{"id":385910,"date":"2016-06-08T10:43:24","date_gmt":"2016-06-08T17:43:24","guid":{"rendered":"http:\/\/customerthink.com\/?p=385910"},"modified":"2016-06-08T10:44:21","modified_gmt":"2016-06-08T17:44:21","slug":"a-marketers-guide-to-using-data","status":"publish","type":"post","link":"https:\/\/customerthink.com\/a-marketers-guide-to-using-data\/","title":{"rendered":"A Marketer\u2019s Guide to Using Data"},"content":{"rendered":"
Data is one of the most important assets in the marketing mix. Data-driven marketing delivers results in terms of customer loyalty, customer engagement and market growth. According to a report by Forbes Insights and Turn, Data Driven and Digitally Savvy: The Rise of the New Marketing Organization, \u201cOrganizations that are \u2018leaders\u2019 in data-driven marketing report far higher levels of customer engagement and market growth than their \u2018laggard\u2019 counterparts. In fact, leaders are three times more likely than laggards to say they have achieved competitive advantage in customer engagement\/loyalty (74% vs. 24%) and almost three times more likely to have increased revenues (55% vs. 20%).\u201d<\/p>\n
You may have heard the terms 1st party, 2nd part and 3rd party data. If you aren\u2019t entirely familiar with what each type of data entails, here\u2019s a brief overview.<\/p>\n
1st Party Data<\/strong> 2nd Party Data<\/strong> 3rd Party Data<\/strong> Econsultancy and Signal<\/a> conducted research, asking marketers to rate how they used 1st party, 2nd party, and 3rd party data. When marketers were asked to compare different levels of data and their effect on desired outcomes, first-party data ranked highest across the board. It was most popular for gaining insight into customers, cited by 74% of respondents. More than six in 10 respondents also said it was the easiest to justify using, drove the highest increase in customer value and the highest campaign lift among data sources.<\/p>\n <\/p>\n According to a report by eMarketer, \u201cJanuary 2015 study by Forrester Consulting<\/a>, commissioned by Adroit Digital<\/a>, found that while first-party data had to be accompanied by second- and third-party information<\/a>, it was still the most important source\u2014cited by 87% of US digital marketers and customer insights professionals when asked about their attitudes toward the use of data at their companies.\u201d<\/p>\n <\/p>\n According to the research:<\/p>\n With the wealth of data available today, marketers are increasingly turning to 3rd party providers for a more robust, in-depth view of the consumers they are selling to. A report from Royal Mail Data Services and DataIQ<\/a> highlighted that companies lose an average of 20.7% of their customers each year, making 3rd party data critical in helping companies gain a better understand of who their customers really are, what they really want, and why they really want it \u2013 insights that are difficult to obtain by 1st or 2nd party data alone.<\/p>\n Marketers have traditionally gravitated toward 3rd party data sets as a way to improve customer acquisition. However, with today\u2019s consumers demanding more personalized and relevant communications at the time of their choosing and the channels they prefer, marketers are using these 3rd party data sets to also boost customer retention and improve customer experiences with more relevant and targeted communications. For example, a company may know certain details about a consumer, but learning of something new about them through a third-party data provider, such as age, income, lifestyle, occupation, and so on, allows marketers to find new opportunities for upsell, cross-sell, or a way to bolster the customer relationship.<\/p>\n Consumer Demographics<\/strong> Example of the types of consumer data selects that can be appended to your database include:<\/p>\n Business Firmographics<\/strong> <\/p>\n On average, every 30 minutes 120 business addresses change, 75 phone numbers change, 20 CEOs leave their jobs, and 30 new businesses are formed. (Source: D&B The Sales and Marketing Institute)<\/p>\n Because data is constantly changing and appending data ensures that your database has the most up-to-date information available.<\/p>\n Many 3rd party vendors offer email addresses as part of their business or consumer databases. Unfortunately, many of these email addresses are collected without going through any type of validation process. Because of legal restrictions and CAN-SPAM laws, look for a vendor that utilizes a rigorous validation process. This data should only be compiled from third-party opt-in data and should include a process to identify addresses known to be associated with spam traps, invalid emails and domains, role accounts, complainers, know hard bounces, and more.<\/p>\n
\nThis is data you have captured based on the actions someone makes when interacting with your business. For example, this may be data collected when a user fills out a form on your website (i.e. name, address, phone number); it could be purchases and other transactions, both offline and online, that your customers make (i.e. what types of products or services they purchased from you, when they purchase, how often they purchase); or it could be data gathered from users interacting with your website (i.e. how they arrived at your site, what pages they went to, how long they spent on those pages). Many 1st party data elements can be collected through the numerous interactions your customers and prospects are having with your brand.<\/p>\n
\nThis data term is still relatively new, and refers to another company\u2019s 1st party data that is collected and sold or exchanged to you. Another way to think of this is as data that users aren\u2019t giving you directly, but that you\u2019re obtaining through a direct relationship with another entity. This data is generally unique to you, but it is not strictly \u201cyours\u201d in the sense that you did not collect it from users directly. One example might be a hotel chain working with an airline to mutually benefit from each other\u2019s data sets. Or an apparel retailer and a sportswear brand might exchange data to enhance their co-op advertising programs through better targeting and personalization.<\/p>\n
\n3rd party is external data available for purchase by data providers who source and aggregate the data into applicable sets that can be applied to your 1st party data bases. This data is integral to deploying targeted marketing campaigns, because they provide hundreds of data elements that no consumer would fill out in a single form. With only a few 1st party data elements, 3rd party data sets can be appended to correct and fill in missing elements such as email addresses, phone numbers, lifestyles, demographics, purchase indicators and more to strengthen your customer insights.<\/p>\nBest Uses of Each Data Type<\/h2>\n
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Combining Data with 3rd Party Data Sets<\/h2>\n
A Look at Third Party Data Sets<\/h2>\n
\nData providers aggregate these data sets in different ways and some are better than others. Be sure to look for a provider that uses multiple sources of data including public records, phone directories, U.S. Census data, consumer surveys and other proprietary sources.<\/p>\n\n
\nFor B2B marketers, any number of data selects can be appended to enhance your lead generation efforts. Samples of data selects may include SIC Code, Number of Employees Headquarters\/Branch, Annual Sales Volume, Ethnicity Code, Woman-Owned Business, and Fortune Rank.<\/p>\nEmail Append & Validation<\/h2>\n