April 24, 2018

Data-driven marketing is a prevalent buzzword in every marketer’s life, and no doubt you are among the many marketers feeling the pressure to make the most out of your data. According to CMO.com, more than half of marketers agree that “a demand to deliver more relevant communications and be more ‘customer-centric’” is among the most important factors driving their investment in data-driven marketing.

With this intense demand for data, it’s critical to know what is available. While you might be doing a smashing job when it comes to creating customer-centric content, personalizing email communications, or using split testing to create better subject lines or offers, adding the benefit of the right data to the equation can raise the bar and create even higher response rates, ROI, and engagement.

Let’s take a look at the three different data types available.

1ST-PARTY DATA

This is your data. It’s your in-house databases along with any other related customer data that your company collects. Think transactions, your mobile app and website, in-store beacons, contact center, CRM system, surveys, behavior and purchase history, customer service calls, emails, click-throughs from email marketing campaigns, and content downloads—all this is first-party data.The biggest value of first-party data (besides the price tag: free), is that it provides you with absolute and accurate information about the people who are currently converting, and it gives you the opportunity to mine additional information from it. Using data analytics, models can be built to help you identify the characteristics of your most loyal customers, allowing you the opportunity to target prospects with these same indicators.You can also use analytics to compare groups, such as buyers vs. nonbuyers, to understand what makes your purchasers unique. With this type of detailed insight, you can identify the best prospects and create extremely accurate and relevant customer journeys that are tailored to those most likely to convert.

First-party data has high relevancy and transparency, but it can have limited reach and scalability.

2ND-PARTY DATA

This is your data. It’s your in-house databases along with any other related customer data that your company collects. Think transactions, your mobile app and website, in-store beacons, contact center, CRM system, surveys, behavior and purchase history, customer service calls, emails, click-throughs from email marketing campaigns, and content downloads—all this is first-party data.The biggest value of first-party data (besides the price tag: free), is that it provides you with absolute and accurate information about the people who are currently converting, and it gives you the opportunity to mine additional information from it. Using data analytics, models can be built to help you identify the characteristics of your most loyal customers, allowing you the opportunity to target prospects with these same indicators.You can also use analytics to compare groups, such as buyers vs. nonbuyers, to understand what makes your purchasers unique. With this type of detailed insight, you can identify the best prospects and create extremely accurate and relevant customer journeys that are tailored to those most likely to convert.

through direct relationships with outside sources or directly from other businesses. This type of data is essentially another company’s first-party data that is shared with you.How might we receive and use second-party data? Consider co-oping with businesses or using the services of second party data aggregators. Many noncompetitive, complementary businesses working in similar spaces and sharing similar audiences make for great second-party data partnerships. For example, if you are in the landscape business and team up with a company that provides pool maintenance services, the information shared between your organizations could be highly valuable for both parties involved.

An appliance retailer could contract with a second-party data collector to access the website-browsing audience of an appliance manufacturer, placing retargeting display ads to an already-interested audience. By pulling second-party data via Google AdWords, you can provide key terms based on user actions throughout Google Search. This type of information is unique to your company; however, it comes to you via an outside source—Google. You can use several mechanisms to collect and use second party data, each requiring different levels of investment of time and resources.

Word to the wise: don’t throw caution to the wind! Second-party data options and opportunities can be a legal minefield, requiring deep levels of knowledge to navigate privacy compliance. Look to the experts for help.

Second-party data can have mid- to high-range relevancy, scalability, and transparency, depending of course on the accuracy of the data within the partner organization.

3RD-PARTY DATA

Although much more commonly discussed than second-party data, many marketers miss out on fully leveraging third-party data. Third-party data comes from compilers such as Acxiom, Epsilon, and Experian and originates from a variety of places, including surveys, panels, opt-in online tracking, cookie-based tracking, registrations, public records, and offline transactions.

This data is extremely useful for a variety of marketing tasks and can significantly improve the ability to make thoughtful evaluations. By allowing the marketer to apply audience-based demographic look-alikes and access dozens of consumer- and business demographic overlays, today’s marketers can use data analytics to create database segments and entirely new target audiences.

While many reputable companies are gathering and offering third-party data, buyer beware: you can and should ask questions before making a purchase. To find the best third-party data partners, consider the following questions: How do they collect data? Is the data cookie-based only, or do they have access to offline activity? Is the data extrapolated? How many times does a user take action in order to fall into a segment, and how recently does the action have to be taken for them to be documented and collected? How fresh is the data?

Third-party data scores high in reach and scalability but lower in relevancy and transparency.

BRINGING IT ALL TOGETHER

Most marketing executives strongly agree that data-driven marketing is crucial to success, and with these handy tips, you, too, can start using first-, second-, and third-party data to your advantage.

While the availability of more data than ever before is changing the marketing landscape, we leave you with this one thought: remember the customer. Every step you take toward implementing a data-driven approach should create a more simplified and customized buyer’s journey. With this in mind, use data to create a more relevant and personalized experience, and your campaigns will be exponentially more successful!

By the way, have you been wondering how popular data-driven marketing is? According to the 2017 DMA Statistical Fact Book, 966,000 jobs have been created by the US data-driven marketing economy!