For far too long, businesses relied on third-party cookies to target consumers, track their preferences and behaviors, and deliver experiences they believed customers wanted. While this approach has traditionally been viewed as a good way to collect and use data, it actually causes customers to lose trust in their favorite brands.
Customer loyalty is relatively easy to lose. According to the 2022 Zendesk Customer Experience Trends Report, more than 60% of customers will defect after one poor experience with a brand.
When a brand loses a customer’s trust, it can be tough to win it back. However, just as every negative interaction contributes to negative brand perception, every positive interaction can be a positive step toward winning back and keeping customer trust.
To deliver the quality, personalized experiences consumers crave, brands must shift their focus away from third-party cookies to a strategy centered around first-party data.
What is first-party data?
First-party data is information a business gathers directly from its customers, prospects, and users following their interactions with the brand’s properties. Companies collect this data when their audience opts in to provide information.
Examples of first-party data include:
- Audience demographics (e.g., occupation, education, income, age, etc.)
- Customer purchase history
- Behaviors while on a brand’s website or app
- Survey responses
- Feedback on a product or service
Examples of first-party data strategies used by businesses:
- Customer experience and input surveys
- Lead generation forms for downloading content or registering for an event
- Customer service exchanges via email, chat, or social media platforms
- Tracking a user’s journey on their app
- Monitoring website traffic
Users must consent to share their information, which creates a sense of transparency and trust that builds positive brand perception and legitimacy. As businesses and their marketing teams continue searching for new ways to deliver personalized customer experiences, first-party data should be their first approach.
First-party data drives personalized customer experiences
Personalization is how businesses tailor their communications to customers, prospects, and users. And consumers want brand communications curated to their individual needs. Research from McKinsey & Company found that 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when they don’t happen.
With an increased demand for personalization, brands must genuinely understand their customers’ behaviors, preferences, and sentiments to inform the standout experiences they expect. First-party data is the key to doing this.
Let’s put ourselves in a consumer’s shoes and look at a familiar scenario. A few weeks ago, you placed an order for a new camera. Your order status shows that your camera should have arrived yesterday. You’ve watched closely and can’t find the package anywhere. You then reach out to customer service, who says their hands are tied, and you will need to contact the mail carrier.
While going through the frustrating back-and-forth between the mail carrier and customer service team, you receive an email from the same company asking you to rate your recent purchase. The one that you still haven’t received. Your one poor experience turns into two, and you’ve now lost the desire to repurchase from that brand.
The camera company could have kept your business if it had used first-party data to inform its follow-up strategy. Using the information you provided to customer service, the team would be aware of your history and could pause the auto-generated request email until your issue was resolved.
Third-party cookies are risky, and many believe they infringe on users’ privacy. This is why browsers like Safari and Firefox started blocking third-party cookies by default in 2019 and why Chrome plans to phase them out by the end of 2024.
While not dangerous on their own, cookies do have the potential to be hijacked. If cybercriminals get their hands on personal information, this may pose a significant security threat to an organization.
Since a company gathers and owns first-party data, the brand can choose how it’s collected, stored, managed, and secured. By controlling these parameters, businesses can ensure the accuracy and integrity of the data. And for companies looking to cultivate and maintain customer trust and loyalty, this focus on privacy and security is crucial. An added plus is that collecting first-party data makes it easier to comply with data privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
It’s no surprise that third-party cookies are going away. We know that first-party data helps brands and marketers prioritize personalization, privacy, security, and accuracy in a way cookies can’t stack up. However, many businesses still haven’t taken advantage of the benefits first-party data offers. The time is now for companies and their marketing teams to embrace strategies like this if they want to win and retain the most valuable resource of all: customer loyalty.