Executing a first party data strategy and creating a digitally engaged customer base takes time and effort but the rewards are worth it: more loyal customers, increased customer lifetime value and a fantastic basis for digital transformation…
In my last post I talked about the fact that 80% of customers and prospects are online everyday but companies only reach a small fraction of them in a personalised way and neither the current ad tech strategy nor walled gardens will solve this challenge for brands. Instead a first party data strategy is the way to go for most brands. Marc Pritchard, P&G’s Chief Brand Officer, formulated his version of the strategy by stating at DMEXCO that “the future of digital is “mass one-to-one marketing”, and that P&G is now working with partners… to utilise unique consumer ID data and target consumers precisely when they’re ready to buy with personalised advertising1“.
For a first party data strategy typically three areas of marketing have to align their approaches and goals, with a need to balance their short term campaign-related goals with longer term customer engagement targets:
- Brand Marketing: Specific goals like increasing brand awareness and brand consideration need to be complemented by targets to build a digital user base and stimulate customer engagement.
- Performance Marketing: Should not just focus on cost-effective conversions in digital channels but also have stated incentives to increase user engagement through their campaigns.
- Customer Base Management: In addition to cross-sell, upsell, retention and winback targets, getting customer permissions and being relevant in all stages of the customer experience lifecycle need to be part of their agenda.
Permissions and Content Marketing can provide cross-functional and cross-channel guidance and support to enable a “joined up” first party data strategy. It cannot be reiterated too often that the whole thought process needs to start with understanding what the customer problem is you are helping to solve rather than how to increase permissions and identifications. If there is no clear answer to this question, a first party data strategy will not work. Staying relevant and helpful to your users is what counts and permissions, interactions and rich first party data will be the result.
Once the strategy is set, the value proposition clear, and the appropriate organisation and shared goals in place, you can concentrate on execution and bringing the strategy alive. From my experience there are six main levers to achieve this and increase digital identification:
- Increase Permissions: Incentivize users to opt-in or increase the level of permissions whenever the value can be clearly demonstrated to them. It is essential to use interactions to ask for permissions in all relevant channels be it online, digital push, in store or customer service.
- User Self Identification: Most users are willing to give you information about their identity and intent if they see a clear benefit resulting from sharing the data. Systematically use this opportunity, but never ask for information when you are not clear how you will use it for the user´s benefit.
- Extend Digital Reach: Reach users where they spend their time digitally. This can be on social media, earned or paid media in addition to your own media assets. Always think about how you can capture those interactions as part of your relationship building.
- Add Channels: Use communications in all your channels to drive digital identification. Examples are email or SMS to web or web to app. Obviously the switching of channels needs to be seamless and offer a richer customer experience.
- Improve Identification Methods: Systematically use and combine identification methods like 1st party cookies, device-id, login or network identification in a privacy compliant way to build the cross device and cross media/touchpoint identity graph.
- Identification Partnerships: Partner with other brands, publishers or platforms to achieve additional customer benefit and increase identification in a privacy compliant way
In my experience all these activities should be based on a model that describes the different identification and permission stages2 and guides the interactions with the user. From an identification perspective, we can distinguish, for example, between unknown, anonymous, identified and verified users.
From a permission perspective, a classification could be transactional, repeated transactional, part of your community and community advocates/contributors. In the end, company-specific clusters have to be defined based on advanced analytics and need to be regularly reviewed on the basis of the actual dataset.
Executing a first party data strategy and creating a digitally-engaged customer base takes time and effort, but the rewards are high as well: more loyal customers and advocates, increased customer lifetime value and a fantastic basis to extend your business model to create platforms and marketplaces as part of your digital transformation journey.
1 Tim Mayton, P&G’S Marc Pritchard asks digital media to wake up and shake up, 14.9.2017
2 Seth Godin, for example describes five levels of permission in Permission Marketing,1999