Growing your first-party database: why, how and the mistakes to avoid

This month’s inaugural Martech Festival in Utrecht brought together the veterans and pioneers shaping the future of the industry. And with exclusively third-party data strategies all but consigned to the past, nothing says ‘future’ like first-party data.

I chaired a panel weighing up the importance of first-party assets, and it is not a spoiler to tell you that all voices were in complete agreement on the need for a customer-centric strategy across any given business, as we each seek to democratize the data we hold.

This can be easier said than done, of course. While marketing consultant and former VP of growth at Hudson’s Bay Company, Melle Staelenberg, pointed out that there is no better way to get to know your customer than to store customer profile information and behavioral data, he warned that the problem often lies in getting access to this valuable data.

“This is a really important era for anyone working in marketing. Third-party data will be more difficult to use, with customers not necessarily accepting being followed around or having their data shared,” he added, stressing the importance of platforms which help with liberating the data companies already hold.

In such a challenging context, John Sadeghipoor, director of marketing at Free People Europe, pointed out that the fashion brand’s focus is to “lean in” to its own channels, with the aim of generating “deep understanding” and “incredible shopping experiences” through data.

Meanwhile, Laura Paterson, senior marketing manager at Skyscanner, stressed the importance of a combination of high-quality first- and third-party data - pointing in particular to her brand’s success with meaningful partnerships - its investment in marketing automation platform impact.com having helped on that score.

The need for a range of incentives

The reality is that, faced with the prospect of losing access to third-party cookie data, a range of incentives will be needed to ensure that customers willingly share information about themselves. Paterson pointed out that transparency and informed conversations are key, while Sadeghipoor added that focusing on partners that complement brand values is critical. Quality content is also vital, he added, while promotions and competitions can help to grow a customer base.

Ask for less, get more?

But with businesses under pressure in a challenging economic context, the panel stressed the value of seeking to obtain the right data at the right time - as opposed to “over-asking”. Today’s explosion in loyalty programs represents one comparatively straightforward means of strengthening the first-party relationship and taking back control.

“Loyalty means different things to different people,” pointed out Staelenberg. “If you identify the most loyal [customers] and reach out with perks and promotions, then that’s a good loyalty program, right there.”

Never forget the omnichannel experience

The panelists also stressed the importance of the online and in store experience; stressing repeatedly how essential it is that valuable customer information is stored in a database that is easily accessible to marketers.

And given that many retailers have hundreds of thousands of SKUs on their sites, smart use of data also represents a good way to narrow down your offer to something more relevant to the individual.

And while the panel agreed that showcasing the most relevant products is not always easy - and requires the right data foundations - it is critical to avoid silos. “Everyone must see this as a priority for the business,” said Staelenberg. “The technology is there. Do lots of testing and tag products in the right way. It takes effort but it can be done.”

Alongside new technologies such as artificial intelligence (AI) and machine learning, quality, editorial content plays a big role here, including tips and personal recommendations. While suggestions can drive value, Sadeghipoor added that e-commerce has ‘a long way to go to replicate that human-to-human interaction and support you can feel in store’.

To this end, he added that extracting qualitative insights as well as quantitative data - in order to find out ‘what customers love and what they loathe’ - is key.

If first-party data is stored effectively, we agreed, it can be used as a lever to improve the experience. “Across every channel you can think of, your marketers can understand your customers better,” said Staelenberg, “which then helps with the creative side of marketing, and trying to acquire more of those types of customers. It’s a feedback loop and something that keeps on giving once you build out your first-party data.”

Building a case for investment is important too, of course - and Staelenberg’s advice was to make friends in other departments; for instance technology or product teams. “Find someone who can get you access to the data that you know your business is already storing and find a way, a hack, to get it into your CRM,” he said. “Then show the business how powerful it is to have access to that customer data before you even start a business case for a CDP (customer data platform).”

As we wrapped up the session, Paterson stressed the need to motivate talent to use this centralized stockpile of knowledge, with Sadeghipoor concluding: “Data is more valuable than gold: It’s that currency we trade with our customers to get to know them deeply - and ultimately to drive sales.”

Also published in: The Drum