In today’s data-driven world, understanding customer behaviour and preferences is essential for companies aiming to thrive. However, on a recent trip to New York, I was blown away to see the US market actively working against this. We all know there are far too many companies out there farming data and selling it on, and we’ve all heard of the death of the cookie (but look where that is now at). First-party data is an essential element of great customer experience in a B2C relationship (or B2B) so these hilarious adverts from Mullvad really got me thinking. Where and how are companies getting it so wrong that there is now a demand for customers to have complete anonymity? Have we damaged customer trust so far that they want to give companies literally no data at all? (Probably a terrible time to remember the Facebook scandal.)
Let’s start simple. As mentioned above, the importance of first party data is essential for both the customer and the company to provide great experiences. Why would I, as a customer, want to trawl back through a website if a tool like Salesforce Marketing Cloud Personalisation can help me get back to where I left off last time? And we all love being passed around multiple people in a call centre with no one being able to find who we are and what our order is, right? Never mind where the order actually is.
So collecting and storing this first party data is essential, but it comes with a responsibility for companies.
The first, and hopefully most obvious, is Security - nothing builds trust like the knowledge that customer data is safe. Huge companies are constantly in the news for losing customer data, we are now in a world of hacks, data breaches and more (this is a scary read). So, if you are going to collect and store data, how you do it and where you keep it are more important than ever.
Besides security, Accuracy and Relevance are another hot topic. You’ve got to ensure you are keeping data up to date and don’t have multiple instances of the same data in multiple places (input Data Cloud here). However it’s also important to ensure that what you are capturing is relevant; to what you do as a company, or are offering for your customers (more on this value exchange later).
Last, but certainly not least, is Compliance with Regulations. As global regulations like GDPR and CCPA become more onerous regarding data privacy (we all know Australia will be there soon), companies that prioritise ethical first-party data collection won’t just avoid legal stings but will also prove to customers that their data is safe. This is why the tools companies use are becoming such an important choice - who has time to fully understand all of this legislation when you can be confident a system has most of it covered?
So really - the importance of first party data comes down to a few simple things as companies: what you have, where/how you store it and how you use it, which leads us nicely into:
The Value Exchange
As a company, the more data you ask for, the higher the expectation is on the customer experience. If you want to know personal information about me then use it appropriately when I engage with you. Nothing is more frustrating than being let down by a company you’ve been a customer of for years when you finally need something in return, even if that's just a quick response to an issue from their call centre.
Here are several key elements to help in this exchange:
Incentives when growing: Offering incentives, such as discounts or exclusive access, can motivate customers to provide their data willingly. This creates a win-win scenario where both parties benefit, and is a true value exchange.
Transparency: Clearly communicate why you’re collecting data and how it will benefit the customer. When customers understand the advantages—like personalised recommendations —they are more likely to share their information.
Quality Experiences: Enhance customer experiences by using first-party data to anticipate needs and deliver tailored content. When customers see their data being used to improve their experience, they are inclined to share more (and we spoke about relevance above).
Respect Privacy: Prioritise user privacy with strong data protection practices. Offering transparency and control over a customer's own data helps build trust, which will become even more powerful once Australia launches its own version of GDPR.
The Right Systems and Architecture to Make the Magic Happen (Ensure you have Bridged the Gap - Platform Strategy)
When it comes to driving exceptional customer experiences, just having the right software won't cut it, the whole architectural ecosystem it sits within also plays a critical part. It still blows me away that ‘59% of organisations lack a unified data strategy’. Once you have your customer data and understand the value exchange you are going to provide, a tool like Salesforce Data Cloud plays a vital role. It helps companies maximise the potential of their data and utilise it (even if it’s trapped) for world class customer experiences. Here’s how:
Unified Customer Profiles: Data Cloud enables companies to create and maintain comprehensive, single views of their customers. If you have scattered data across multiple systems that are fragmented and disconnected, I can guarantee your customer experiences are suffering because of it. By consolidating data from various systems and touchpoints, companies can understand, segment and personalise for their customers far more effectively - driving not just vastly improved experiences, but improved company results.
Near Real-Time Data Management: Respond to changing customer preferences or customer actions in near real time. With improved unification and faster data management the benefits are endless, here's a few simple ones:
But once this is all set up, it still comes to that larger architecture piece. How a company is then using this data across Sales, Marketing and Customer Service areas becomes the next key point. If they are just driving multiple silos into another silo of unusable data, the customer experience will suffer, meaning the customer trust will drop and we'll be back to using VPNs like Mullvads.
I see a quickly changing landscape when it comes to customer data and a company's ability to not just capture it but also use it positively. Right now, customer trust is in a tight juxtaposition. Customer experience and companies are struggling to keep up due to the systems and processes they have. The companies that find ways to break down the data silos, capture first party data in a true exchange of value with their customers and deliver exceptional experiences off the back of it will be the ones that truly come out on top.
carbonx Data & Marketing can help your company be at the forefront of these challenges and changes. Our mission is to help our customers provide exceptional experiences for their customers by implementing sustainable technology stacks. If you need help with the technology you have/are considering, or the technology/customer strategy once using that tech - please feel free to contact us here.
