I originally wrote today’s post for CX Network. It appeared on their site on July 27, 2023.
Data is at the heart of designing and delivering a great customer experience. Without data, you’re literally flying blind. But there’s so much data! And so many different kinds of data. Let’s start there.
I typically think about the data you have about your customers in three different ways: you asked for it, you listened for it through various channels, or customers left breadcrumbs behind as they interacted or transacted with the brand.
Some folks get a bit more technical and talk about earned data and first-party data. (And there are so many other types of data!) Let’s take a look at the difference between these two.
Earned data is the information or insights gleaned through the actions, interactions, or behaviors of your customers. It’s generated through organic means and doesn’t involve direct monetary transactions. It is intentionally shared by customers and is acquired through voluntary customer engagement, social media interactions, reviews, comments, shares, referrals, and other forms of user-generated content. It’s used to optimize and personalize the customer journey.
First-party data is what I refer to as those breadcrumbs of data that customers leave behind as they interact or transact with your company. It’s also referred to as owned data. Customers typically know that you’re collecting this data when they engage with the brand (e.g., purchase history, website or mobile app activity, support calls, customer feedback, etc.). It’s considered “owned” because it belongs to the company, as the name implies. It can include purchase history, web analytics, loyalty program data, contact center interactions, customer profiles, CRM data, and more.
Collecting Earned Data
Given the variety of sources of earned data, there are a multitude of ways to collect it. Collecting earned data involves capturing information or insights that are generated through organic user actions, interactions, or behaviors. Remember: it’s earned data. You earned it. You didn’t directly ask for it. Here are some collection methods:
- Social Media Monitoring: Keep track of mentions, hashtags, likes, shares, comments, and discussions related to your brand or products on various social media platforms. Social media monitoring tools can help aggregate and analyze this data to understand customer sentiment and engagement.
- Customer Reviews and Testimonials: Positive reviews and testimonials on your website or review platforms can serve as earned data that boosts brand reputation and credibility.
- Word-of-Mouth/Referrals: Implement referral programs to encourage existing customers to refer their friends, family, or colleagues to your business. Or deliver an experience that ensures they refer without any encouragement from you!
- User-Generated Content: Users will create and share content, e.g., videos, pictures, blog posts, social media posts, related to your brand, products, or services.
- Brand Mentions: Keep track of mentions of your brand or products on social media, blogs, forums, and other online platforms. Unsolicited mentions and feedback provide valuable insights.
- Online Communities: Engage with online communities, forums, and discussion boards related to your industry or niche. Observe and monitor these conversations to glean insights and customer sentiment.
- Customer Feedback: Voluntary feedback provided by customers through feedback forms or other channels can also be considered earned data.
Collecting First-Party Data
Collecting first-party data involves directly gathering information from your customers or users through interactions. Here are some common methods to collect first-party data:
- Website and App Tracking: Use web analytics tools on your site and mobile apps to track user behavior, including page views, time spent on pages, click-through rates, and abandonment.
- Registration and Account Creation: Encourage users to register on your site or app or to create accounts in order to access exclusive content, services, or personalized experiences. This allows you to collect valuable user data, such as email addresses, demographics, and preferences.
- Transaction Data: When customers make purchases on your site, collect transaction data, including order details, product preferences, purchase history, and payment information.
- Email Marketing: Utilize email marketing campaigns to communicate with your customers. Analyze user engagement with emails, such as open rates, click-through rates, and subscription preferences.
- Customer Surveys: Ask for feedback via surveys to gather valuable information about preferences, satisfaction levels, and pain points.
- Social Media Interactions: Monitor and analyze user interactions, comments, and messages to gain insights into customer sentiments and feedback.
- Loyalty Programs: Gather data on customer preferences, purchase frequency, and behavior.
- Contact Forms and Customer Service Interactions: Collect data from contact forms on your website or from interactions with customer service representatives.
- Online Events and Webinars: Collect data from registrations and attendee interactions to understand their interests and preferences.
Make sure that your data collection processes comply with data protection regulations and respect user privacy. Be transparent about what you’re collecting and why. Implement clear and accessible privacy policies, provide options for users to manage their data preferences, and communicate transparently about how you intend to use their data. Build trust and offer value to your customers.
Putting Your Data to Work
The power of first-party data and earned data lies in how organizations utilize it to drive decision-making and to improve customer experiences. Here are just some of the ways your organization can use this data.
- Personalization: First-party data enables personalized marketing efforts and tailored customer experiences, thereby increasing customer satisfaction and loyalty.
- Recommendations: Use the data to personalize product recommendations based on previous purchases coupled with product reviews that reinforce the trustworthiness of the recommendations.
- Product Upgrades: Use the data to improve your products or product offerings.
- Journey Orchestration: Utilize both earned and first-party data to orchestrate the customer journey and to make recommendations on the next best actions.
- Marketing Campaigns: Leverage first-party data to create targeted marketing campaigns that resonate with specific customer segments, resulting in higher conversion rates.
- Brand Advocacy: Earned data can help identify your most enthusiastic customers, allowing you to nurture these relationships and turn satisfied customers into brand advocates.
- Relationship Building: When you have the right data, you can use it to build stronger relationships by engaging in a meaningful way, by solving problems, or by proactively communicating with customers and delighting them with the unexpected.
- Decision–Making: Your data-driven decisions just got a boost; use this data to make better decisions about the business and for the customer.
- Social Media Engagement: Combine user preference data with social media interactions data to create engaging content that resonates with your customers.
That’s just a sampling of the ways that you can operationalize earned and first-party data. Whether you use earned and first-party data separately or marry the data to create a more robust picture of your customers and their needs, you’re guaranteed to deliver a better experience that will please your customers. Without data, none of this is possible!
In the end you should only measure and look at the numbers that drive action, meaning that the data tells you what you should do next. ~ Alexander Peiniger
Image courtesy of Pixabay.