Highlights

Why CPG Needs First-Party Data to Succeed

By Matt Louden | July 22, 2021
Retail Personalization Index

Between Google’s latest announcement, Apple’s upcoming changes, and existing regulations like GDPR and CCPA, the importance of first-party data is growing across marketing circles everywhere.

Unfortunately for consumer packaged goods (CPG) companies, this shift comes with more disadvantages than most other industries.

CPG brands seldom interact with the people purchasing and using their products—leaving them with lots of work and little in the way of answers when it comes to improving customer engagement and experiences across digital marketing channels.

Going forward, this model must change. Because CPG needs first-party data solutions to succeed.

Diving into a data-driven approach

The recent rise in ecommerce is leading brands of every industry to rethink how they connect with customers

Collecting, analyzing, and using first-party data to personalize customer interactions enables brands to understand how individual engagement evolves across multi-touch buyer journeys. And any organization that knows how people are using its digital touchpoints is well-positioned to provide a consistent, rewarding experience across every marketing channel available.

Adjusting your first-party data approach for success

A marketing strategy that prioritizes first-party data incentivizes customer loyalty and long-term relationships. After any purchase, these insights are immediately delivered back to your team—allowing you to follow up with engaged shoppers through new product launches, promotions, and customized interactions to (hopefully) make another sale.

So, how do you build a successful CPG first-party data strategy? Take a look at these five focus areas to get started:

  1. Communicate your intentions clearly and honestly
  2. Build data profiles for every customer
  3. Unify and unsilo your data
  4. Get executive leadership involved
  5. Establish a data governance policy

Step #1: Set the stage for success

Collecting more first-party data from your customers comes down to one thing: communication. If you can clearly show or explain the benefits someone gains by submitting their personal information, they’re much more willing to stick around long-term and share their data with your brand.

Set the stage for your future now by asking customers for their permission anytime you collect personal insights you intend to use, share, etc. But don’t stop there — because unless you clearly explain every piece of data you store and what its purpose is, consumers may not feel comfortable enough to share their information with you. Even worse, you could be in violation of data privacy regulations like GDPR that carry severe legal consequences.

When you request an online shopper’s birth date, for example, make sure you let them know it’s for a special birthday surprise next year. You may be surprised at just how many more people respond to your offer once they know they get something of value out of the exchange.

Step #2: Build your future one customer at a time

Would you ask someone to marry you on a first date? Of course not! So don’t expect people to become loyal customers after one interaction just because CPG needs more first-party data to succeed. Building a truly meaningful, data-driven relationship with your audience requires unique data profiles for every member to work.

So, where do you start? The perfect place is with a small request, like asking someone to confirm their brand email preferences. By putting this power in your customers’ hands and making changes easy to make, you learn more about the topics they’d like to hear more about, their motivations, their favorite content formats, etc. with no extra work needed.

Then, as your relationship matures, you can make bigger and bigger ‘asks.’ Embedded email surveys, subscription and signup forms, and (hopefully) purchase data deliver a progressive profiling approach where you learn more and more about each specific shopper to make their next interaction more personalized and valuable through the info they submit.

Step #3: Escape inefficiency forever

A first-party data strategy’s success isn’t determined by marketing. It comes down to delivering value to your customers across every experience and interaction.

With thousands (or more) of individual shoppers to keep track of, personalization at this scale can be difficult to consistently support. Especially without the centralized, cross-channel view of an entire first-party dataset 70% of CPG currently lacks. Because you’re not just designing and marketing products using these insights — you’re addressing consumer questions and concerns, processing ecommerce purchases, dealing with complaints, and building a loyal customer base through your first-party data too.

By getting the basics right and recognizing consumers as individuals, you can build accurate data profiles that support your marketing efforts across every channel as behaviors, preferences, and conditions change. Giving you the ability to handle industry shifts before they happen to give the right customer the right message at the time they’re ready to act.

Plus, a wealth of actionable first-party data puts you in a much better place to negotiate and work with retail partners. You’ll have a greater understanding than ever of what drives uptake, conversions, retention rate, and more whenever a new product or promotion is being launched — making your marketing strategy much more effective.

Step #4: Bring leaders to the table

Information is an important tool for any CPG organization. And its impact is bigger than any single team, so take your first-party data conversation to the boardroom — or at least the executive level if your office isn’t open yet.

To make an impactful data strategy successful, you need to set company-wide goals, identify the insights and technologies essential to this process, calculate the precise costs and value first-party data brings, and avoid the risks associated with a serious breach. All things that simply can’t be done without the buy-in of your leadership team.

Step #5: Put a permanent policy in place

CPG is a complex space, and that means you need to be careful about how you access, manage, and use the data you collect from customers. The easiest way to ensure you’re safely and legally handling personal information is by putting a first-party data governance policy into practice.

Especially if your company consists of several brands across multiple geographies that each need different levels of access to the insights they’re allowed to use. Establish a center of excellence for building enterprise-wide data standards, defining roles and responsibilities of everybody involved, identifying ongoing training needs, and more. That way, every new process and protocol you put into action delivers maximum value to both you and your customers by giving CPG the first-party data it needs.

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