Marketers: use first-party data to build your strategy in the wake of COVID-19Strategy Consulting 16 June 2020
There is no doubt that a crisis causes many challenges, but it also creates opportunities to take a step back and rethink a company strategy or organization, especially when it is of such magnitude. With customers staying indoors and online, digital marketing may well be a brand’s best defense against business losses related to coronavirus.
With the crisis come new challenges and opportunities
According to a report from Comscore, there were 779 million visits the week of March 9-15 to the websites of Amazon, Target, and Walmart combined – the highest number of visits of any week so far in 2020. The same thing is happening in China as well. According to a report from S&P, Alibaba and Tencent-backed JD.com reported that online sales of grocery, fresh produce, and consumer essentials grew during the quarantine, driving up the country’s online retail sales of physical goods by 3% to 1.123 trillion yuan in the first two months of the year. In comparison, overall retail sales plunged 20.5% compared to the same period last year. So while the pandemic has sent physical stores reeling, it has also created opportunities for businesses that are well prepared in terms of digitization, while catching others off guard.
At fifty-five, we believe that this is the perfect occasion for companies who have the resources to review their digital strategy and redefine how data is fuelling it. Doing so would definitely give forward-looking companies a competitive edge over competitors who might be slower or unable to react. And one thing you can do now is to strengthen your focus on first-party data collection.
The power of first-party data
First-party data is the data that companies get directly from customers, through means like CRM or website analytics among others. As millions of people flock to online shopping and entertainment, making use of first-party data gives companies clear insights into who their customers are and the types of products or services they ultimately want, thereby allowing companies to build better online experiences to drive conversions. Pivoting to first-party data is all the more necessary today, since third-party data is slowly going out of fashion, with a number of targeting and measurement strategies that you probably rely on losing their effectiveness.
Let us demonstrate the importance of first-party data with the following scenario: suppose you are an e-tailer who might have seen a surge in business recently during the outbreak. How do you make sure to keep as many customers as possible loyal after the lockdown?
One answer is a better utilization of first-party data to make sure that every touchpoint with a user or client contributes to a better customer experience overall. For example, first-party behavioral data augmented with predictive modeling can provide an accurate probability score for a given customer to churn. Equipped with such knowledge (and the proper activation platform), a well-trained marketer can personalize a user journey and keep people with a higher churn probability engaged with the brand, by increasing bids for search or display ads, or personalizing ad copy.
Below are a few tips we want to share with you about how to make this happen.
Get the foundations right
First of all, you need to collect first-party data (with user consent) and know how your visitors are using your digital platforms. The Internet usage spikes during the outbreak is great for data collection, and so it is a good time to ask yourself these questions:
- Have you thought about how to make use of first-party data (CRM, web analytics, etc.) in a way that is both relevant to your company’s current digital maturity (in terms of expected outcome and complexity to implement) and respectful of your users’ privacy and other regulations?
- Is the current data sufficiently usable in terms of data quality and granularity for the use cases that you’ve shortlisted for deployment?
- Does your data carry a matching key (e.g. membership ID) to stitch different sources together, like web, apps, and CRM?
- Have you identified project stakeholders and owners of each data source?
Data quality and granularity are paramount to the success of data-driven initiatives. Now would be a good time to audit and improve measurement frameworks in light of concrete use cases.
Understand your user journey by breaking data silos
Next, you need to connect the dots. With current work-from-home policies in most countries, many companies are engaging with their customers solely via online channels such as social media or search and display ads. In order to understand which touchpoint works best in driving business performance, you need to connect touchpoints and enable an end-to-end view of visitors’ journeys. With user-ID stitching and combining all data sources into a single data lake, you can equip yourself with coherent insights.
As an example, an insurance company in Hong Kong is sparing no efforts despite the current situation to prepare for the post-COVID world. Working with 55, they are able to correlate lead online behaviour with lead quality by stitching web analytics data, which contains the online behaviour of their leads, against CRM data, which contains lead LTV data. Doing so allows them to know which audiences should be targeted for which types of products to increase lead-to-sale performance.
Personalize your campaigns and boost marketing ROI
The next step would be to predict the behavior of each visitor, and tailor his or her experience accordingly. For example, propensity models help predict a customer’s likelihood to convert, and allows you to personalize your ads’ creative content, landing page, or even the offering. This might sound like some kind of rocket science, but many such machine-learning algorithms can be standardized in a cloud environment and deployed in a matter of weeks.
Although companies might be freezing their marketing budgets at the moment, just keep in mind that planning for data-driven activation today will amplify the reach of your marketing dollars when budgets become available again.