You may be a brand, activation or insights manager looking for promising technology to help increase your sales volume, improve your retention and enlarge your market share.
You need marketing data from your existing or potential consumers; among them, first-party data is the most relevant, effective, and profitable.
Some companies with a small marketing budget have difficulty acquiring first- party data; they cannot afford it. Because of that, the gap between large and small companies is increasing.
However, no matter if you are a small company or a large one, if you make data-driven decisions, use your data wisely, and adopt a data-driven company culture you will succeed. Especially the use of first-party data can help you create incredible growth & differentiation.
First-party data can help a smaller company catch up to the competition and enlarge market share, and it can help a larger company create a crucial competitive advantage to differentiate from the rest of the pack!
Marketing Data For Competitiveness
As you plan to reach your marketing goals, there is a plethora of marketing data that you can utilise.
Web browsing data,PII data, ad data such as Google Analytics, first or second or third-party data about personal info of your target markets such as sales or intent information are other types of marketing data.
You can also use search engines, statistic providers, and industry reports. You can also buy retailers’ post data, engagement companies’ data, or market research companies’ data.
Why Is First-Party Consumer Data Essential?
First-party consumer data has become critical to business success, and many companies have learned how to use it, at least to some degree, in their marketing planning and operations. The only choice now is how committed a business is to put data in the driver’s seat. For enterprises that fully commit to being data-driven, this choice offers significant payoffs that can make the difference between surviving and thriving.
Marketers need to rely more heavily on first-party data without access to cookies (and as we move into a cookie-less world). The good news is that first-party data has many benefits over third-party data, including:
- More accurate data. Because you are collecting data directly from customers, you know it has not been altered
- The ability to collect the exact data you want in the format that works best for your team
- Real-time processing, meaning you can review and react to information as soon as you receive it
First-party data can create a competitive advantage for your brand—but only if you know how to collect, analyse, and act upon the data.
But There Are Many Difficulties In Acquiring Marketing Data
Industries are facing many challenges like statistical measurement of quality, efficient handling of data and its storage, and accumulated cost of the complete data solutions. They are struggling to acquire data without sacrificing the quality and reliability of the data. Different firms attempt different solutions for marketing data.
Moreover, data acquisition isn’t passive. Each enterprise must determine the best way to acquire the data it needs, efficiently analyse it for strategic insights, and then put it to use in a way that drives meaningful results. According to the IDG 2018 State of Digital Business Transformation report, the top three obstacles to achieving success with digital business initiatives are:
- Lack of staff and/or correct skill sets
- A need to replace legacy systems
- Insufficient budget
Two effective ways to collect first-party consumer data are creating transactional platforms and non-transactional platforms owned by your brand. Creating your own online shop can help your brand acquire personal information as well as behavioural shopper information through the purchases of your consumers. This solution could work if most of your sales volume is from DTC channels.
If a high percentage of your sales volume relies on retailers, a creative solution can be to build a retailer independent digital campaign platform. You can ask your consumers to validate their purchases on your platform to earn a reward for your campaigns, thus collecting data on their shopping behaviour outside of your DTC channels.
A great tool for collecting shopping behaviour is receipt processing technology. Receipt processing technology validates a consumer’s purchase for a campaign, also allowing you to collect data based on their entire shopping habit from their specific store journeys, rather than collecting data based on only the items they’ve bought from your DTC channels. Receipts can help you understand the shopper personas of your consumers, what products are frequently bought with yours, which days & times your consumer segments shop most frequently and much more demographic, psychographic, geographic information about your consumers.
Small companies cannot afford it, and the gap is increasing!
Small companies cannot afford to acquire 1st party data. Therefore, the large companies who use them are getting more competitive.
The performance gap between the large and small increases too. The difference in median return on operating assets was 15% in the 1990s but has recently doubled to 30-35% — an enormous gap in the profitability of operating assets. Inspecting the two groups, big and small companies, separately clarifies that the large companies are getting more profitable, whereas the small ones suffer from chronic unprofitability. The median return on operating assets and the median profit margin of the small companies turned negative during 2015-2017.
So, outsourcing data collection can be a viable solution for smaller companies. Collecting data through your marketing campaigns can be a great idea; because you can outsource the digital work for campaign creation to a martech agency to ensure stable costs, and you can create a ROI positive marketing project to prevent an increase of marketing costs. The collection of valuable consumer data will also allow you to expand market share & reduce the competitive gap with larger companies, through the net positive lifetime return you’ve gained!