Welcome to the Data Party: Understanding Customer Data Types and the Shift to First-Party Data

Welcome to the Data Party: Understanding Customer Data Types and the Shift to First-Party Data

In a previous post, we identified first-party and third-party data collected via your website, email marketing campaign, or social app using powerful tools such as Twilio Segment. In this post, we will discuss different sources and types of customer data, problems associated with data collection, and how your business can benefit from a strategy to manage that data.

Why is This Important, and Who Benefits?

Customer data is key to business growth. The more a business understands its customers, the more insight is gained when anticipating needs for your business’ products and services. Conversely, the mechanisms of customer data collection—cookies, user tracking, and the selling of customer data—are a growing concern, and companies must comply with current and new consumer privacy regulations.

This article can benefit marketing directors, data analysts, and decision-makers regarding solutions for prioritizing the collection of first-party customer data.

The Different Kinds of Customer Data Collection

We identify the origins of customer information based on a specific party: first party, third party, etc.

First-party data is information collected from your website, through email, social media, or apps used by your customers or followers. First-party (also known as 1st party) customer data can come from email campaigns built on MailChimp, links that bring customers to your website from Google Search, customer feedback or surveys on your website, subscriptions, purchase history, online chats, or CRM systems like HotSpot and Salesforce.

Second-party information is customer data that comes from a trusted partner in a mutually beneficial relationship. For example, if your business were to contract with an advertising or marketing firm, they could help build customer data collection points (targeted ads, surveys, email campaigns, etc.) that funnel that data to your business. Second-party data can help spot customer needs or develop data points that might be missing from your own data collection processes.

Third-party information can be derived by publicly accessible demographic information (for example, via Google Search or other search engines) or by user tracking on major social platforms such as Meta Facebook, Twitter, or TikTok. Third-party (also known as 3rd party) customer data can also be purchased by organizations. Third-party data, and customer requests to opt out of the collection of such data, have become a major issue in privacy discussions.

Zero-party data is information a customer directly shares with a business with the understanding their data may be used to make purchase decisions, focus on personal interests, or how the customer wants to interact with your business. For example, a customer interested in a vacation may reach out to a travel-based company to make decisions based on a desired timeframe and destination. Or a customer contacts a financial advisor for retirement and investment planning. A person who builds a playlist of music in an app may be given suggestions and recommendations based on their musical interests. In these instances, the customer willingly hands over their information.

The Shift to First-Party Data

Concerns about privacy, as well as the collection and sale of customer data, have led to consumer protection laws. You may be familiar with agreement notifications that appear on websites that indicate the site is using cookies to collect customer data. Apple has recently instituted privacy and data collection settings in iOS, which asks users to agree to track when using certain apps.

Efforts are underway to emphasize using first-party data over other forms of data collection. New regulatory laws, including the General Data Protection Regulation (GDPR) and Virginia’s Consumer Data Protect Act (CPRA), empower consumers with protections for their data. Websites, apps, email marketing, and operating systems (Windows, MacOS, iOS and Google/Android) must comply with these regulations. This includes restrictions on the collection of third-party data using tracking pixels, cookies, and data harvesting without a customer’s permission. On more and more occasions lately, companies are being fined for selling third-party data without customers’ knowledge or permission.

Solutions for Collecting First-Party Data

To help your marketing and customer data analysis plans, consider a strategy that focuses on using first-party data. This includes:

  • Applying Google Analytics and Google Search Console to optimize your company’s websites, registration forms, landing pages, as well as search results.
  • Using Google Ads’ first-party cookies through a Global site tag and Google Tag Manager.
  • Considering first-party customer data from product usage, including mobile apps, customer service interactions, help centers, reservation systems, or other sources.
  • Selecting a CRM that prioritizes first-party data.
  • And most importantly—always staying up to date on the latest consumer regulations.

Let Terazo Help Implement a Customer-First Data Strategy Using Twilio

With Terazo + Twilio, we can help your business develop a first-party data strategy through Twilio’s Customer Data Platform (CDP). Twilio offers a suite of engagement and communication tools, from customer service to real-time data analysis through a singular view of the customer. Through Segment, your business can gain a 360-degree view of your customers: from initial contact to delivery to messaging to return engagements. With Twilio, your business can find ways to improve product/service offerings, streamline customer inquiries, and gain a better understanding of your customers through personalization.

With Twilio Segment, corral customer information from multiple sources and pipeline that real-time data into repositories such as business analysis applications and marketing campaigns without making endless copies. Better understand your customer, responsibly, through effective and powerful tools. Segment enforces data privacy and provides better data protection.

Reach Out and Discover More

Want to understand how to prioritize first-party data strategies in your marketing and sales platforms? Contact us at twilio@terazo.com.

Team Terazo

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