• October 24, 2023
  • By Duncan Steels, vice president and practice lead, Capgemini’s Customer Transformation practice

First-Party Data Is the Most Valuable Resource Organizations Have—If They Can Activate It

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Organizations have another year to finalize their first-party data collection strategies since the deprecation of third-party cookies by one of the major browser and search providers has been delayed until 2024. After that, companies will rely mostly on data shared by customers to create the kind of convergent, seamless experiences those customers expect—and customers will only share their data if they see value from doing so.

Right now, more than 80 percent of brands say they still depend primarily on third-party customer data for marketing, and 40 percent say they’re not ready for the shutoff of third-party cookies, but 89 percent are working on getting their first-party data collection program implemented. Companies need to collect more first-party data, because it’s critical for finding new customers once third-party cookies aren’t present by default. The year ahead is the time to decide how they’ll use that data to recognize and support customers at every point of interaction. That requires getting data out of silos and doing away with some internal organizational silos to allow cross-functional teams to work creatively and deliver the most data-driven value to their customers.

The Complicated Current State of First-Party Data Collection

In general, most companies are trying to assimilate their customer touchpoints, but the companies that seem to be doing that best right now are the digital native tech giants. For many legacy enterprises, the situation is complicated by portfolios of sub-businesses, products, and services they’ve built or acquired over the years. Those subsidiaries and teams most often operate separately within legacy organizations, so any customer data must be joined across them all. Those businesses may not even realize that they share customers.

The result is that, in general, most companies don't have a complete, end-to-end view of all their customer touchpoints, which means they also have a long way to go to understand their customers’ behavior generally, let alone in real time. Even when legacy organizations have gathered their customer touchpoints into data warehouses or lakes, it’s typically reported on and not usually activated yet because of the volume, complexity, and architecture of the data.

Forging a Path to First-Party Data Activation

Organizing and leveraging troves of data starts with a fundamental and unglamorous step: establishing unique customer identifiers and resolving customer identities across subsidiaries, products, and services. For a large enterprise with many sub-businesses, this step can be the most daunting, but identifying customers accurately is critical for everything that comes next.

That next step is to develop and implement a consistent way of collecting customer interactions across businesses. A unified data collection standard allows the entire business to understand how the customer interacts with its brands and to describe those interactions in a standardized way for analysis. Then, it’s time to determine which customer data needs collecting and how quickly (e.g., real time, near real time, and daily), based on the company’s customer interaction goals. The business must also address technical questions about how to collect, store, and activate that data—and how to maintain compliance with data privacy statutes and industry regulations.

Adopting the Right Strategies for First-Party Data Success

All the challenges described above are a heavy lift, and many organizations have been trying to organize and leverage their data over the years. For example, the aforementioned data lakes and warehouses were typically set up in anticipation of gathering and leveraging customer data, before the technical and organizational complexities for taking action from it were fully apparent. The emergence of customer data platforms offered more capability to collect and activate customer data with the promise of doing so at speeds nearer to real time, but importing an entire lake’s worth of data would make the system too cumbersome to use.

The only practical way to address the challenge of first-party data volume and complexity is to proceed use case by use case, balancing feasibility and value. Organizations need to ask what experiences they want to activate and then define the data they need to do so. Applying this incremental approach to the easiest or most important use cases first allows companies to collect and leverage relevant first-party data in a technically manageable way, while also improving the value they provide to their customers.

In addition, companies need to track the way their customers’ behaviors and needs evolve over time. For example, the parents of toddlers today may be shopping for their teenager’s car soon enough, and then move into the empty-nester stage of life. Their purchasing habits will change at each stage. Brands that want to build long-term customer relationships need to enrich their first party data with additional data to understand customers’ movement through different life stages for better anticipating their changing needs.

For large companies with many subsidiaries or brands, it’s best to apply the above strategies at the highest brand level, solve the technical and data identification challenges once, and use that process to create a template for the sub-brands to use. This approach can save money and time while creating consistency among brands that can drive a better overall customer experience.

For example, a beauty-products conglomerate with dozens of brands can use this top-down strategy to improve customer engagement and conversion across its portfolio. When all the brands have the same information about a customer, they can more seamlessly cross-sell with personalized recommendations. That makes customers’ lives easier, which differentiates their experience with that company’s brands, makes them more likely to convert, and can cultivate loyalty over time.

Leveraging Customer Data for Long-Term Success

A strong customer data program can help companies take a holistic view of their CX and marketing investments so they can focus on delivering timely, engaging, and relevant content that delivers real value across the customer journey. By understanding customers now and anticipating their changing needs over time, brands can build loyalty that endures even as customers’ needs and the technology they use to shop continue to evolve. 

Duncan Steels is a vice president and practice lead for Capgemini’s Customer Transformation practice. Steels brings more than 20 years of experience leading the development and execution of customer experience driven business strategies and transformations. He has delivered multiple customer experience-based strategies and digital transformations across commercial organizations for Capgemini in a variety of sectors. Prior to joining Capgemini in 2015, Steels worked in a variety of consulting leadership roles in the professional services, life sciences, financial services, retail/consumer packaged goods (CPRD) and insurance sectors.

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