The opportunity to harness first party data in personalisation and digital marketing

In my last article I explored how - in the context of COVID-19 - the harnessing and utilisation of first party data is becoming an increasingly important part of the value-creation puzzle, and outlined ways companies can begin to adapt to our new reality. This included ways companies can build new capabilities to listen to their customers and respond quickly in what is a rapidly changing environment. However, understanding the value of first party data is one thing; unlocking the benefits is another.

I recently spoke at the 2020 Programmatic Summit in Sydney and Melbourne about BCG and Google’s Marketing Maturity Study, which has just been released. We spoke with 160 companies across 10 industries, both public and private. The results give an insight into how companies are interacting with first party data, and they are compelling; the vast majority of companies see the value in first party data, but struggle to unlock the benefits.

In the Asia-Pacific region, 87% of brands think it’s critical. And some companies are getting it right: globally, Amazon, Netflix and Starbucks are examples. At home, loyalty programs are examples of companies that have truly grasped the value of first party data.

But 56% of companies rate themselves as average or below average at harnessing the power of first party data.

Understanding the challenges

So why do companies find it so challenging to unlock the benefits of first party data? There are several key reasons. The first is lack of a single view of customer. Brands have the ability to collect customer data from multiple touch points – from app use to spending and website browsing habits. But stitching all of that data together to create a single view of a customer is remarkably difficult – 82% of respondents said this was a barrier to achieving significant business impact.

Obtaining a view of the customer is getting harder in context of COVID-19, with their behaviour, choice of channel and needs changing quickly. For example, we recently saw rapid shifts in the demand for groceries, then a move to eCommerce and a rapid rise in the DIY category as consumers settled into the new norm at home.

One approach is to assemble a picture of the customer in priority order. This might involve linking data that helps companies understand the changing needs of customers for the most important use cases, for example by starting with web behaviour, email click through rates or POS data to measure success of new campaigns or promotions at a customer level.

The challenge of collecting data from multiple touch points stems from an inability to link technologies and, often, challenges integrating the data. Companies are able to utilise an increasing amount of marketing technology that can perform a vast array of impressive functions, but how these various programs and processes talk to each other is challenging; and requires sustained investment in new platforms and capabilities.

Navigating the complex world of harnessing and utilising first party data requires the right people and talent – another constraint faced by companies. And once the right people are found, there are organisational constraints to consider: how can new teams become more customer-value focused? How can they be more agile? How can technologists, data scientists, marketers and human-centred design all sing from the same hymn sheet? From what I see, this is generally the central issue to be solved and never more important as in the dynamic environment we face as a result of the impacts of COVID-19.

There are lessons to be learnt. I have seen companies over-invest in technology and under-invest in understanding customer use cases and the people change required; building impressive, complex platforms for data collection without an end goal in sight. But without a customer focus and the right team, the technology is useless.

There is plenty of value in using data for greater personalisation of customer services. Increasingly, companies across industries – from banks and airlines to utility companies – are exploring what information they can gather from customers and how to make experiences tailored to a customer’s individual context. The experience can extend beyond trying to sell a product; it could be about a service, customer-company interactions – truly spanning the end-to-end experience.

Getting it right can really impact a customer’s experience. For example, if an airline cancels a flight, the company can use the first party data it has collected about impacted passengers to communicate to them in ways that resonate and to help them change their plans. Our research tells us that customers want this level of engagement, provided the means of collecting data and the way the data is used doesn’t cross any boundaries.

The three steps of maturity

Through our research, we have found there is a proven path to success, and a series of steps a company can take to harness and utilise first party data. It involves setting the foundation, building connections and making every moment matter. They are the three key pillars to a company's successful use of first party data, shown below

In my experience, most companies sit somewhere in the middle level of maturity – they have set some foundations and are now working through how to scale new capabilities to use first party data.

Having worked with leading Australian brands, I have seen a number of them pushing through this maturity level with a focus on one or two channels first, for example social media and email marketing first, before they scale up once the results are proven.

In a COVID-19 context where consumer preferences are shifting rapidly, this might mean deliberately experimenting more broadly with offers or messages via one or two channels where companies can get quick feedback on click rates, for example, as an early indicator of shifting customer behaviour.

Companies need to think carefully about how they go about the first party data journey. But with the implementation of these steps, they will be better able to see just what first party data can achieve for the benefit of customers and the bottom line.

Michael Schniering is a topic expert on personalisation and digital growth. He is a Managing Director and Partner in BCG’s Sydney office. This article is the second in a two-part series on how companies harness and utilise first party data.