Not All Data is Created Equally
Customer data is essential to every company. This information helps executives make decisions about everything. Data comes in all varieties from all kinds of systems. Sometimes this data comes directly from the customer, other times it comes from your company. And of course, there are times that it comes from another source.
While data might seem boring, it is how companies craft the best customer experiences. Data helps businesses understand the customer and how to better serve them. Better data builds better experiences. But where does the best data come from?
New to the scene, zero-party data is super similar to first-party data, but with slight differences. This type of information is data that a customer intentionally gives, whereas first-party is collected about the customer through direct interactions.
Customers today happily fill out forms, questionnaires, and surveys. Many times, customers give this information in exchange for rewards. A customer will share what they are shopping for, how they wish you to communicate with them, and their general interests.
First-party data is what its name implies–it comes directly from your interactions with a customer. This collection can come from in-person meetings, or through your website or mobile applications. This information is related to purchases along with support issues dealt with. This data is fairly easy to collect
Some examples of this type of data might be demographics, types of purchases, website activity, email response, interactions during sales, customer support calls, feedback requests, along with recorded customer interests or behaviors. All this information tells you who is shopping and what they’re buying.
Oftentimes, first-party data isn’t enough. Some companies don’t have the technical ability to collect specific information. So, it is common practice to turn to trusted partners that are experts in data collection and purchase this data.
With this option, you can trust the data is high-quality, accurate, and relevant because both companies involved have a mutually beneficial relationship. Second-party data is collected in a similar way to first-party, but just by an outside company. However, it naturally can be more extensive and comprehensive.
Third-party data is similar in nature to first and second-party, but it is gathered from a data aggregator. These companies do not gather data themselves. Rather, they collect it from other companies and organize it into a unified dataset.
The result of this method is that the sample size is much larger. However, this often means you don’t get a clear idea of who the audience is. The benefit of this type of data is that you can reach a wide audience. The best option is to combine this broad but vague data with first or second-party information.
Whatever type of data you are using, it is ultimately power in your hands and you should use it wisely. This information, no matter where it comes from, can help find new customers and increase satisfaction with existing ones.
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