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Why it’s time to ditch third-party data & embrace first-party data

0 min readLast updated: June 6, 2022
Written
Ramin, a Managing Partner at SKU Agency focused on growing your business through strategy, technology & design. Ramin loves to devour business books, podcasts, and blogs. In his spare time (which is minimal) he enjoys hanging out at home with his wife and three kids - and occasionally riding the Peleton.

Google announced plans back in 2020 to ban third-party cookies from Google Chrome, meaning third-party cookie vendors would no longer be able to track user behavior across the internet. Though it’s had some issues delivering the technology that will honor that promise while also keeping advertisers happy, Google is still moving forward with the plan and claims it will end third-party cookie use by the end of 2023.

Why first-party data is better

We’ve always said you have to know your customer to market to them effectively. First-party cookie data is data you glean from your relationship with your customer. It’s data you get from knowing them.

Deeper user knowledge and higher-quality leads

First-party cookies track the actions of the user while she is on your website or engaging with one of your other owned marketing channels. The data’s available to you because you have a direct relationship with that user, i.e. they visited your website, filled out a form, interacted with one of your Facebook posts, etc.

So when you capture first-party data, you’re gaining information on customers that have already shown an interest in your product. You’re getting data that customers have consented to give you, and you can use that data to prioritize those customers with a proven interest in your e-commerce business. You waste less time and money on poorly-targeted leads, and your sales conversions from those high-quality leads are higher.

Connect with customers through your owned marketing channels

And because you know your customers, you can tailor your owned marketing channels like your website, email & SMS marketing, and social media profiles to resonate with precisely the type of new customer you’re trying to attract. You’re not casting a huge, internet-wide net. You’re casting a nimble, bespoke net that captures excellent, purchase-primed leads.

Klaviyo calls this “flipping the funnel.” As top-of-funnel costs like pay per click advertising continue to increase and third-party data dries up, investing in your owned marketing channels is a smarter way to move forward in a post-third-party data world.

What first-party data to track

To get first-party data that will be meaningful for your digital marketing campaigns, it helps to collect these two types of user information:

Focus on behavioral data

Behavioral data describes the way users interact with your e-commerce business, like which pages they visit on your website or which links they click in your email marketing campaign. Knowing what website features, products, or email/SMS marketing campaigns resonate with your customers will help you make those assets more productive.

Use demographic & psychographic to flesh out user profiles

This type of data helps you understand why your customers behave the way they do on your website. You can use this data to explain behaviors, such as the marked interest from a younger age demographic in your trendier products. You can also use it to deepen your relationship with your customers, like sending an SMS campaign that offers promotions based on their age, location, etc.

When you collect a lot of behavioral and demographic/psychographic data, you can start to make correlations in those actions. Maybe you find that customers in a specific age range tend to open SMS messages later at night, so you start messaging them later with targeted promotions at a late hour.

Or maybe customers in New England are more likely to purchase your seasonal products. You could offer discount codes for relevant products based on their area: sunscreen for those who live near the coast, barbeque equipment for those who live in the suburbs, hiking gear for those who live near the mountains, etc.

You can even hyper-focus your messaging to respond to current events in the area, like offering a discount to celebrate a local sports team winning big.

How to collect first-party data

Like any good relationship, knowing your customers starts with a conversation. To understand your customers, ask questions and listen to the answers. You can ask them to tell you more about their needs and their purchasing decisions at every interaction.

Subscribe forms

Image of young female reading sms on the phone in cafe[/caption]

While you’re collecting name and email address for your newsletter signup, ask a few high-level questions about customers’ interest in your products. If, for instance, you are a women’s hair care brand, include one question about their hair type: curly, straight, wavy, etc.

Don’t ask too many questions, though. If you overwhelm your customers with a barrage of questions, you risk turning them off. Just ask 1 to 3 quick questions and then allow them to sign up for your newsletter or blog.

Post-purchase surveys

After a customer has received their product, reach out with a (brief! 4 to 5 questions) survey to find out more about why they purchased your product and how they intend to use it. An art supplies brand may ask whether a customer is into painting, drawing, or crafting. When your customer responds, you can use their answers to hone your marketing even more.

Quizzes

Quizzes are fun for customers because, let’s face it, we all like to talk about ourselves. So when you send customers a quiz, you allow them to tell you more about themselves in greater detail in a fun and amusing way.

If you’re a sporting goods business, you can ask what sports they’re into, how many times they play per week, how many years they’ve been playing, and whether they play in any local clubs or teams.

Then you can use that first-party data to offer them even more personalization, deepening that customer-brand relationship as you do.

Get the most out of your digital marketing.

Our clients average a 38% INCREASE IN REVENUE with email and SMS marketing.

How to use first-party data

The more you know about your customers, the finer you can segment them based on interests, purchasing history and preferences, and SMS and email marketing engagement. You should even note whether they’ve spent a lot of time on particular pages of your website, like your Returns Policy page or your About page. Each segment should receive  targeted marketing campaigns that are tailored to their interests.

Those segments will be evolving all of the time, with new customers added to each segment and others leaving segments and being reclassified into another on a daily basis. It’s not feasible to segment your customers manually, but our team at SKU can help you set up automated segments in Klaviyo or another marketing automation platform.

We can also help you define your segments and create the content in your email and SMS marketing messages that will most resonate with each customer segment. Schedule a time to talk, and we can discuss the first-party data you have, the first-party data you’d like to have, and how to use it to connect with customers and drive more sales.

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