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Marketers miss the target when first-party data fails to improve customer experience

Raju Vegesna Profile picture for user Raju Vegesna May 10, 2022
Zoho's Raju Vegesna shares some ways businesses can use first-party data to build lifetime company advocacy while adding value to the customer experience.

Many arrows missed hitting target mark. Shot miss. Multiple failed inaccurate attempts to hit archery target © Iconic Bestiary - Shutterstock
(© Iconic Bestiary - Shutterstock)

Surveillance marketing has gone public. Last month, Connecticut's General Assembly approved a new privacy bill, giving consumers the right to opt out of the collection, retention, and sale of their personal data by third-party companies using third-party cookies. If signed into law, the bill would make Connecticut the fifth (and likely not last) US state to have its own data privacy regulation on the books. These laws, combined with GDPR and last year's Apple iOS 14.5 update, could signal the death knell for third-party tracking. So with an eye on looming privacy changes, forward-looking marketers have shifted focus to first-party data.

First-party data is information gathered from customers who are directly interacting with a brand — anything from where a customer lives, what industry they work in, how they reached out, what they purchased and through which channel, what digital properties they visited, and any other data they may have shared with a sales or marketing or service team member during their engagement. In most cases, collecting first-party data still requires cookies, but there is considerably less public concern about the practice and its use in marketing and sales.

Most customers are comfortable giving up some personal data so long as they receive improved experience in return. Now, however, marketers primarily pass along first-party data to sales, who then use the information to up-sell or cross-sell customers across touchpoints, with little attention being paid to personalization or customer preference. There is nothing inherently wrong with this use-case done right — provided the right vision, tools, and execution, first-party data has the potential to drive business growth by enriching customer experience long-term.

Here are some ways businesses can add value to customers using first-party data, converting single-point sales into lifetime company advocacy.

Serve customers what they want, based on what you know

At a basic level, consumers find convenience when they are being marketed products or opportunities that are relevant to their interests or needs, at a time and in a way that they prefer, and the whole journey from prospect to customer to loyalist is seamless.

It doesn't always work out that way for customers. In fact, while researching marketing statistics for this article, I've been contacted across multiple channels by several marketing companies offering their products and services, none of which I inquired about or need. These enterprising marketers likely obtained my information using third-party cookies, but the same depersonalized, unfocused campaigns are leveled at customers from their first-party data, too.

Data has allowed businesses to know so much about their customers, but sales and marketing often focus on one piece as it relates to revenue — how to get in touch. Future success for businesses and marketers, especially in an increasingly cookie-concerned digital world, requires employing new techniques that elongate the lifetime value of customers through improved customer experience.

Longer-tailed marketing initiatives, like thought-leadership, content marketing, events, and speaking engagements are harder to measure and properly attribute. In all cases, however, first-party data can be leveraged to align the right customer with the relevant initiative, which mutually benefits businesses and their customers. These activities, and not targeted ads or depersonalized sales, are precisely the types that elicit positive customer responses because they help determine a brand's identity and values. Businesses that want to extend their lifetime customer value should push their marketing efforts toward campaigns that may seem more difficult to attribute but can more deeply connect with customers and sustain their attention longer.

Tie it all together with the right tools

The MarTech space is overcrowded with single-use applications engineered to address individual marketing activities like social media management or email campaigns or SEO. Without a unified, omni-channel marketing solution or platform, marketers must integrate these disparate applications themselves, then blend, analyze, and manage data derived from each. But, siloed data and applications take a huge toll on marketing productivity and effectiveness.

Nevertheless, this is the industry status-quo, with marketers, on average, using a dozen or more different tools to meet their goals. On the marketing side, this creates a lot of waste — redundant processes, unused apps and licenses, multiple sign-ins, and unusable data leading to imprecise analysis and insights. For customers, a fragmented omni-channel marketing strategy and deployment produces bad, incongruous experiences and a negative overall impression of the vendor.

A unified marketing platform brings together multiple tools and corresponding data that enable all stakeholders to see and manage activities within a single window. In order to legitimately achieve seamless customer experience, these platforms need to integrate well with other systems, say CRM, so that marketing and sales become aligned to coordinate the appropriate next step for new and existing customers.

Customers engage with multiple customer-facing teams and systems over time, not just marketing or sales. When these departments share a view and first-party dataset, they're better equipped to personalize journeys, but that has to be the goal. A customer will be more inclined to continue doing business with a company if marketing refocuses its outreach toward a topic or product or product category or channel that the customer has already expressed interest in with a sales or service representative.

The same is true in reverse: When marketing discovers a preferred touchpoint for engagement with a customer, that first-party information should automatically be shared with sales teams so that they can sell to the interested party using the channel of their choice. Most marketing teams understand this, but they find it difficult to be effective using a large array of disjointed tools.

Marketing beyond data

The marketing industry's move away from third-party and toward first-party information is a positive one, but it's still reactionary and data-dependent. Who's to say that, in five or 10 years, customers won't become as savvy and concerned about the collection of their first-party data as they have with third-party? Vendor reputation is a factor of customer experience, so if this quid pro quo of data for convenience is challenged, how a company collects, stores, secures, and uses that data moving forward can be the difference between attracting new business and losing existing customers.

Just as businesses have moved away from surveillance targeting, marketers can expand efforts that don't subsist entirely on customer data. Taking the first-party data that's already been and continues to be collected, and analyzing it to produce high-value traditional marketing campaigns that are both cookie-less and resilient to change, businesses may insulate themselves from new data laws and restrictions down the road.

At Zoho, for example, we've ramped up offline advertising including billboards, which we've put up in areas where the company feels it can add the most value to local communities and customers. We base this knowledge primarily through ongoing dialog and engagement with customers and community members.

In the end, marketing's value to customers will always be information, but customers' value to businesses is incalculable. Whether through the responsible use of first-party data, or through traditional marketing strategies, prioritizing customer experience is how businesses grow.

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