We live in a data-driven world. There are approximately 4.66 billion active Internet users worldwide, creating mass amounts of data across countless daily digital interactions. For today’s B2B marketers, navigating data is a critical skill. Additionally, the landscape of customer data collection and privacy is always changing. Federal regulations such as the American Data Privacy and Protection Act (ADPPA) or state-specific regulations such as the California Privacy Rights Act (CPRA) affect how companies collect, maintain and use data.
With so many types of data available, it can be challenging to know where to start. Data can provide insights into customers, competitors, the marketplace, sales transactions and marketing campaign initiatives, among others. When it comes to consumer data, marketers need to understand the sources, benefits and challenges associated with zero-, first-, second- and third-party data.
Up Close and Personal: Zero- and First-Party Customer Data
Zero-party data is customer information that the customers themselves intentionally share with a brand. It is sometimes referred to as declared data since the customer is electing to respond, whether in a survey, poll, landing page, review, testimonial or across sales interactions. Zero-party is a highly valuable tool that provides direct feedback from the people who already interact with your brand. B2B marketers can use these direct channels to ask customers about their product interests, experience preferences, current challenges and needs. Then, companies can use that information to offer customized solutions, personalize messaging and foster customer loyalty. It also improves lead generation by further targeting the prospects that can most benefit from your products or services. Consider incentivizing customer feedback to garner the benefits of zero-party data. In fact, 79 percent of consumers are willing to share their data if there’s a clear benefit for them.
First-party data is data collected about a brand’s own audience and customers but isn’t proactively shared by users. Instead, first-party data is based on the user’s interactions with a brand. Information can include website analytics, email marketing or social media engagement, and customer behavior data. In most cases, first-party data is collected when a user agrees to allow an organization to track their activity while present on their website. For example, data can show time spent on-site, which links were clicked or how often users visit. B2B marketers can leverage this data to improve targeting and segmentation, create personalized content, and optimize marketing campaigns. It can also save the user’s preferences, such as language or location settings. Typically, this data is collected directly through internal applications, website providers or external tools such as Google Analytics.
A Broader Market View: Second- and Third-Party Data
Second-party data is data that a brand acquires from a trusted partner, such as a vendor or supplier. It’s essentially the same as having access to another company’s zero- or first-party data, with the customer’s consent. Second-party data can be used to expand the reach of a brand’s target audience, gain insights into new markets, and create new opportunities for cross-selling and upselling. For example, a manufacturer armed with second-party data from a supplier can gather new insights about innovations or marketplace trends that impact competitors and stakeholders. From there, they can identify new opportunities and predict future customer needs. It’s important to gather second-party data from trusted sources in related industries to ensure information is relevant to your business.
Third-party data is acquired from external sources that are collected and organized by data aggregators. This type of data can be used to enrich a brand’s outreach in new markets, discover unique opportunities or diversify its network. It’s important to note that third-party data can be less reliable than first-party data in terms of accuracy and user consent. Because of this, additional verification and validation may be required. Most third-party data is purchased through a DSP (demand side platform) or a DMP (data management platform) for advertising. Third-party data marketplaces, such as Google, Acxiom and OnAudience, are other options for marketers.
It’s a Combined Effort
When considering which types of data to collect, maintain and leverage, a unified approach is important. “First and foremost, it’s about unifying all the data in one place so that it can be analyzed,” said Kristina Prokop of Dun & Bradstreet in an interview with Wired Insider. “This way, the data can be used in its entirety to learn about your customers, build segments of who you want to reach, and figure out how to communicate with them.”
B2B marketers have numerous types of data at their disposal. Each type can help businesses gain insights into their target audience and improve their marketing strategies. To stay in compliance and generate real trust with customers, it is critical to use data carefully and wisely. Understanding the benefits and limitations of each type is key to making better decisions and establishing a competitive edge in the marketplace.
