Data Foundation for wider Marketing Outreach
You need a strong data foundation to support your Marketing outreach. Predictive Customer Segmentation is one of the most effective tools available, to precisely target prospective customers. Predictive Customer Segmentation needs rich data. To achieve that goal, multiple options exist, to augment the data that is already available. Your data foundation is about choosing the right data strategy.
Let us first understand the different types of data that a business has.
- First Party: This data is generated and owned by your company. Customers’ purchase history, Product data, Sales orders, Purchase orders, Shipment transactions, etc., are all examples of First-Party Data.
- Second Party: This is the data that you obtain through partnerships with other businesses, generally on a reciprocal basis. Customers of the Second Party provide permission to receive your marketing campaigns. This is also known as Permission-based Marketing.
- Third-party data: This is the data that is sourced from external entities. Macro-economic data, industry data are examples of this. You can also buy prospect lists from Data Management companies such as Experian, MelissaData, etc. This is also used for Data Enrichment.
First-Party Data: Make sure you leverage what you already own:
First-Party Data is the data that you collect and own. Customer data such as names, addresses, purchase history, browsing behavior, customer support interactions are all examples of first-party data. Website visitor actions such as views, downloads, clicks, shopping cart actions on your website are also First-Party Data. As you can see, there is a wealth of information that you already own. Many businesses don’t even fully realize the potential of the data that they already own.
First-Party Data allows you to understand customer behavior, discover Customer Personas and micro-segments out of your customer base. Discovering Customer Personas and the right segmentation is the cornerstone of Marketing Campaigns.
With the right kind of predictive analytics, you can target returning Customers by leveraging information that you already have about their past purchases and product interests. Most popular E-commerce businesses like Amazon and Netflix provide recommendations based on Customers’ past behavior. That is Big Data in action.
Beyond First-Party Data:
First-party data is always the most useful and valuable source of truth, but in many cases, you want to reach an audience that you don’t have first-hand information about. This is where second party information would be helpful.
Second Party Data: Get strategic about the Data Acquisition and expand your Customer base:
Second Party data allows you to expand your Customer base. This is the data that you obtain through partnerships with other businesses, generally on a reciprocal basis. For instance, a hotel chain may tie up with a Credit Card company for joint marketing campaigns. It is possible that companies often share the same Customer base, but different attributes. Each gives other entity, a portion of the data that they have, within the permissions provided by the end Customers involved.
When data from your company and your partners is combined, it could connect the dots and provide new insights to create more effective Marketing Campaigns. It is to be noted that, this ability to share the data is restricted by permissions that Customers provide to receive offers from partner companies. By pursuing joint marketing efforts with your complementary second-party data partner companies, that are likely to appeal to the same type of Customers, greater success is possible for your business and your partner’s.
Third-Party Data: Buy off the shelf to grow your Customer base.
Third-Party data allows you to grow your customer base. Ad Tech companies such as AdRoll, Peer39, etc., provide advertising platforms that allow you to choose a new set of target audiences based on broad characteristics. Other companies such as Melissa data, allow you to enrich data in two ways.
- Case 1: Append Customer attributes to already known Email Addresses or
- Case 2: Provide you with new email lists of potential Prospects.
In most cases, you get names, addresses, and demographic information. Since these are not your Customers yet, you would not know anything about their individual preferences. So, the advertising and outreach efforts cannot be personalized. This is the reason why the likelihood of converting Prospects from Third Party data is typically low.
In all cases, Third Party data-based campaigns will be less effective than that of First Parties and Second Parties. Third-party data is most useful to extend your reach and build a pipeline. You still need to have a strategy in place, to identify, nurture and convert the Prospects into Customers.
Key takeaway: Ideal Strategy
All 3 types of data have their place in your overall Data Foundation Strategy. The effectiveness of data decreases dramatically from First-Party Data to Second Party Data to Third Party Data. So how do you go about making most of your investment?
- Drive initiatives to take full advantage of first-party data that you own. Even though this is the data you own, it doesn’t mean it is easy to harness. Having quality data and creating a master list of Customers and Products is often challenging, but it is a much-needed aspect of your Big Data journey.
- Partner selectively with other businesses to expand the neighborhood of your customer acquisition. You need to be careful about brand associations and the message that it conveys to your prospective customers.
- Use third-party data for the widest reach. You need to identify the demographics, geographic and behavioral targets to fine-tune the campaigns.
Summary: Right Data acquisition strategy is a prerequisite for effective marketing campaigns. Ensure that you fully leverage the first-party data that you already own. Establish partnerships with other companies to share the data and design joint Go-to-Market strategies. Finally, expand your reach by buying data from 3rd party resources.
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