Nothing is more important than a marketer’s first-party data. This is a fact that most marketers probably appreciate. However, first party data only represents a portion of your customer’s life.
Third party data provides insight into what customers do when they are not interacting with you and allows you to make smart decisions based on insight greater than what you can extract from your first party data.
Examples include life events they are experiencing and where they spend their money (when it’s not with you).
The ability to make so-called ‘Smart Decisions’ relies not just on knowing what data is important, but also knowing how to use it. This means you either need to become a data expert and learn how to sift through the available third party data options, or work with a company with the required expertise who can help you reach your goals.
What follows is a quick guide on how to make the most of your first party data and how best to incorporate third party data into your marketing mix.
Step 1 – Understand your first party data
Audit your first-party data. If you have data residing in disparate parts of your business, employ tactics to create a single customer view. Areas to pool your data from include:
- Data from your CRM system
- Any historical marketing data you have
- Data captured on your website
- Email subscriber lists
- Any behavioural data you have on browsers
- Social interaction data (interactions with your social profiles)
- Cross-platform data from mobile web or apps
Then you need to ask yourself
- What’s the source of that data?
- Are we still allowed to use this data? Do I have opt-in where necessary?
- How can the data we have help us better understand our customers?
Step 2 – Fill in the gaps
Once you have a better understanding of your first party data it will probably be fairly evident that you do not know everything about your customers. Of course, the goal here isn’t to know everything, it’s to know enough that will help you achieve your business goals. Even considering this there will almost certainly be gaps in the contextual information around your customers.
Ask yourself, can you develop a strong customer profile with the data you have? Are those profiles clear personas of individuals? Do you have enough to accurately drive business decisions? Are they robust enough to power consistent segmentation and relevant personalisation?
For example, if you’re looking to optimise your spend by channel, do you know which channels your customers are most receptive to?
If the answer to any of the above is ‘no’ then you need to work to plug those gaps and secure access to the relevant data. Of course, you can attempt to gather this data yourself but this is a laborious process that will take a fairly momentous effort and inevitably quite a long time. So, while it’s worth putting processes in place to capture the relevant data where appropriate you need to explore other options for immediate success.
You’ll need to work with third parties that can fill in the gaps and help you to create or improve your single customer view with data points such as demographics, channel preferences and wallet share to enable segmentation and personalisation.
Not all data is created equal
But third party data is a potentially tricky topic. There are plenty of vendors out there but the quality of the data you use is critical. Just because a data source is cheap doesn’t mean it is the best option. Whether you’re buying demographic data or digital behavioural data, marketers should assess third party data on three key factors:
Compliance: Ensure you are working with a reputable and consumer-privacy compliant data provider. Ask how they procure the data and what measures they take to ensure consumers are given notice and choice about the use of their personal information. In the current climate this is critical. If you’re looking to offer valuable and seamless customer experiences the last thing you want is to use data which is questionable.
Volume: It’s not always about who has the most data. Instead, consider the completeness and consistency of that data. You want to know the quality and reliability across the entire database and have full transparency on potential regional or demographic biases.
The right data: A simple one and a key one. There’s no point in purchasing access to data that isn’t going to help you achieve your business goals. Make sure you have a clear understanding of what you’re trying to achieve and if necessary turn to data experts to support your efforts. Many data providers (such as Experian) offer consultation or managed services. Don’t be afraid to ask for support and be wary of providers who are happy to simply hand data over without much thought for how you can make it successful.
Fostering an insight-driven marketing mindset
Once you have data sets that are complete and robust enough to power reliable segmentation and personalisation, use customer insights to drive marketing campaigns and deliver relevant and engaging personalised content.
Align your technology
Finally, executing personalised marketing campaigns requires technology. Often, technology limitations drive our data and marketing design. Instead, technology infrastructure should be driven by data and business objectives.
As an industry, we need to understand that more than just data and marketing need to be aligned. Technology must be aligned as well.
In order to evolve from a data-driven to an insight-driven approach, relevant behavioural data and the technology and analytics that make sense of that data are a requirement.
Experian Marketing Services helps bring brands and customers closer together. Using our own industry data and analytical expertise we can help businesses build up an accurate and actionable understanding of their customers and using the Experian Marketing Suite technology, accurately engage with them.