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Editorial

The 3 Key Components of a First-Party Data Strategy

4 minute read
Greg Kihlstrom avatar
Customer expectations are rising as data privacy demands are growing more complex. A first-party data strategy can help you navigate between the two.

Customers continue to demand more personalized experiences, even leaving brands that fail to provide the level of service they expect. But at the same time customer expectations are rising, the data privacy demands that eschew third-party data harvesting and identity stitching are also growing in complexity. All of this adds up to a need for brands to create a first-party data strategy that allows companies to collect information directly from consumers, and consumers to receive world-class customer experiences in return.

Easier said than done, you might be thinking. In this article, I’m going to explore the key components of a first-party data strategy that will set your organization up for success amidst the continual changes and escalation in customer expectations.

You Can't Improve CX Without Unified Customer Views

Delivering personalized content, offers and experience isn’t possible if you don’t know your customer and have the data to support it.

The first component of a first-party data strategy is a unified view of consumers, whether potential, current or lapsed. By creating this single view of an individual, we are tying marketing, advertising, CRM, customer service and other data together into a single cohesive view so we can provide a better experience through personalization, automation and tailored customer support. In almost all cases, this means the adoption of a customer data platform, or CDP. Sometimes this is a single, off-the-shelf system, and in other cases a CDP may be a collection of purchased SaaS products and custom-built data and reporting tools. How complex your CDP is can be a reflection of how broad and nuanced your customer base is, and how you communicate and interact with them.

A unified customer view is the cornerstone of a first-party data strategy. Without it, the building blocks for improved customer experience simply won’t exist.

Related Article: The Demise of the Cookie and the Rise of First-Party Data

Next Up, Martech Consolidation

You will need to rethink the platforms and services you used to serve customers more generalized content, or that relied on third-party data services, sometimes from the ground up.

The second component of a first-party data strategy requires examination of the platforms and integrations you will use to put the unified customer profile to work. With a CDP at the core, a solid first-party data strategy consolidates outdated or redundant platforms while enabling other advanced marketing tools like customer journey orchestration and next best action tools to provide a more personalized experience.

When creating your first-party data strategy, you should also evaluate the relationship between your CRM system, your marketing automation platforms, email providers, data management platform (DMP), and many others. Most CDPs will easily integrate with all of these, but it’s not enough to just have all of the data flowing in one direction.

Instead, a first-party data strategy allows you to engage in personalized marketing and customer experience in new and expanded ways. Starting with unified customer profiles, you can then build towards a consolidated tool set of personalized marketing and communication platforms that can deliver the type of tailored, dynamic experiences your customers expect.

Learning Opportunities

Related Article: Digital Experience Platforms Need Integrations Business Users Can Set Up, Not Just Developers

Don't Forget Data Governance

Understanding how you will utilize your customer data to provide great experience is a key component, though consumers are also increasingly aware of data privacy issues which can prevent them from providing their information to brands they deem to be less trustworthy.

The third component of a first-party data strategy is all about helping your organization manage the risk associated with collecting and storing your customer’s data. Fragmented data poses risk, and inaccurate or incomplete data causes customer dissatisfaction.

Consent management platforms (CMPs) play a big role here, particularly at the enterprise level, though any organization operating globally should strongly consider centralizing this role. There are many CMPs to choose from, that can fit a wide range of needs.

This is not solely about software and storage, however. The processes and teams involved in data governance can have as much impact on how a brand acts as steward of their customer’s valuable information, and continues to earn their trust.

A first-party data strategy requires planning around the collection of customer data, how that data is used to enhance the customer experience, and how your brand will earn the trust of consumers over time. By taking these three components into consideration, you will be able to create a winning approach to the first-party marketing and customer experience era we are entering.

Related Article: Is Consent and Preference Management the Key to Balancing Privacy and Personalization?

About the author

Greg Kihlstrom

Greg is a best-selling author, speaker, and entrepreneur. He has worked with some of the world’s leading organizations on customer experience, employee experience, and digital transformation initiatives, both before and after selling his award-winning digital experience agency in 2017.

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