We live in a data-driven world, and many brands rely on data to glean customer insights that help grow their business.
Most of what we see and do online is driven by our previous actions and the information we’ve shared, either intentionally or via our day-to-day activities.
For years, brands have relied on cookies to track website visitors, improve the web experience for users, and collect data that aids ad targeting. Cookies also enabled brands to learn what customers were up to online when not on the brand’s website. This practice chugged along until Google announced its plan to phase out third-party cookies on Chrome browsers by 2022.
The announcement was no surprise. Privacy has long been a hot topic globally as new regulations and laws cropped up limiting the use of third-party data and the sharing of consumer data.
So, what can brands do to maintain a personalized buyer experience while respecting customer privacy?
In this article, we’ll go over the basics of different type of data you can gather, and how to prioritize customer-first data.
Third-party data is information companies collect without having a direct relationship with the consumer. Gathered through a third-party data company, third-party data is always readily available, and its breadth and scope are typically greater than what you can collect in-house or directly from the customer.
It’s often purchased or obtained from third-party sources or websites and can include demographic information, buying signals, and more.
Before the internet, it was difficult to access third-party data. But once everything went online, the amount of data available exploded. However, to the chagrin of many marketers, third-party data is becoming harder and harder to access. The good news is third-party data isn’t the totality of consumer information. Read on to learn about zero-, first-, and second-party data and how you can collect and use them to supercharge your advertising.
Even the least savvy of consumers know their online behavior is tracked in some manner and that their behaviors feed the algorithms that fire ads and other content specific to their interests and activities. As privacy concerns continue to grow, brands must be more cognizant of the data they use and how they gather it.
While many marketers initially balked at the death of third-party data, the truth is that zero-, first-, and second-party data bring more valuable insights than third-party ever could.
Zero-party and first-party are also known as customer-first data, as it’s information a customer has shared directly with your business either outright or in the way they interact with your brand. Second-party data is one step removed from customer-first data, but is still an important avenue to know about.
Zero-party data is an incredibly powerful tool for brands to leverage. As previously mentioned, it’s information a customer has intentionally shared with you, like purchase intentions, personal context, and how they want the brand to recognize them.
Fatemeh Khatibloo, a former VP principal analyst at Forrester, notes zero-party “is gold” before expanding to say, “When a customer trusts a brand enough to provide this really meaningful data, it means that the brand doesn’t have to go off and infer what the customer wants or what their intentions are.”
Many brands rely on surveys and questionnaires to capture information directly from buyers. Don’t want to burden a customer new to your page? Simply ask what brought them to your website today: Are they looking for a gift? Shopping for themselves? Whatever you ask, keep it simple.
First-party data is information you gather from users and customers through direct interactions with your brand on your owned channels. It’s the most valuable data for personalization, taken from a consumer’s behavior site-wide, in-app, and on-page. This includes a person’s clicks and in-depth behaviors like hovering, scrolling, active time spent, session context, and how the person engaged with personalized experiences. Other examples include transaction data like purchases or downloads.
First-party data allows brands to glean valuable information about an individual’s interests and intent. Because it’s collected directly from the source, first-party data is more accurate, relevant, and valuable to your business.
Finally, for the sake of giving you all the relevant information, let’s go over second-party data (not considered customer-first data).
Essentially, second-party data is someone else’s first-party data that you’ve purchased or otherwise obtained. The other organization or brand gathers this data firsthand from their audience, which can include activity on websites, apps, social media, in-store purchase history, survey responses, and more.
To access second-party data, you must have direct interaction with the organization that initially collected it. For example, if you’re an independent merchant who makes their own products and has them hosted on another eCommerce platform (e.g., selling through another merchant’s store), you could purchase customer data from your selling partners, and vice versa.
In any case, the purchase of second-party data happens directly between two organizations and the exchange or purchase must occur as part of a direct interaction with the party who has gathered that information first-hand. This differs from purchasing third-party data, where you would work with a data aggregator.
A second-party data arrangement gives you more flexibility in the transaction and ensures you receive high-quality data that allows you to build business relationships while simultaneously expanding your audience. You may also be able to negotiate your partner gathering additional zero- and first-party data, which can drive your marketing efforts and be exchanged within HIPAA, FCRA, FERPA, GLBA, ECPA, COPPA, VPPA, GDPR, PIPEDA, and other privacy guidelines.
Now that you know the different types of data, you need to consider how to begin gathering that information to use in your business.
Zero- and first-party data will help you achieve personalized experiences and better buyer relationships. You’ll be able to serve valuable content and relevant product recommendations adapted to your customers’ preferences and stages in the buyer journey.
Below are a few ways to gather that coveted customer-first data.
The easiest way to get information is to ask for it. You can request feedback directly from your customers to learn what they’re interested in, what they like and didn’t like, and how they’re using your products. This is a straightforward way to capture data and reap actionable insights for your business.
To help you gather this, we suggest framing it to showcase how providing that feedback will benefit your customers. For example, in a survey you might say “your answers will help us prioritize releasing new products that you’ll love.” Or, in an email, you could say “we read every response to fine-tune the deals and discounts we send you.”
A big part of first-party data is understanding customer behavior on your owned channels. To capture this information, session monitoring tools are key. Session monitoring shows you how your customers interact with your channels from their perspective, giving you the information you need to understand how your channels are performing.
These tools can reveal important information about a user’s scrolling, clicks, and time spent on-page, and give you insights into their buyer journey. You can use this information to retarget those customers later, for example, if they spent time on a particular product page, scrolling and clicking on content, but didn’t buy.
They also help you understand where and why customers drop off their journey. This allows you to optimize your pages and improve your customer journey flow.
Content marketing strategies are a win-win for eCommerce brands today. A great way to learn what kind of content to serve your customers is to ask for their newsletter preferences.
When users opt in to your newsletter or other marketing activities, you can instantly gain access to important preferences and information about them. For example, you might ask for a checklist of what information they are most interested in before signing up, or you can list the different types of newsletters you offer and allow them to choose which list they should go on.
The type of newsletters your customers opt-in to will reveal much about their preferences. In addition to delivering more personalized content, you’ll understand whether a shopper is interested in children’s clothing, mens or womens outfits, outdoor gear, and more. You can draw insights from these preferences to further tailor your communications.
Similarly, you can glean insights from your newsletter open-rates and click-through rates (CTR) to discover their interests and hobbies.
Surveys and quizzes are fantastic methods to capture zero-party data. You can use these powerful tools in a number of ways, depending on your brand and your goals.
A pop-up on your home page could ask what kind of products your customer is looking for. Based on their response, you can then recommend product pages instantly to deliver a personalized and optimized shopping experience.
A fun quiz as shoppers browse can help them discover the right products for their preferences. For example, the makeup brand Il Makiage offers customers a quiz to find their “perfect match” for makeup. Once they’ve been matched with the right shade, the brand recommends other products that complement both the shade and the product type as part of an upsell/cross-sell strategy.
On your order confirmation page, you can invite a customer to participate in a survey sharing their preferences and feedback. An incentive to fill this out could be to get 10% off the next purchase, or instant access to a newly released product.
Using pop-ups or quizzes early in the customer journey offers you a two-fold benefit: First, it can boost engagement and conversion rates, which drive up your revenue. Perhaps more importantly though, it also delivers valuable data to further optimize your website, improve the customer experience, and target your customers more effectively.
Seeking feedback at the end of a customer’s journey, whether at the checkout confirmation stage or via email after the purchase is complete, also benefits your brand in several ways. Beyond collecting more data about your customer, it demonstrates to your customer that you care about their feedback and thus can breed customer loyalty.
When a new customer comes onboard, inviting them to your loyalty and/or rewards program enables you to collect valuable data about them, like their shopping habits, preferences, and interests.
These programs can run the gamut from points per dollar spent to insider information and early access to new products. In any case, the information your customers share during this onboarding process helps you target them with content they’ll find relevant and exciting.
Your cart abandonment trends deliver important information about your customers and buying experience. These trends demonstrate important thresholds concerning customer tolerance for fees and help you uncover customer behaviors.
For example, some customers add products to their carts and then abandon them because online shopping is a habit or way to kill time — they have no intention of checking out and completing a purchase.
With the appropriate data, you can deduce insights about who your audience is, what they are interested in, and reduce your cart abandonment rates.
Net Promoter Scores (NPS) is a customer loyalty and satisfaction measurement derived from asking customers how likely they are to recommend a product or service to others. It operates on a scale of 0-10. From this score, you can identify Detractors, Passives, and Promoters. This score will show you who your biggest fans are, and who you need to work on.
Customers who rate your product or brand from 0-6 are “detractors.” This means they’re unlikely to recommend your brand or product to others and probably won’t stick around for a repeat purchase. Worse, they may even discourage potential customers!
Customers who rate your product or brand a 7 or 8 are “passives.” These customers are not actively recommending your brand, but are unlikely to damage it. Passives are very close to becoming promoters and can be won over. This is a space you should investigate and see what it takes to convince them.
“Promoters” are customers who rate your brand and products a 9 or 10. These enthusiastic and loyal customers act as brand ambassadors to enhance your brand’s traction, increase referrals, and make repeat purchases.
Capture NPS via website surveys, in-app surveys, or email newsletters and use these scores to target and retarget your customers. For example, if you have happy customers, you might want to invite them to leave a review or join your referral program.
Customer support is one of the few places customers volunteer information to your company. You can analyze the wording in the tickets you receive to watch for trends, and segment your customers based on the type of tickets they send in.
For example, if someone sends in a question about auto-replenishment, and they aren’t a customer yet, you can mark them as interested in the program and potentially open to more information about it.
Many customers value additional support during their online experience. Making customer support easily accessible can help you identify needs more quickly so you can take action and customize the shopping experience for them in real time (or close to it). Customer service integrations like livechat capture real-time information about a customer’s experience and journey for your records.
Your CRM is full of information to glean actionable insights from so you can improve your customer outreach and marketing efforts.
For example, depending on the type of information you capture and store, your CRM can segment your customers by characteristics like profession, title, family data, the number of times they’ve visited your site, newsletter preferences, and more.
This data can then inform your future ad campaigns and marketing efforts; for example, displaying baby products to customers who’ve perused items for newborns and including baby content in their newsletters, or giving incentives to customers who visit often and fill carts, but don’t purchase so they’ll head to the checkout page.
Customer insights are critical for any business seeking to retain their customer base and make smarter decisions. As third-party data becomes more difficult to obtain and customers demand more in the way of both privacy and personalization, eCommerce professionals need to get serious about sourcing the right customer insights.
At first glance, it may seem like the loss of third-party data is detrimental to your business. In reality, it’s opened the opportunity for you to lean into zero-, first-, and even second-party data sources to uncover actionable insights that deliver more value and drive your business forward, faster.
Remember, the more direct information you receive, the more relevant and valuable the data is to your business. Collecting feedback and digging into customer behaviors and actions on your channels will uncover the strongest insights that allow you to make the right decisions for your business.