Using first-party data to find new customers
First-party data is all the rage. Marketers want more of it to understand and get closer to customers. First-party data is rich in actionable insights – for reaching both known and unknown consumers. So, what is known and unknown data? How do brands successfully collect, manage, and leverage these powerful insights effectively?
Understanding known and unknown users
Every business has both a known and an unknown audience. Established and returning customers are where companies glean their known first-party data. This might be through anything from subscriptions to loyalty programmes, email newsletters, or purchases. The important part is, the customer has provided a unique identifier – such as an email address – that allows a brand to track and gather their data. This first-party data has limited scale, however, because it’s attached to a known user ID such as email.
On the flipside, you have your unknown first-party data. These are individuals who have engaged with the business; however, they have not made a purchase, nor have they submitted any personal information or contact method – which means their data remains anonymous. Nevertheless, they have signalled their interest in a particular offering, whether it be through visiting the website and perusing products or services, or by clicking on an ad.
Why bring together known and unknown data
For any brand or business, personalisation is the endgame. To achieve this goal, marketing teams need to see and understand their customer base as a whole. It means they can understand why certain strategies work, identify inefficiencies, and keep advertising relevant. Any fully optimised marketing campaign needs to understand the drop offs to drive acquisition and prospecting – there is only so much reaching out to existing customers a brand can do.
Combining these insights can help marketers analyse, and importantly, activate all gathered first-party data at scale – both for known and unknown customers. It means we surpass the main weakness of known first-party data: its finite nature, allowing for the pooling of multiple, high-quality data sources that facilitates drawing in new customers and expanding top-of-the-funnel opportunities.
So how do brands achieve a successful balancing act that invests in an existing customer base on the one hand, and grows a new one on the other?
Putting two and two together
Bringing together known and unknown data sets will provide a full picture of the consumer journey, enabling brands to better attract customers along the full sales funnel.
At present, there are two tech solutions that can bridge the gap between these two data sets: customer data platforms (CDPs) and data management platforms (DMPs). While the two are similar, there are some key differences between them:
A CDP is commonly used to unify multiple known data sets, thereby dissolving data silos. Although there is a multitude of CDPs available, all with different features and capabilities, the common overarching asset involves centralising all the activity from one single user - from email engagement to the product stock unit in their cart.
A DMP, likewise, groups data together, however it also aggregates and anonymises data from unknown users as well - meaning it can provide insights into prospective customers and identify opportunities for acquisition. It also has strong analytics and data unification capabilities and works particularly well with paid media. In lieu of third-party cookies, some DMPs offer machine learning-powered identity solutions that will preserve and extend connectivity in the advertising ecosystem.
Most marketers will have already used a DMP directly, or via their agency partners, and as a marketing tool, they are rather mature. CDPs, on the other hand, are less familiar, and there often remains some confusion about the capabilities of each particular platform. This is why, when acquiring and using a CDP, it’s important not only to consult with a trusted seller, but also to conduct research by comparing capabilities, and talking to marketing peers who use one. What is clear is that both platforms have their own strengths - and their own weaknesses - which is why companies can only make the most out of their data when CDPs and DMPs are used in tandem.
Getting ahead of the curve
It is a golden opportunity for marketers to have a first-party data strategy that is able to translate unknown audiences into known customers. Gathering as many insights as possible and unifying them into one single source of truth is vital to have a comprehensive understanding and clear view of consumer journeys, which reveals the unique and best method to engage with an audience. Merging the capabilities of both CDPs and DMPs can achieve this – without infringing on privacy.