direct, relevant place. This data is ideal for developing your brand’s strategy because it’s:
- High-quality: It comes from one clear source – your customers, and it concerns your business directly
- Compliant: Customers give explicit consent for their data to be used to craft a better experience, so everybody wins
- Accurate: You know precisely what metrics you’re measuring, with nothing lost in translation between sources
- Relevant: The info you collect is about your customers and your business, tailored to your goals
- Cost-effective: You collect and own the data yourself with minimal setup costs to collect it
Using first party data, you can personalise an eCommerce experience for customers far more easily. With second or third-party data, you risk bumping your head against the constraints of how that data was collected. It comes from another organisation, whose goals will never align 100% with your own. If you want a job done right, do it yourself.
What types of first party data are there?
So, what does first party data typically look like in the real world? That depends on what you’re trying to achieve with your overarching eCommerce strategy, but common examples include:
- Web browsing behaviour recorded via tags on each page of your site
- Subscriber data to provide insights into who enjoys your content
- Social media data, showing why and how people interact with your brand
- Purchase information that breaks down the end-to-end customer journey
- Cross-platform data, analysing how customers move between different facets of your online presence
- Surveys, straightforward question-and-answer sessions to find out exactly what you need to know
- Feedback, both positive and negative, to gauge the audience’s reaction to your brand
- CRM information, leveraging information which you may already possess
You don’t necessarily need to record all of these things. A major benefit of first party data is your ability to tailor the details you capture around your own needs; no time or effort gets wasted on things you don’t need to know. In fact, customers will thank you for respecting their time and privacy, building more goodwill for your brand.
How to collect and use first party data
The most important thing is to have the properly recorded permission to collect first party data from an informed customer base. With that, the methods you use to gather the data are limited only by your creativity and the constraints of the technology you use.
This can be as simple as using Google Analytics and periodic surveys delivered via an email marketing list. However, that might not give you the depth of insight you need to fully leverage your audience’s potential. Simpler solutions are prone to blind spots when users navigate away from the platforms which you’re able to easily track.
At ChannelSight, we provide a Where to Buy solution which captures the entire path to purchase. Without using cookies, it tracks multiple channels to see exactly how users are behaving and what campaign elements are resonating with them most strongly.
That’s really the kind of depth you want to be aiming for, considering the freedom you have to define the most relevant metrics. If you’re developing your own system, use a mix of:
- Data management platforms
- Social media
- Customer service records
- CRM systems
- Point of purchase data
- Offline marketing, including direct mail
Once you have your data, you’ll be able to engage more customers by advertising in the proper context far more efficiently. That is, of course, if you do it right.
Overcoming the challenges of using first party data
No system is wholly perfect. Even if you’re armed with all the information you could ask for, you need to implement it in the right way. First party data marketing typically finds itself confronted with four principal challenges:
The need for strategy
That’s some nice first party data you have there. What are you going to do with it? Before you even start gathering information, you need to set clear and specific objectives. Otherwise, you risk engaging in a mad dash for details which you may not even need.
Look at what gaps exist in your understanding, and think critically about the most effective questions to ask in order to fill them.
A crisis of identity
Your customers use a whole host of different channels to interact with your brand. The bigger and more varied your online presence becomes, the harder it gets to consolidate information into one clear profile. However, it’s a task which is absolutely essential to your effective use of first party data.
Identify touchpoints which will help merge activity across platforms. Avoid hassling people with the same questions on different profiles by tailoring questions carefully to the nuances of each space.
Even with a strong first party data marketing strategy, you’re still likely to rely on information that’s siloed away with third parties. If you’re pulling your own solution together using analytics, email marketing, surveys and the like, you need to get data out of those silos and into your big-picture vision.
Look carefully at what tools you’re using to pull data together and how much control they give you over details which are yours by right. Don’t be afraid to ditch a tool if it’s creating friction between you and the desired result.
Urgency and entropy
Data isn’t fixed in place forever; it decays like any other organic element. Behaviors evolve, tastes change, products go in and out of fashion. It’s absolutely vital to develop a robust pipeline between incoming data and actionable insight. Otherwise, you’ll always be reacting to what should be a highly proactive process.
Done right, first party data is a solid way for eCommerce brands to deepen their understanding of their customers, and leverage it to drive sales. With the right tools and some strategic thought, you’re on the right track to a solid marketing ROI.