Getting to know your customers is the backbone of business. Without knowing who you’re targeting, what information and products they want, and how they act, you’re arbitrarily trying marketing and sales strategies without any useful audience data.
Today’s consumers crave personalized experiences that are tailored to their unique pain points and lifestyles. In fact, thanks to AI-powered pioneers like Amazon, shoppers expect personalized experiences from the brands they buy from. In a survey by Epsilon and GBH Insights, 80% of respondents said they absolutely want high-quality, personalization from retailers.
But capturing data that helps you decipher what exactly what your target audience is easier said than done - it doesn’t have to be mind-numbingly complex, though.
There are four different types of customer data you can leverage for your digital marketing initiatives, each of which provides insights into a different aspect of your buyers and comes from a different source: zero, first, second, and third party data.
First party data is the most common because it’s the kind of data brands have quick access to. However, the secret sauce is combining all four kinds of data collection so you can get a 360 degree view of your customers and their needs.
Zero, first, second, and third party data are all important in their own right, with third party data providing a general view of your customers and zero party data providing a more focused, personalized look into their likes and dislikes.
You might have come across the term zero party data a lot recently. This is because Google and Apple have tightened their data privacy settings, allowing consumers to opt out of supplying data to fuel ads and other marketing efforts. As a result, brands are having to glean information directly from their customers, which is known as zero party data.
Zero party data is essentially data that your customer is directly providing to you, and can include:
This type of direct customer feedback can help you drill down into the unique needs of every single customer and provide a truly personalized experience through your ads and sales cycle. It's the most useful for building detailed customer profiles that you can specifically market to.
Arctic Cool collects customer attributes as part of their reviews (age range and what the customer uses the product for). This gives them an insight into potential customer segments that they can use to market specific messages and products to later down the line.
First party data is information about your customers’ behavior. This can be gleaned from analytics, stats, click throughs, and actions taken, and allows you to dig deep into the journeys your customers take on your site as well as the products they’re interested in and their buying habits.
Examples of first party data include: (but are not limited to):
This kind of 1st party data can be used to map out customer journeys and predict shoppers’ next steps. It can help you send well-timed replenishment emails, relevant product recommendations, and abandoned cart ads to build trust and drive conversions. The goal here is to improve your customer experience and customer engagement through data that is on the pulse of their actions. This informs strategic actions that can help build your direct relationship with your customers.
Sephora recommends products that customers might also like based on their previous shopping history, which is a great example of their first-party data strategy.
You’ll notice a pattern here - the different parties of data get more and more removed from the customer the higher you go. Zero party data is collected directly from the customer, first party data is collected through your own channels, and second party data is collected from another source (but a source that collected that data themselves).
For example, an influencer might get customer information from a retailer they’re working with, so they can target their future marketing efforts toward specific shopper interests.
This data is often easier to get your hands on since it has already been collected. However, it’s important that the customer data matches the needs of your own audience.
Third party data is the most removed form of data collection, but still just as valuable. It’s essentially data collected from other sources that you can use to build prospecting campaigns on Facebook, LinkedIn and other ad platforms.
It can provide good insights into key demographic information about your customers, but it rarely follows them all the way to checkout. It doesn’t provide information about how shoppers interact with your brand and your products, or even what steps they take when they land on your website. If you're trying to build new audiences for targeted campaigns, using 3rd-party data is a good starting point as it gives you overarching commonality between your customers.
Vegan Outfitters uses 3rd party data to serve ads to people based on specific demographic information:
The new privacy changes mean brands have less access to customer data since customers now have control over what information they do and don’t share with retailers. This has led merchants to source data from other places, including customers themselves, analytics tools, and third party sources. While zero party data and first party data provide a greater insight into customer needs and behaviors, combining all four types of data collection provides a rounded view of your customers, their likes and dislikes, how they found you, and their buying habits.
Use Peel unlock more information about how your customers found you and group survey answers together with other key ecommerce metrics to create laser-focused customer segments.