The Power of First Party Data

You already possess one of the most powerful marketing tools out there. (And if you don’t, it’s basically

What Is It?

We talk a lot about data in this age of information, and it’s easy to confuse the terms and labels we throw around. Let’s break it down.

“Third-Party” data comes from the world outside your business and your partners. It’s raw.  “3rd party data is data that relates to your customer’s world, entirely separate from any connection to your brand.” (Lexer) “Second-Party” data is much more specific to your business—it comes from your partners. Think sales figures from Shopify or analytics from Google, YouTube, Facebook, or Instagram. It’s data a Third-Party has collected and provided to you.

“First-Party” data, then, is data you collect. It’s your business’s records. It’s your existing customers. And, as we’ll discover, it’s the best of the bunch.

Why Does It Matter?

First-Party data is the most powerful dataset available to you. If Second and Third-Party data provides a good viewpoint of the market landscape through an open window, First-Party data is a set of binoculars with heat-seeking technology that whispers in your ear “look over there!”

Think about it this way: Third-Party data is useful. It can tell you who you should think about targeting with your marketing dollars. Second-Party data can give you a smaller set of more specific information, and can be borderline as helpful as First-Party data, but ultimately it is First-Party data that will play the biggest role in what you decide to do in your marketing. The reason is simple: it’s a proven concept. These data points represent real, actual successes: things your business has done, and customers your business has provided goods or services to.

Real Results 

Let’s get really specific. For one of our clients, we utilize a couple of different tactics with print mailers. Tactic #1 is using a partner who collects geographical and demographical data and sells it to us in the form of a mailing list. “You should send coupons to these customers – they make the most sense for what you’re selling.” Ok. Second-Party data. We do pretty well with these!

Tactic #2 is using our own, First-Party, collected data. “These customers have already purchased something from us in the past. Maybe they liked it and will purchase again!” Each month, we send postcards to customers periodically after they last purchased a service from us. We do really well with these.

Data Type June + July Conversions Cost Per Acquisition
1st Party Data 143 $12.13
2nd Party Data 45 $82.53

In both June and July, we saw 3x more conversions from Tactic #2 than Tactic #1 with CPAs over 6x lower.

Now, there are good reasons we still utilize Tactic #1 despite the overwhelming stats I just laid out, but we’ll go into that another time. This blog’s about First-Party data, after all.

How To Get Started, How to Utilize It, and Recognizing Its Limitations

…To Be Continued. Watch this space!

– Evan Murray


Lexer | 1st, 2nd and 3rd Party Customer Data Explained