A complete guide to customer data

Customer data is vital for marketers looking to establish meaningful connections with their audiences. In this article, we’ll break down what types of data there are, how to collect it, and how you can use it to drive results in your marketing.

Customer data can be collected and stored across multiple platforms. Different types of data come from different sources. That’s why you need a platform that can connect your data and deliver a single, unified view of your customer.  

With a unified view, you can begin to deliver personalized lifecycle marketing that connects with customers in the moment and drives conversions and results.  

Why is it important to collect the right customer data? 

Customer data empowers marketers to deliver targeted and relevant data-driven marketing. It’s an undeniable source of power for marketers. But, as consumers become increasingly aware of how and why brands are collecting data on them, it’s falling on the marketer to work harder to earn customer trust.  

As changes to privacy laws, cookies, and privacy settings sweep across the digital world, brands need to better understand the different types of data and how to use them. In this new world of consumer consciousness, it’s not right for businesses to collect and hold customer data without putting it to good use.  

Responsible marketing – making sure your marketing has a positive impact on consumers and their community – places a special emphasis on how brands handle customer data. If brands lose customer trust because they’re not using their data appropriately, winning them back will be an uphill battle. 

As a result, you need to know what types of customer data are out there, how to collect it, and how to use it to improve the customer experience.   

Collecting customer data responsibly

What is zero-party data? 

Forrester defines zero-party data as “data that a customer intentionally and proactively shares with a brand”.  That is, information customers have explicitly shared with you via data capture forms or preference centers.  

How to use zero-party data 

With updates to iOS software and updates to privacy laws, zero-party data is more important than ever. Customers want their marketing to be unique and personalized. Zero-party data enables them to be proactive about these experiences. They’re in power. How much information they share with you determines the level of personalization they want to receive.  

Collecting preferences allows you to ensure you’re reaching customers on the right channel, with the right products and messaging. 

  • Multi-channel marketing  
  • In-copy personalization e.g., first name 
  • Dynamic content  

What is first-party data? 

First-party data is information you have collected directly for customers and can include behaviors and actions across your website, data in your CRM, or social data. As with zero-party data, this information comes straight from the user. It can be generated from interactions.  

How to use first-party data 

As you collect first-party data directly from your audience, it’s accurate and relevant to the users’ experience. You can use this type of data to personalize experiences through product recommendations and abandoned cart emails. It empowers you to send timely and relevant messaging that’s going to drive customers towards conversion.  

  • Trigger marketing automation campaigns: abandoned cart or browse emails 
  • Product recommendations 
  • Retargeting ads 

What is second-party data? 

Second-party data is secondhand information that you didn’t collect yourself. Typically, you would expect to receive this kind of customer data from a trusted source – a partner or seller you have agreed to exchange data with.  

How to use second-part data 

Second-party data is essentially first-party data that has been shared with you. As a result, you can similarly use this data. When you obtain this information through a data-sharing agreement with a partner, you can auto-enroll new contacts into new automation programs.  

  • Lead nurture programs 
  • Event follow-up programs 
  • Retargeting ads 
Customer data to build customer profiles

What is third-party data? 

Third-party data is any data collected and sold to companies by a third party. It’s not directly collected from your customers so its usefulness and value can be brought into question.  

How to use third-party data 

Third-party data is generally collected at a large scale. This makes it useful for brands looking to gain insights into audiences’ behaviors and interests. When used alongside your own first-party data you can uncover and target contacts who fit your customer personas. 

But when choosing to use third-party data, it’s important to consider the issues it can raise. Most importantly – you don’t know how reliable the quality of the data is. After the revelations of scandals such as Cambridge Analytica, customers are extremely wary of receiving unsolicited marketing. If customers believe a brand is targeting them without their explicit consent, their trust will be impossible to win back.  

The growing importance of customer data 

For a customer to become loyal to your brand, you need to earn their trust. How you handle and care for their personal data will go a long way towards earning that trust.  

Consumers today expect a value exchange. They’re happy to hand over personal information about themselves if they can expect a valuable experience in return. Personalization, timeliness, and relevancy are just a couple of ways you can use data to deliver exceptional experiences.  

With new privacy laws and impending updates to iOS software are changing the digital landscape, brands have to pay more attention to what data they’re collecting on customers and how they’re using it.  

How to turn data handling into customer loyalty

In our latest report, we'll be revealing what customers are really looking for when researching new brands and how you can build trust right from the very first interaction.
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