What makes a customer tick? What makes them buy? When & what will they buy next? Why do they switch to a different retailer? These are the types of questions that marketers should be asking to better understand their customers.
To answer these questions and understand customer behavior, marketers must be willing & able to leverage Big Data–both internal and external–with expert data management and analytics.
So where do you start collecting this data? It may seem basic, but the first step is to go through your database and see the types of information you already have.
Internal (First-Party)Data
This is the data that you own and manage. This includes data from your website ; your CRM; subscription data; social data; and omni-channel data from mobile and brick-and-mortar stores. This type of data includes:
- Customer information (such as name, addresses, phone numbers)
- Transaction data
- Site-interaction data
First-party data is created and stored in systems that you own. This is the highest quality data, it is free and the most important for analytics. Your data is the foundation for learning more about your customer shopping behavior, improving marketing efforts and increasing ROI across marketing efforts.
Second-Party Data
Marketers typically own this data but it is managed by a second party, such as a cloud provider or an email system. Or it may be a situation where you strike a deal with another vendor to get access to their information. Data may include:
- Email interaction rates.
- Ad serving data (clicks, views)
- Social signals
- Keyword search data
This type of data is essentially someone else’s internal or first-party data, and although it’s not generally sold, having a partnership with them give you access to that data. For example you can’t buy data from Google, but if you advertise with them they’ll give you access to their data.
Third-Party Data
This is the type of dat that you have to pay for. This data is gathered through many sources, typically cookies, and offline sources. Providers partner with different websites who drop cookies on their sites allowing the providers to collect data about visitors. They attempt to match users across all sites to make user profiles as comprehensive as possible. This type of data is great for collecting demographic data such as:
- Gender
- Age
- Income
- Children
This sort of data must be bought from data companies and integrated with your data before it can be used. AgilOne already partners with companies like Experian and ExactTarget so you don’t have to go find them.
Public Domain Data
This is public information that is more relevant to business context than actually creating a customer profile. Information such as the increasing average income levels in an area might be used to compare the growth of sales. For example, if the income level of a population in a certain area is rising by 15 percent but the your revenue is only increasing by 3 percent for that geographical location than your performance is lagging.
The Ideal Strategy
Ideally, you’ll try to collect the data from all those sources. Then you have to integrate them. To do that that you have to make sure that all the data is in one format that’s also usable. Unifying and cleaning all this data from disparate sources will require some data wrangling. And then you have to do that again on a frequent basis to make sure that customer profiles are always up-to-date.