Marketing Experts Reveal Why a First-Party Data Foundation Is Critical in 2023

To remain competitive and relevant in today’s fast-paced landscape, brands must embrace digital transformation, leading the charge to a more data-centric world. But how many of them are actually taking action? 

According to Rajan Kumar, co-founder and CEO of The Lumery, they all are but to different degrees. “Brands have been taking steps around digital transformation for years. The brands we work with haven’t been standing still,” he says.

“There’s a heightened sensitivity around security, privacy and value of customer data. The second lens is on business capability. Every CEO we speak to is facing challenges around the attraction and retention of talent. And the third focus is on what’s happening in the technology landscape. 

“Most brands are still catching up with the concept of a CDP (customer data platform). This space is moving at a rapid pace. But what’s most important for brands to be thinking about is how they can move forward and not become stagnant or paralysed by all of the change that’s taking place.”

A significant challenge marketers have been up against is the impending demise of the third-party cookie. It’s been a huge disruption for digital marketers. In fact, Mefsut says it’s presenting more questions than answers around privacy and transparency as it relates to consumer control of data.

“A lot of marketers aren’t seeing the change in a positive way,” he says, explaining the silver lining of the deprecation of third-party cookies. “The changes in regulations will be centred around their human experience with brands. This will help them better focus on building consumer trust.”

There are always a few brands that are on the cutting edge, leading the way for other brands to follow suit. And a popular one that comes to mind is Apple. Last year, as part of iOS 14 and iPadOS 14, Apple launched a number of significant privacy features intended to help users take control of their data.

Since Apple launched those changes, only 16% of Apple users have opted in to use tracking. That means, 84% of people no longer want brands to consume and collect their data. These changes occur because of two main factors — customer expectations and legal changes. But the consumer is always at the heart of leading these changes. 

Focus on first-party data today to maintain a leading position tomorrow

It’s no surprise that all brands want to stay ahead of the competition. However, it is eye-opening that, according to GfK research, only one in four marketers are very confident in the data systems they use to win and retain customers. Even more, whilst 85% of marketers say direct access to customer data is critical to gain a competitive advantage, only 9% of marketers say customer data is highly accessible. 

The marketers and brands that are getting it right have invested in technology that helps them make sense of messy customer data, providing a complete view of each individual consumer. Terry Mefsut, director of marketing technology from Deloitte, believes CDPs like Amperity provide huge value for brands, not only in activation but in the retention of their customers. 

“First-party data is crucial as it provides us with an opportunity to prove that we know our customers, which in turn, helps us strengthen the relationships we have with our customers,” he says.

“That will help us serve better across our owned media as well as from a technology perspective as an identifier. As marketers, we always talk about how we can create better cross-platform experiences, yet we have data from so many different channels that we can’t really stitch together.

“Brands have to invest in the right ecosystem that can help them activate and understand the data. A solid first-party data ecosystem can help build customer profiles, making them available for marketers to build better journeys and recognise these profiles across channels, no matter which channel it is,” Mefsut adds.

First-party data is also beneficial to marketers because it’s something brands can control. They can leapfrog the competition by taking a proactive approach to the deprecation of third-party cookies, transforming challenge into opportunity.

“This heightened consumer awareness – and expectation – about how their data is used is driving a lot of change,” Kumar says. “This is a great opportunity for brands. If consumers expect greater transparency and a higher level of trust, then give it to them. Be very clear about what you’re collecting, why you’re collecting it, and how you’re going to use and manage it. These are all big questions for organisations to consider.”

It’s also vital, Kumar shares, to truly understand what personalisation is. “A number of brands are confused about what personalisation actually is. Personalisation is about being extremely relevant in the moment,” he says. And for that data-driven insights are key. 

“We advise organisations to lift this up from a first-party data, marketing, comms, divisional sort of responsibility, to the CEO level,” Kumar continues. 

“This will help in truly putting the customer at the core of your entire organisation. It will affect how you make decisions about managing data, how you collect it, where you store it, and also how you can activate and use it against the customer's needs.”

The brands that are getting it right

As consumers, we all engage with multiple brands on a daily basis. We know when we've had good engagement with a brand – and it's typically not because they sent a relevant email. It’s the ecosystem that represents the brand and the people inside it that have access to the most important information about you to make sure it’s relevant.

Mefsut agrees, saying the brands who get it right do more than send a good email — they create a relationship with the consumer and offer them a seamless experience, regardless of where the interactions occur. “There’s a feeling that the brand actually knows them and is invested in the relationship. It’s a two-way relationship,” he says.

“We’re seeing the commoditisation of a lot of the products that our clients are selling. And the only thing they have to compete on is the experience that they create with their customers. Creating a better brand experience for customers built on trust will help them win the battle against their competitors.”

Kumar adds, “The best brands are breaking down the walls of concepts that say this is marketing versus service versus digital, and they’re thinking about the customer at the core of everything.”

Privacy-first world

When brands are successful, it’s because they’re harnessing the power of data. A data-driven approach results in higher retention, greater customer lifetime value and every dollar in marketing goes further. The one thing that’s often forgotten in this entire equation is business productivity. And, to go even deeper, so is the topic around consumer trust. With all the data breaches occurring globally, it’s time to rethink how we collect, manage and use data in business today.

Kumar agrees. “In light of all of the data breaches, data collection, storage and usage is now on the tip of everyone’s tongue,” he says. “This question of trust, credibility and transparency is at an all-time high. This is a tremendous opportunity for brands to shift from the way things have always been done and better educate their customers about data usage.”

Data breaches aren’t new. They’re just making the headlines more often, which is putting them top of mind for everyone. And when it’s top of the agenda, you start to see a lot of movement across the industry with brands and the legislation space at the government level.

Brands have been a little late to the game, waiting for things to happen. That can’t be the way forward. Now, it’s time they start taking action – not just talking about it.

Mefsut says that’s not necessarily an easy task for organisations as many of them lack the capability to access a single source of truth. “Many are often unable to legitimately answer what it takes to remove someone’s customer data. I’ve asked this question multiple times in organisations, and they can’t give me a straight answer on what the source of truth is,” he says.

“There are often four or five people that need to get involved at a minimum to completely remove customer data. And there’s not a lot of confidence that, even then, it’s actually done.”

The last decade or so has witnessed a rapid evolution of technological adoption driven through the lens of customer experience. Kumar believes this is shifting to technology investment towards customer data security governance. “Both must be balanced appropriately,” he urges. “We’re seeing a lot of brands beginning to ask different questions to the vendor landscape; questions that weren’t asked in the last five or ten years.”

It might not be sexy, but data quality and accuracy are vital. It’s the fuel of any organisation. Data is the one thing that is going to allow every downstream system to ensure the right experience and performance metrics are met. We all know if bad experiences happen, the customer is going to leave or unsubscribe. All of those downstream effects start to impact the business.

Dirty data and employee productivity

Everyone knows that dirty data messes with customer experience. But what about employees? Mefsut says, they also suffer. “Dirty data is creating massive inefficiencies. Teams are left waiting for the data they need. Sometimes the data is delayed or wrong. Or a CMO comes back and changes up the segmentation, resulting in more waiting,” he says.

“The challenge that marketers have is bridging the gap between what they need and competing priorities. Having a good data foundation must be an organisation-wide objective, starting at the CEO level. When we start driving objectives down, they become everyone’s problem to solve — not just marketers’.”

Messy data also opens up more opportunity for security issues. “Mistakes happen when doing manual work. That’s the reality of it. It has nothing to do with the competency of your team,” Kumar says.

Organisations that are still operating with a number of manual processes are missing out on chances for success, he continues. “If you have 15 or 20 people involved in the email campaign process, then they’re not doing more strategic, growth-oriented tasks. You’re missing out on opportunity – there’s an opportunity cost.”

Beyond the implications of messy data on performance, employee satisfaction suffers — not what a business wants as ‘Quiet Quitting’ trends gain momentum and the war on talent continues. “If you have top talent performing repetitive manual tasks, they’re going to leave. They’re going to find an organisation that is investing in innovation, breaking down silos and empowering them to do better customer-led work,” Kumar explains.

When brands and organisations stop fighting against ‘messy data’ and start working with it, great things begin to happen for the business, employees and customers. Take a look:

Tools for the modern marketer

Martech solutions have come a long way in the last decade. There are now multitudes of tools to leverage for a better customer experience. And some companies have up to twelve different vendors that sit inside their organisation. 

However, it’s vital organisations go beyond the ‘shiny-new-toy syndrome’ and complete their tech stack in a way that takes their people and processes into account as well. If you can’t align your people and processes, then the solution isn’t going to fix anything.

“Often, we’re seeing organisations under-invest in their own capability and over-invest in tech purchases. The industry is starting to drive more education around operationalising marketing technology and what that takes,” Kumar says.

Working with messy data

The truth is, customer data will always be messy. The brands who embrace this truth are the ones who are winning, Kumar says. “When brands grasp the opportunities of messy data and tackle it in appropriate ways, they’re seeing better productivity, more innovation and greater employee satisfaction.

“When brands focus on tackling efficiency and governance challenges, whilst empowering their people to focus more on innovation and growth, the overall business wins.”

Laying a solid, first-party data foundation is the most important project for a business to win in today’s uncertain landscape where consumer behaviour is constantly changing. Customer metrics drive business metrics. With the right technology that can provide a strong customer ID foundation, brands can build the most accurate and comprehensive view of their customers and grow their business — and stop wasting their efforts on ‘cleaning’ dirty data.

​Amperity is the CDP that turns messy data into value. With its unique approach to creating a true unified view of the customer, Amperity revolutionises how brands use data to deliver stand-out customer experiences.