The abundance of data available at our fingertips is not an uncommon topic in the industry these days. Neither is the question: how do we use it effectively?
Admittedly, it’s challenging. We’ve got data flying in from practically every direction and an ongoing battle to effectively communicate said data in an engaging way. We’re fighting to ensure that it reaches – and then resonates – with the right decision-makers. If we can’t do that consistently, we can’t achieve Customer Salience.
At this point, it’s probably worth defining data. Of particular interest to me in exploring the future are zero-party and first party data. Zero-party data, the type less commonly mentioned, is what the customer deliberately tells us about themselves, whether that be personal information or purchase intentions. In other words, what we might consider market research (broken down to an individual scale).
First-party data, on the other hand, is what we collect from a customer when they’re interacting with us directly. Examples include purchase history and what they have viewed on our website. But is the distinction even relevant? I think of it like this:
If a consumer tells us one thing through our zero-party data, but then we see them go and do something else instead through our first-party data, we now have two conflicting pieces of information and a building feeling of frustration as we look at our reporting. At the end of the day, researchers are not mind readers (as much as we’d like to be).
So, perhaps a better question we should be asking ourselves is: how do we make the most of both forms of data to predict, understand and respond to the complex realities of consumer behaviour?
A segmentation gives us a picture of who our market collectively are at any given point in time. It’s typically data that is collected occasionally, rather than continuously, and groups customers based on demographics, psychographics and so on.
The data described is valuable, sure, but it’s also useful to know what the customer is likely to want right now or even in the future, instead of what they wanted when they answered a survey when they created an account a year ago. Because life isn’t static. Our circumstances change constantly.
A customer fits in one group for a short period of time, but is better suited to another group soon after…
What changing circumstances means for our segmentation reminds me of the great work that Ellie Osborne does in creating a culture of Customer Centricity at Saga. Customers may start as a data point but continually snowballing that point with a range of data can create a fully formed profile that explains any discrepancies/conflicts in the data and evolves over time. But how can we do this with a combination zero-party and first-party data?
Rather than relying on zero-party or first-party, why not combine both? The result would be a dynamic audience segment that updates in real time, combining intent, behaviour and context.
A live segmentation strategy is the best of both worlds. Matching up what customers tell us and how they’re interacting with us on an ongoing basis enables us to confidently report on who our customers are today (and more accurately forecast who they might become). The strategy offers combined data that is:
In addition to this, a live segmentation model that includes both zero-party and first-party data puts in place a safety net for a post-cookie world. But what’s the best way to access this data? Is there a place where it’s already stored? The answer to the latter leads into my final point…
An onlineresearch community is overflowing with zero-party data. How the data on that community is managed is important, because:
Looking to the future, the value of such a database is set to increase. Factors such as privacy laws, browser/operating restrictions (third-party cookies), and consumers’ own privacy protecting behaviours… all have been decreasing the usefulness and the accuracy of data. Forrester notes that 42% of organisations are reducing their use of third-party data, choosing to invest in gathering zero-party data instead.
Put simply, the shift has already started. But why invest from scratch when your research community is a great base to build on?
With the abundance of data and cookie-related challenges, the value of a dynamic research community filled with zero-party data is only set to increase. As researchers, we already have a lot of the answers right in front of us; we simply need to find the best way to communicate the value of both the technology and ourselves (the latter being another conversation entirely, though MRX Lab podcast episodes featuring Rupesh Patel and Natalie Delahunty are a good place to start if you’re interested in how communication strategies earn insight a seat at the table).
Looking to the future, gathering more generalised data doesn’t feel like the way forward. Rather, prioritising what we have and what rolls in consistently through our communities and CRM is something that we can build on instead.
Live segmentation of zero-party and first-party data could play a defining role, as it’s more focused on understanding the now and predicting future behaviour of customers. Our priority must be on ensuring that this segmentation strategy lands well when shared in an organisation. If it does, decision-makers can continue to make decisions that are customer salient.