The Edit Blog

Less is More: Increasing Engagement Rates with First-Party Customer Data

ARTICLE BY Joshua Hull
READ TIME: 5 mins
9th March 2022

Our work is not about collecting customer data in volume it’s about collecting “good” customer data based on trust, transparency, and value.

The Wall Street Journal recently ran a story with the bold headline:

Big Tech Privacy Moves Spur Companies to Amass Customer Data

Marketers are staging sweepstakes, quizzes, and events to gather people’s personal information and build detailed profiles.

For in the new world of first-party data, it’s the word “Amass” here which indicates the missing of the point entirely. The opportunity within evolved Customer Data Capture, isn’t how much of your customer data can be collected, but that you get the absolute best, and you get it first-hand, directly (first-party) then retain and grow from that opportunity.

First-party data has always been most sought after by marketers because the opportunity to execute value add marketing actions, such as customer segmentation, churn and propensity modelling are much higher and more accurate than that of third-party data.

It is also a key requirement for more advanced CRM Operational application such as Next Best Action and Campaign Journey Orchestration (CJO) – which enable brands to communicate in a way that considers the fact that not all offers, activities, services, and conversations are relevant to all at all times.

The most advanced marketers link all relevant data sources, online and offline, to define their target audiences and build a more complete picture of customers – here at Edit we call this Multi-Channel Personalisation (MCP).

The house of MCP is built upon one foundational brick – data!

As 2022 progresses, the window of opportunity is closing fast for collecting data using a third-party strategy (information collected by an entity that does not have a direct relationship with the user the data is being collected on) and then being able to actively use it.

If you want to “amass” volumes of CRM data in your business as the WSJ article suggests then you will still be legally able to collect third-party data to supplement your first. However, as Google and Apple’s “opt in” and cookie consent rules etc. are tightening, with many more to follow, your opportunity to market in a highly personalised manner to “unknown” prospects will be greatly reduced.

So, if not volume, it’s quality over quantity then?

Yes, yes, it is.

In this article, I am not going to discuss and share the percentages and statistics of conversion rates of first-party data versus the volume of third-party, because instead I want to talk about the best-in-class practice principles for all markets of the opportunity that an optimal first-party data CRM strategy can give you.

In the route that first-party data gives you towards MCP – the P, Personalisation is the headline. The ONE takeaway opportunity in this article I would want to offer you is that the quality of your first-party data collection will allow you to create a strategy that will set you up to prove three core hypotheses.

Graphic showing the three steps to increase engagement - personalise messaging, create relevant content , optimise communication frequency

In the modern digital marketing landscape if you are not proving these 3 hypotheses to be correct and worse still not able to report on them then you won’t be able to achieve MCP.

The most probable reason why you aren’t proving one, two, or all three of those hypotheses as correct is because your CRM data is large but weak or in first-party versus third-party data language; high-quantity versus low-quality. You either have too many “bad” customers or a good proportion of the “right” customers collected in a way that you can’t tell that they are good.

Within the last year at Edit we have engaged with two online retail organisations.
Both with the same business challenge and the same aspirational KPI’s, but both with very different intended solutions.

Retailer 1 wanted to be more Customer Centric, get more sales (obviously), they wanted to reduce churn and ultimately to maximise the value of their existing customer base.

Retailer 2 wanted to be more Customer Centric, get more sales (obviously), they wanted to reduce churn and ultimately to maximise the value of their existing customer base.

The differences came in the solution expectation that each retailer prescribed/proposed that they wanted Edit to undertake.
Retailer 1 wanted to continue their existing strategy of high volume, high cadence CRM communications. As part of this, they also wanted to acquire a high volume of first-party data, quickly. This ultimately meant daily emails to existing customers with a generic template with an urgent “Buy Now” call to action (CTA).

The mass acquisition strategy was focused on a heavily discounted welcome offer with little or no programmatic or personalised targeting – they then had the strategic CRM approach to move any acquired customers from “Welcome” to “BAU” immediately, thus then becoming part of the of high volume, high cadence CRM communications.

Retailer 2 also had a current high volume, high cadence CRM comms approach. However, they had a clear vision of defining what a loyal customer looked like, defining who their loyal customers are then gathering a deep and meaningful understanding of them – then using this insight to become actionable in creating a multi-channel approach to both personalisation and value exchange.

Edit mutually agreed to not work with Retailer 1 and instead focused on a Transformational CRM Strategic partnership with Retailer 2.

The “deep” level reasoning for this was that Retailer 2 understood our response to the Business Challenge, ultimately, that being truly Customer Centric requires consideration across 3 principles:

  1. Segmentation & Data
    Gathering and using learnt, asked, and given first-party data to personalise a customer’s experience in the most meaningful and timely way. Also, optimisation through continuous email campaign measurement and testing.
  2. Technology
    Connecting all technology and systems to enable us to personalise the customers experience wherever they are in their journey, across all relevant devices, in sequence.
  3. Content Brand & Story Telling
    Use all the content/messages and brand experiences that enable personalised experiences and provide experiences they would recommend to others. Developing a consistent story throughout all channels.

Retailer 1 only had a requirement of us to create, enable and facilitate a technical approach to the high volume, high cadence CRM approach – not an evolutionary process as we see above with Retailer 2.

From a “wider” level of reasoning, Retailer 2 understood our data-led solution to Transformational CRM with first-party data level roots.

Combining the use of first-party data and insights to map the customer journey. By then combining our deeper understanding of customer motivations, behaviours, and advocacy we will then enable communication to customers with the right message, at the right time, across all points along their journey.

Now, 6 months down the line we have created a Transformational CRM roadmap across both existing and new acquisitions of first-party data audiences.

We have set them up organisationally to both create that all-important, actionable insight and data-led approach to prove our 3 core hypotheses mentioned above.

If you are looking to reflect and re-organise your approach to customer communications to deliver a more personalised experience, that keeps your valued customers returning then get in touch today.

Contact us here.