How To Use First-Party Data 101

First-party data, you’ve collected it, now what do you do with it? Today we’re jumping into how to use first-party data to boost the effectiveness of your marketing if you’re a small business.

Ok, here’s the deal the majority of people and businesses who talk about first-party data talk about creating a 360° view of the customer. This is the ultimate goal of 1st-party data. But we’re not going to talk about it because less than 1% of businesses have the resources (time, money, tech, and people) to make it happen.

We’re going to talk about the rest of us. And how first-party data can give small businesses their competitive advantage back. The advantage they have historically had over corporations. Small businesses excel at personalized experiences and truly knowing all their customers.

How do you move the experience you provide in person to an online environment? By using first-party data in your marketing. Below are actionable tips you can put into action in the next week to make your marketing more effective with first-party data.

The Easiest Thing Most Small Businesses Don’t Do

First-party data allows you to understand who your online customers are. The number one use of first-party data is audience definition. Audience segmentation/definition can be as simple as separating those who have purchased from you and those who have not, and yet less than 70% of large businesses are doing it. Our guess is the amount of small businesses doing this is significantly less.

Other simple audience segments could be those interested in men’s clothing vs women’s clothing vs children’s clothing. Or those who have recently made a purchase and those who haven’t purchased in the last 6 months. Targeting the right audience with the right messaging increases the effectiveness of your marketing. Meaning fewer touchpoints and less money to convert a visitor to a buyer or a one time buyer into a regular.

Once defined, you can tailor your communications (both email and SMS) to each audience. Generic marketing blasts are becoming less and less effective, and can be upsetting. This can be done by digging into your CRM and purchase data (both are forms of first-party data).

As an example, you might have a product which people typically buy every 3 months. If you are using data, instead of sending out a sales blast to everyone on your list, you can exclude those who just made a purchase, or those who always order on schedule whether the product is on sale or not. You don’t need to give out discounts to those who would pay full price or those who may be offended by you asking them to purchase again within days of them making a purchase. Using data allows you to only send discount emails to those who haven’t ordered in a while.

Build New Audiences

You may be already doing this, but we have found the majority of small businesses are not. If you have a list of email addresses, you can build a lookalike audience. Build audiences based on your best customers in each category, your frequent website visitors, those who order frequently, or those who have a high average order value. New technologies provide you with the email addresses of those who look around your website and then bounce. Allowing you to drastically increase the size of your list. 

Retarget Without Paid Advertising

First-party data allows you to know your audience. Advertisers have made it easy to simply pay them to reach people who visit your website, again. While this is convenient, it is becoming less and less effective as competition increases. The pandemic has pushed everyone online, and there are more businesses than ever competing for your customer’s attention. First-party data allows you to retarget those people through more cost-effective channels, such as email marketing and SMS messaging. Email gives you direct access to a phone app people open multiple times a day and significant advantage

If You Do Nothing Else, Do This

Personalization is where we tap into the feeling you get when you walk into your favorite local spot and everyone greets you by name. It feels good to be known. The sound of your own name actually releases dopamine and serotonin, which makes people happy and builds feelings of trust.  We say all this to say, don’t underestimate the power of low levels of personalization. Simply including someone’s name in communication, whether it be email or SMS, has power. Deeper levels of personalization involve knowing the customer well enough to save them time and make personal recommendations. 

In real life, this looks like always addressing people by name in communications, sending emails with products they would be interested in as well as not sending emails they wouldn’t be interested in, and reminding them to reorder when they are mostly likely to be running low, or thanking a new visitor for checking out your store. People appreciate you knowing them and saving them time.  It’s not creepy, it’s a stellar customer experience, which translates into repeat business. 

These are starting points for using first-party data to make your marketing more effective. These small changes will make a big impact in the effectiveness of your marketing. If you’re already doing these things, keep an eye for the next segment on deeper levels of personalization.