What you need to know about first-party data

Remember the first party that you ever attended? Yeah, that has nothing to do with first-party data

Param Gopalasamy
Content Marketing Specialist, CIPP/E, CIPM
June 6, 2023

Young Black professional reading a book in a naturally lit office lobby.

Much like a perfectly brewed cup of coffee (assuming you know your beans, of course) or that perfectly balanced avocado toast (do you like chili flakes on top?), understanding your customer in the digital age is all about getting to the good stuff: first-party data. It might sound complicated, but we’re here to make it as simple as buttering your morning toast (with room-temperature butter that is). 


First-party data: what is it?

Imagine you run a little café, let's call it Café-You. You have regular customers, let's call them Regulars. If you ask your Regulars how they take their coffee and note it down, you're gathering first-party data. It’s like when your friend tells you they're allergic to peanuts: You've got that info from the horse's mouth (if your friend was a horse, which they aren't, shout out to Bojack Horseman). 

Now, take that example and apply it to online businesses. Whenever customers interact with your website, mobile app, or social media profile, they leave behind digital breadcrumbs about their likes, dislikes, and behaviors. Collecting these details directly gives you first-party data - it's as if your website had a little chat with them about their coffee preferences.


First-party data vs. Zero party data

Think of zero-party data as an old friend of first-party data. It's a bit like the difference between knowing your friend's coffee preference (first-party data) and them directly telling you what their favorite coffee is, why they love it, and when they usually drink it (zero-party data). While first-party data is collected through interactions, zero-party data is what customers intentionally and proactively share with you. It's not just their peanut allergies but their whole life story around peanuts, like that time they fell into a barrel of peanuts at a carnival when they were seven.

It's deeper, richer data because it comes straight from the customer's mouth. They're practically serving themselves up on a silver platter, telling you directly: "I love caramel macchiatos and I usually buy one on Saturday mornings." Putting these two types of data together forms an earned data strategy. 

For example, you can offer personalized recommendations, loyalty rewards, or exclusive content in exchange for their data. The secret ingredient here is trust. Your customers must trust you enough to share their data, and in return, you should respect their privacy and use their data ethically and wisely. It's a win-win situation. Like having your cake and eating it too, but with data instead of cake!


Why should you care about first-party data?

Well, you remember that time you accidentally served almond croissants to your peanut-allergic friend? Disaster! That's what happens when you don't know your customers. But when you do, it's like giving them the perfect cup of coffee, every time. With first-party data, you get to know your customers up close and personal. You can personalize their experience, create more targeted advertising, and increase engagement and sales. It's like the difference between a generic "To whom it may concern" and a thoughtful "Hello, I heard you like your cappuccinos with extra foam".

And unlike third-party data (collected by someone else and sold to you), first-party data is like the farm-to-table produce of the digital world. Fresh, reliable, and ethical! It's data that customers have willingly given you, so there are fewer concerns about privacy issues, unlike its cousin, third-party data, which has been behaving a bit like a rogue waiter, spilling customer secrets left and right.


But what about the challenges?

Collecting first-party data isn't a cakewalk (or shall we say, scone-walk for our UK-based readers). It can be like finding the perfect vegan cheese - challenging, but ultimately rewarding. First, you've got to convince your customers to share their data. Second, you have to manage and analyze that data, which is no easy feat when you're dealing with hundreds or thousands of customers. And remember, first-party data comes with responsibility. It's like knowing your friend’s embarrassing middle name; you must handle it with care, respect, and total confidentiality.


To wrap it up

Navigating the world of first-party data might seem as challenging as perfecting your sourdough starter, but with the right approach, it can be as rewarding as that first bite of perfectly crisp, tart, and airy homemade bread.

So, whether you’re a small business, a major corporation, or just a curious reader, understanding first-party data is essential in today's digital age. Now go on, brew yourself a cup of knowledge, and dive headfirst into the wonderful world of first-party data! Read our ultimate guide to first-party data to learn more about how your organization can start to develop deeper customer relationships and build personalized experiences.  

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