Data is everywhere. And as a marketer, if you’re not sure how to swim in these murky waters, you will quickly drown. It can be tough to understand the different data types and how it impacts your marketing efforts. Stay afloat—read on!
Defining your terms – what is customer data, exactly?
At its most basic level, data is information. It’s a set of values that can provide context and insights when analyzed. When it comes to marketing, data can come from many sources— both online and offline.
First, what is first-party data?
First-party data is data that you collect yourself. Name, email, phone number, and depending on how you do it, industry specific. This type of data is collected through customer relationship management (CRM) systems, loyalty programs, and first-party surveys. Because first-party data comes straight from the source—your customers—it’s often considered the most valuable type of data as it provides the richest insights. Since this data is provided directly from the customer, you are not relying on AI or guessing games.
One way to collect first-party data is through surveys. You can use surveys to collect data about your customers’ needs, wants, and pain points. This type of data can be valuable as it allows you to get inside their heads and understand what motivates them.
What is third-party data?
Third-party data, on the other hand, is data that’s collected by someone other than you or your company. Advertisers use this in combination with first-party data both to better understand their target audience and to reach new audiences.
Advertisers collect third-party data through website cookies and mobile advertising IDs. These cookies keep track of any action that is taken online and use this information to build a customer profile. Once there is enough customer data, the profile is placed in segments, marketing personas, and advertising opportunities.
So, what’s the difference between first-party and third-party data types?
The biggest difference between first-party and third-party data is the source. First-party data comes directly from your customers, while third-party data is collected by someone else.
Another difference between first- and third-party data is accuracy. Third-party data isn’t always accurate as it doesn’t come from your customers. If you’re relying on third-party data to make decisions about your marketing efforts, you could be making decisions based on inaccurate or incomplete information.
While it’s not a key difference, it’s worth noting that third-party data is being phased out. Right now, marketers don’t know exactly when third-party data will no longer be available, but this change is inevitable and the time to prepare is now. Over the coming years, we as marketers will need to rely more on first-party data to segment and market to our customers.
Alright, now let’s talk about zero-party customer data
Although first-party data and third-party data are the two most common types of data marketers deal with, there is a third type of data that’s becoming more important: zero-party data. This type of data is collected when customers proactively share information with brands. Any time customers share their preferences, intentions, and/or needs with a company, they provide zero-party data. Unlike first- and third-party data, which is reactive in nature, zero-party data is proactive.
One way to collect zero-party data is through customer preference centers. These are online portals where customers can log in and update their preferences for things like email frequency, communication channels, and types of content they want to receive from you. By giving your customers the ability to actively share their preferences with you, you can proactively collect valuable zero-party.
Using your data – analyzing and interpreting your findings to make better marketing decisions
Now that you have a better understanding of the several types of data, it’s time to start using it to make better marketing decisions. The first step is to analyze your data and look for trends and insights. Based on these insights, you can identify segments and generate actionable steps that you can take next.
For example, let’s say you want to create a more personalized experience for your customers. You could start by looking at your first-party data to see what kinds of things your customers are interested in. If you notice that a lot of your customers are interested in a particular topic, you could use this information to create targeted content or offers that are relevant to their interests.
On the other hand, if you’re looking to reach a new audience, you could use third-party data to identify potential customers that fit your target demographic. Once you have a list of potential customers, you can then use first-party data to create targeted marketing campaigns that are more likely to resonate with them.
The bottom line is that data is incredibly important for marketers today. By understanding the different types of data and how to use it, you can make better decisions about your marketing efforts and create more personalized experiences for your customers.