3 types of data you use every single day without thinking about it
Have you ever considered buying white sneakers, and the next day when you opened your computer, a flood of white sneaker offers popped up on you?
Maybe one of the websites even sent you a discount coupon to buy just the shoes you were looking at?
If you have experienced this, you have experienced personalized marketing. It is likely that the company you interacted with knew you wanted this because they used a Customer Data Platform (CDP).
Personalization is the process by which marketers use customer data to create a marketing strategy tailored to each individual customer. Customer analysis includes data about the customer such as their interests and behavioral data as well as demographic data.
Simply put, personalization could be described as a tool to increase the relevant communication that the customer receives from a company. Today, the market is oversaturated with services, making customers more demanding. One small mistake in the purchasing process can mean the conversion of a customer to the competition.
Why you need to personalize
That’s why salespeople and marketers need to get more accurate, detailed, and up-to-date information about their customers. This way they can respond to specific needs of each customer at the right time and in the right place (through the right channels). By doing this you can offer them a customer experience tailor-made for every single one of them.
Because when you really need these white sneakers, don’t you find it annoying when they offer you a discount on your trousers in the store? Do you say to yourself, could they not give me this discount for the sneakers I was looking for?
Another aspect to consider in personalization is predictive adaptation. The ability to predict the behavior, needs, or wishes of a customer, and thus very precisely adapt the offer and communication to fit them.
Having access to data means having a better knowledge of your customers. Therefore, a marketer who effectively uses their customer data and analysis to personalize the whole process will also know that you need white sneakers size 39 and the best way to convince you to buy them is to offer the product from your favorite brand through Instagram advertising. Because Instagram is where you are most active at the time you are most likely to purchase the item.
What type of data is the best to use for personalization?
So if you’ve caught it, customer data and analysis is the central point of this whole process. But where do I get this knowledge, and how can I separate it?
Basically, we could describe it as the process of meeting a new person. Meet someone new, introduce yourself to each other -Let’s say his name is Filip. Share basic information with each other -he is 25yo and lives in London. Every time you spend time together or communicate in any way your brain automatically creates a small database about the person.
First party data
Your brain remembers the last time you were at lunch. He ordered a fish and told you what amazing wine he had the night before with his girlfriend. Now you know he is not a vegan or a vegetarian, he eats fish, and he shares his passion for good red wines with his girlfriend. Next time you meet you probably will not take him to a vegan restaurant for his birthday, but you’d more likely buy him a bottle of good red wine, right?
Well, let’s say that in this case you just worked with the first-party data – the information that the person – Filip- provided for you and you used it for later interaction – in this case, to choose a gift for Filip. You worked with first-party data to make this decision.
Second party data
But there is also other information about Filip that you did not get directly from him. Information you learned about him from social networks, from posts someone wrote about him, or from what someone else told you about him.
Filip’s girlfriend told you that Filip also likes dark chocolate. In essence, this is second-hand information or second-party data. Basically, information that you do not have direct access to collect by yourself, but you just trust that your source provides it to you.
With both first-party and the second-party data, that you have you would and also buy him chocolate. This decision was based on both your first- and second-party data.
How to support your insights with third-party data
There is also one of the most talked-about subjects in marketing currently. The infamous third-party data Let’s say your friend researched which bar was considered the most popular among young people in London. She asked a few random people and the most common answer was The Connaught Bar.
And because Filip fits into the category of young people in London, you assume that he will also visit this bar someday. Well, with this information, you have a slightly smaller chance that the Filip you have chosen will fall into this category.
Therefore, third-party data is considered to be the lowest quality data type and it is much better and more accurate to use first and second-party data for personalization purposes. However, collecting this data can be the fastest and cheapest way to gain insights into people’s behavior.
How to collect data in the most accessible way?
There are many different ways to use your data, but having a Customer Data Platform is one to consider! A CDP is a platform that collects data from various sources, analyses the data, consolidates, and gives you an overview of customer behavior, profiles, and how to interact with your customer.
The Customer Data Platform contains information about your customers who have already made a purchase or provided other information (such as creating a profile on the webshop or providing an email address to receive a newsletter). After this step (purchase), the CDP tracks the customer’s path back.
This makes it possible to get as much data from this action as possible. So you get the customer’s demographic profile: age, name, address, contact information. Information derived from the customer’s behavior on the web or mobile application. Transaction data: how much money the customer spent on which products, what is your net profit from their purchase, or information about the return of goods or complaints.
Furthermore, we have data that we call Customer service data. It includes data about live chat, number, and frequency of interactions, and last but not least Campaign metrics data, which include: number of impressions, active involvement, reach, and other metrics from marketing campaigns.
We are talking about using first / second-party data, which are the highest quality and most accurate type of data.
How to activate your data
Simply put, the whole process goes as follows: your brain collects different information about different people, from different sources and creates a big collection with many categories. As we mentioned above – so when it comes to the question of which of your friends will appreciate good red wine the most, you think about Filip first.
You then look for a suitable candidate among your friends, who will take care of your flowers during your holiday. -Of course, it should be Lena! The responsible nice girl, who lives next to you. All this information can help you find the right product for your customer and the best way to offer it. But you can use the information for much more!
You can find the right customer for your product, you can find out where and when they prefer to receive communication about your products. You can even find out where their price sensitivity lies!
The difference between our brain and CDP is that CDP creates these analyses based on numbers and accurate data. It is able to hold a much larger volume of data and process it much faster than our brain can even comprehend.
Book a demo today and learn how you can use it
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