Ditch the Cookies, Embrace the Data: Why 1st Party Insights are Vital for Customer Experience

I'm here with a new edition of the CX Revolution Newsletter and today we explore why it's so important to know your customers, their behaviors, patterns, their preferences. We also talk about 1st party data and why it's so important for businesses in 2023.

As businesses adapt to a post-3rd-party-cookie world, the importance of 1st party data in delivering personalized customer experiences is more critical than ever. 1st party data is information that a company collects directly from its customers through various touchpoints like websites, apps, and customer support interactions. This data is unique to the business, making it more reliable, accurate, and relevant than 3rd party data obtained from external sources.

By leveraging 1st party data, businesses can create more meaningful and relevant experiences for their customers. With this data, companies can personalize communications, tailor product recommendations, and optimize the customer journey based on individual preferences and behaviors.

According to a study by Forrester, 87% of marketers consider first-party data to be important for their marketing efforts. It provides businesses with valuable insights into their customers' behaviors, preferences, and needs, allowing them to deliver personalized and relevant experiences that drive engagement and loyalty.

In contrast, relying solely on third-party data can lead to a lack of control over data quality, accuracy, and privacy. This, in turn, can lead to ineffective targeting, wasted ad spend, and reduced customer trust.

The death of third-party cookies is also having a significant impact on advertising revenue. According to eMarketer, the total loss in ad revenue due to the death of third-party cookies was around $11 billion in 2021 and increased to $12.2 billion in 2022.

With such a significant impact on advertising revenue, businesses need to adapt to this change and focus on building good quality first-party data to maintain their advertising effectiveness.

For CMOs, the focus has shifted towards building strong customer relationships and providing personalized experiences. According to a survey by Gartner, customer experience is now the top priority for CMOs, with 82% of CMOs expecting to compete primarily on customer experience in the near future. 51% of CMOs stated that improving their data and analytics capabilities is their top marketing priority.

The bottom line is that 1st party data is the future of customer experience. It's accurate, reliable, and up-to-date. And by focusing on building good quality customer data, businesses can better understand their customers' needs, preferences, and behaviors, and deliver personalized experiences that drive customer loyalty and retention.