If you’re running a direct-to-consumer business, it’s your consumer data that can help you get any form of success—financial, social, or operational. Data has every business in a chokehold so tight that it is impossible to design and put together any kind of business operation without taking into account the data collected. After all, the business is designed by the consumers, for the consumers.
The collected data helps you shape:
➡️ Marketing strategies for the brand
➡️ Changes in the existing product and service
➡️ New product and service launches
➡️ Improved customer journeys
➡️ Efficient access to digital touchpoints
➡️ Personalized marketing
And more.
But how you obtain data is becoming just as important as the data itself. There is a constant shift in the importance of zero-party, first-party, second-party, and third-party data, and brands must know the difference if they want to keep the customers to keep coming back for more.
What’s Zero-Party Data?
Zero-party data, also known as “explicit data,” refers to data that a customer is willingly sharing with your brand as they interact with your eCommerce store or any other digital channels. The best way to ensure your customers wouldn’t hesitate in providing their data online is by creating a highly engaging and interactive experience. You must also make it clear to them how and where you’d be collecting their data to avoid any misunderstandings. Some ways to collect zero-party data are:
- On-site polls, quizzes, & surveys;
- Social media channels;
- Digital Contests, and;
- Registration or sign-up forms
What’s First-Party Data?
First-party data is consumer information that you collect and own. With an increasing degree of restrictions on the collection of third-party data, first-party information is now highly valuable to marketers. Since it’s native to your business, it is more reliable and personalized. It’s data directly from your consumers, so you can play around with how you wish to make use of these insights that are directed straight at your products, services, and customer experience. As it’s implied that the data you’ve collected from your consumers will be used to redesign your customer experience to cater to their needs directly, you can be shameless about using it for email marketing, personalized messages, tailored promotions, and on-site product recommendations. Some examples of first-party data are:
- CRM data
- Purchase history
- Behavioral data via your website
- Consumer feedback
- Social media engagement
What’s Second Party Data?
Second-party data is exactly first-party data, except that you aren’t the one doing the sourcing. Consecutively, you don’t own it too. It is collected by another company and sold to interested or relevant businesses in the form of a paid partnership.
The ultimate downside: this data isn’t for YOU. The business sourcing the data may or may not be relevant to you and your business. Hence, designing your operations and strategies based on data that isn’t catering to your audience may do more harm than good.
What’s Third-Party Data?
This is the most talked-about kind of data; it’s the kind of guest that people start speaking about even before they enter the party.
Third-party data is bought from sources that are not the original owners of the information as well. Large data aggregators source this data from other sources such as large corporations, government entities, researchers, and corporate conglomerates that have never-ending access to consumers. After the acquisition of the data, aggregators analyze and sort through the data to categorize it into industry type, audience behavior, demographic, and other such characteristics for rapid distribution.
Data is paramount when it comes to running a DTC business. If you wish to build a successful business, begin by understanding the kind of data you’d benefit from the most and start collecting it effectively.
