Data is the lifeblood of any modern business. It helps you make informed decisions about marketing, product development, and overall business strategy. Unfortunately, not all data is created equally.
First party data is some of the most valuable information you can get. You’re likely already collecting it now but may not be making the best use of it. I want to change that.
In this guide, you’ll learn what 1st party data is, how to use it, and how it compares to other types of data.
What is first party data?
First party data can be defined as information you collect directly from your customers or your own sources using various means. This is data you’ve sourced and own outright. No middlemen, vendors, or brokers are involved. This information can be gotten through:
- Analytics tools on your website, applications, etc.
- Interactions with customers in the wild like at events
- Through customer support channels
- Formal surveys soliciting feedback from customers
- Information from payments
As you can see, you are likely already collecting first party data that can produce a wealth of insights if it’s used properly. Keep in mind that first party data isn’t limited to demographic info, psychographic info, or anything like that.
It’s focused on how you collect the data instead of what the data is.
Examples of first party data
There are countless examples of first party data but I’ll walk you through a scenario to illustrate how it can be collected actively and passively.
A customer logs in to a software application and is clicking around, doing their thing. After a few minutes, they realize their work isn’t autosaving and there’s no button to save manually.
They reach out via the live chat widget in the corner. When a support rep responds, they let them know autosave isn’t working. They also mention in passing that a manual save button would be useful to them.
The feedback requesting a manual save button is 1st party data that can be used to inform the product roadmap. You also may have collected usage data from them passively depending on your analytics setup.
I’m sure you and your team have interactions with customers multiple times every day. A lot of data is generated through these touchpoints and it may be a good idea to create a formal process for kicking the information up the ladder.
A more structured way organizations collect first party data includes surveys. We’ll go into more detail on the nuances of data collection later in this guide. For now, let’s look at how first party data compares to other types of data.
First party data vs other types of data
There are many categorizations of data that are based on how it’s obtained. Keep in mind that first party data, while effective, isn’t ideal in every situation so it’s important to understand the other types of data you can access.
1st party data vs 2nd party data
Second party data is information you get from a third party that collected it directly from their audience, customer, or own sources. It’s their first party data. It can be purchased, traded, or otherwise acquired by you and your organization.
For example, If Feel Good Inc. ran a survey of its audience and published the results on its website, that would be second party data. At the same time, if Feel Bad Inc. ran a survey of its audience and sold it to your organization, that would still be second party data.
2nd party data could be a powerful supplement to your first party data. This is especially true if you don’t have the resources to collect first party data at scale.
The drawback of second party data is that you have no control over its accuracy and it may not be directly applicable to you.
For example, the company you’re getting it from may not have been strict in their data collection processes and sanitation, or maybe the survey asked leading questions. At the same time, your markets may be similar but the context under which the data was collected may lead to different insights.
1st party data vs 3rd party data
3Rd party data is information you get from a third party that didn’t collect the data themselves. This is the most common type of information you receive from a data broker. The organization you purchase the data from may work with many data collection firms or just a few. The fact remains that they don’t collect the info directly.
This data can be extremely useful for general market research. The scope is usually larger than any single organization can get on its own because it’s pulled from multiple sources. The data is aggregated, cleaned, and categorized before being sold so it’s
- Easier to interpret
- Easier to find data that’s relevant to you – the buyer
The most important thing to consider when buying third party data is where it came from. If you’re targeting consumers in the United States, third party data from France wouldn’t be productive for you. Keep in mind that this data is readily available to anyone that wants to buy it so it’s important to supplement it with first party and second party data.
How to collect first party data
There’s no hard and fast answer here. The short answer is that it depends. The long answer is that it depends on your resources, goals, and timeframe to make it happen.
The first, and often most useful, method to collect first-party data is through surveys. It’s a structured process that makes the respondent give replies to questions you need answers to.
- Customer feedback surveys
- NPS surveys
- Demographic surveys
- Psychographic surveys
Surveys can also be used as a prequalification tool when doing lead generation. For example, instead of just asking for name and email, you can ask for occupation, income, gender, or any other relevant piece of information before collecting email/name.
Incentivize users to share more of their information. It’s one thing to dig into your analytics to find out relevant information about users. It’s another thing entirely for them to tell you themselves. Whenever possible, give your customers/users a reason to share even more.
- Give them an incentive to get on a phone call with you.
- Give them incentive to leave product feedback
- Give them an incentive to fill out that survey
Incentives don’t have to be monetary either. You can give them more access or exclusive access. You can mention them in a prominent place on your website. You can tag them on social media (this works if you have a larger following). Incentives are only limited by your creativity.
Applications of first party data
Building audience segments
When you know who your audience is and their preferences, it becomes easier to create accurate audience segments. With these unique segments, you can tweak marketing campaigns and also get better at developing products your customers care about.
This is also a great tool when you’re using paid advertising platforms to reach your audience. You won’t have to test so many segments before finding a winner because you have a clear idea of who your customer is.
First-party data includes what you glean from analytics tools. If you have the advertising pixels from platforms like Facebook or Google Ads installed then you can remarket to your customers irrespective of where they may end up online.
Countless studies have shown that retargeting campaigns can be extremely effective if they’re used properly. The first step is to understand who’s visiting and what they’re interested in. After that, you can build relevant creatives to generate a sale from those who otherwise wouldn’t have purchased.
The more you know about someone, the more intimate and effective you can make your communication. This builds on retargeting but should encompass as much of your communications as possible.
For example, you can run a multi-channel campaign targeted at a specific user by using Facebook ads, display ads, and email marketing.
Email marketing can be personalized based on their purchase history, browsing history, and more. The display ad campaign may be more general while the Facebook ad campaign can be structured as a funnel on its own.
Planning marketing campaigns
With the right audience segments (as mentioned in a previous point), you’re able to build marketing campaigns that resonate with a specific type of consumer. This makes planning much easier because you have a clear avatar in mind and all you have to do is appeal to them.
Your messaging is more powerful, more useful, and converts much better than generic – appeal to everyone – campaigns. Start small to test your assumptions then roll out larger and larger campaigns as you achieve more ROI.
Informing product development
Last, but certainly not least, is a clearer product roadmap. This comes as a direct result of actively soliciting customer feedback. With the right feedback, customers will tell you what they like, dislike, and the features they need.
A fringe benefit of this is engaging your community and getting them to feel invested in the product. Their voices are ‘heard’ and you have a ready source of beta testers. After all, they requested the feature so they should be the first people to want to use it.
When it comes to data, first-party data is the holy grail for organizations of all types. With that being said, it does have its own limitations. This guide has gone through what it is, how it compares to other types of data, and the best ways to use it.
If you’ve not done so already, start collecting it and brainstorming ideas of how to make it work for you.