Spiceworks, a professional network for the information technology industry, has showcased insights from Arun Kumar, Hero Digital’s EVP, Data & Insights, in their recent article: How to Optimize First-party Data for Personalized Experiences.
Arun’s article reveals that by focusing on first-party data, marketers are able to cultivate the personalized experiences that customers expect. Read the full article below.
”
Tightening data privacy regulations and Google’s plan to eliminate the use of third-party cookies from its browsers are making many traditional marketing strategies obsolete. In this stricter world of online privacy, it’s still possible for marketers to break through the noise and reach their customers — but they’ll need a solid strategy based on first-party data.
Despite increasingly consumer-focused data privacy regulations and growing concerns, people continue to expect personalized messages and shopping experiences from brands. In fact, two-thirds of consumers expect companies to understand their expectations and needs. Personalization should remain a top priority in today’s crowded commerce space, but marketers need a new playbook to make it to fruition.
Out With the Old and in With the New
Mozilla’s Firefox and Apple’s Safari have already said goodbye to third-party cookie tracking. With Google following suit, marketers will no longer be able to track a user’s online behavior across the web. Consumer data collection is also becoming increasingly regulated by government entities, with rulings like the European Union’s General Data Protection Regulation, which restricts how data can be processed and used.
Yet, consumers still want tailored content and experiences. So where, does this leave marketers?
With third-party tracking, marketers could collect information about each user — their age, online habits, location, and more — to provide a personalized CX. Now they must rely on first-party consumer data. But when marketers hear “consumer data,” alarm bells ring in their heads, and they become preoccupied with privacy laws. This panic often causes marketers to overlook what they do with that data — or, more importantly, the value they will provide to the customer in return for their data.
These often-overlooked considerations are important as you trade your old marketing playbook for a new one. As you continue operating in a privacy-first world where personalization reigns supreme, it’s time to ensure you have the right approach, mindset, and tools to succeed.
The Truth About a First-party Data Strategy
Don’t let apprehension about first-party data distract you from creating a strategy that works for you and your customers. If you remain compliant with privacy regulations, provide value and trust to your customers, and have the right tools and talent, you’ll be on the road to creating personalized CX.
Compliance is important, but it doesn’t have to get in the way
Compliance with data privacy regulations is critical — but it shouldn’t prevent you from using data to its fullest potential. Stay abreast with the latest news and iterations of regulations. You should also work with your in-house legal teams and lean on technology to manage the ever-changing requirements of privacy laws.
Consumers will give up data if you provide value and build trust.
Even though 90% of consumers have growing concerns about data privacy, shoppers are more willing to offer up their data than you may realize — but only if you provide value and transparency. Consider how much Amazon knows about a customer: their habits, address, location, payment information, etc. In return, Amazon provides relevant, personalized content and consistent next-day deliveries. You must first identify what value you will provide in return for customers’ data. But Amazon didn’t get to where they are overnight. In addition to delivering on their promises, they communicate how they use personal information, collect it, and keep it secure. You need to make it clear to your customers that their data is in good hands.
You don’t need a big data approach; you need a smart one.
We have been fed the same narrative for years: Collect as much data as possible to glean the best insights. The hype around “big data” may not be justifiable. Instead, you should create detailed hypotheses and focus on the quality of your data rather than its quantity — a smart data approach. Start small by identifying a specific CX problem and run a test on a certain group of consumers.
For example, imagine you are working with a large bank to compare the value of marketing based on customer lifetime value (CLV) and marketing based on cost per acquisition. The bank used most of its media spend to acquire customers at the lowest cost but soon realized it could be landing more valuable customers. While they may represent a bigger investment up front, it also ensures you are attracting customers that will stay long term. By running a test on a smaller group of customers, the bank can gain knowledge in a lower-stake scenario and then apply the learnings to its entire customer base. The benefits of this approach are twofold: 1. The bank doesn’t have to pull as many levers to test a hypothesis on a smaller group of customers and 2. if a test doesn’t go as planned, the ramifications are less severe.
Your tech stack alone won’t solve the problem at hand
Throwing money into technology investments will not help you achieve anticipated results. Instead, be strategic in your investments because, let’s face it, technology is still necessary for transforming your first-party data into actionable insights. As an Adobe Platinum Solution Partner, we use tools like Adobe Experience Manager (AEM) to create personalized experiences for our customers. But we didn’t just discover the product and immediately implement it — we first employed Adobe’s analytics solution, which led us to identify other areas where additional Adobe products could be an effective solution. It all goes back to this idea of a smart data approach: Start small and build on what you have.
In addition to a strategic tech stack, you need a diverse team of experts with relevant experience. For a 360° overview of each initiative, you should have talent representative of various departments, including data scientists, content experts, and marketing specialists.
The jobs of marketers and data professionals are evolving, and so are their strategies — but don’t fret. By providing value and transparency, you can build trustful relationships with customers. And with a smart data approach and a diverse team of experts, you can optimize customer data for personalized experiences that will keep them coming back.
”
