Oct 07 2023

The Power of 1st Party Data: Essential Strategies for CPG Brands

The world of marketing is constantly evolving, and the emergence of first party data-driven marketing has brought about a paradigm shift in the way brands communicate with their customers. For Consumer Packaged Goods (CPG) with negligible direct-to-consumer marketing this has meant revisiting how they speak to consumers to bring in the power of 1st party data. In this article, we will explore the different engagement-led data collection strategies for CPG brands, the benefits of collecting privacy-proof 1st party data, how to utilise it for effective digital marketing campaigns, and take a look at the role of Customer Data Platforms (CDPs) that can help accelerate the CPG advertiser’s data maturity.

Brought to you by the Pierian Performance Marketing team

The Imperative to Run with a 1st Party Data Strategy for CPG Brands

We have all heard of the ‘cookieless future’ of digital advertising. One of the primary benefits of this shift is how brands are moving to engage with audiences on a 1st party basis with the ability to discover new and existing customers, improve measurement and attribution of media activity. By analysing customer behaviour patterns and preferences, CPG brands can create personalised marketing messages that are tailored to each customer's individual needs. This can lead to increased customer engagement and loyalty, which can ultimately result in increased sales.

Another benefit of collecting 1st party data is the ability to optimise marketing campaigns for better ROI. CPG brands can use this data to track the effectiveness of their marketing efforts and make adjustments as needed. This can help to maximise the return on investment for marketing campaigns, which can ultimately lead to increased profitability.

Finally, collecting 1st party data can help CPG brands to stay ahead of the competition. By understanding their customers' preferences and behaviour patterns, brands can create a more personalised customer experience for their product and services, which can give them a competitive advantage in the marketplace.Data Collection Strategies for CPG Brands

  • Loyalty Programs & Limited Offerings
  • Direct-to-Consumer Offerings
  • Offline experiences generating data

Loyalty Programs & Limited Offerings

One of the most effective strategies is through loyalty programs. By offering incentives for customers to provide their information, brands can collect valuable data that can be used to improve their marketing efforts. These incentives can be in the form of exclusive discounts, promotions, or other rewards in exchange.

This approach allows CPG brands to collect 1st party data and reconnect with their customers, which was previously disrupted by middlemen like retailers.

Sephora’s Beauty Insider

A great example is Sephora's Beauty Insider program - which is a highly successful loyalty program that has inspired many other similar programs within and outside of the beauty industry. The program offers rewards, point bonuses, a community, and unique experiences. However, Sephora keeps things interesting with point multiplier events that draw attention to specific brands and products. Members in higher tiers get higher multipliers and can earn more points for the same level of spend. By putting this gamification factor in the system, Sephora is able to convince its customer to be part of the loyalty program. The program focuses heavily on customer spend and transactions, with members earning one point per dollar spent.

Data collection starts with a registration form where customers need to enter their first and last name, email address, optional phone number, date of birth, and zip code. This is a great communication example for data collection as Sephora immediately communicates the benefits of providing a birthdate data.

New registrants are taken directly to a membership page where they can see their points balance, available Beauty Insider Cash, and featured rewards.

Sephora's Rewards Bazaar offers a large catalogue of rewards that include products, experiences, and charity options. Especially, the charity option gives Sephora a great opportunity to get emotional values from its customers. In this way, the brand would benefit from adding emotional and non-transactional data in the future.

Coca-Cola Sip & Scan

Coca-Cola has introduced a loyalty program called Coca-Cola Sip & Scan, which can be accessed through their mobile app. This program allows customers to earn rewards for their purchases in a hassle-free manner. They just have to scan the codes on the Coca-Cola products to earn points, which can later be exchanged for exciting rewards like discounts, sweepstakes entries, and unique experiences.

The app also offers customers the opportunity to earn points through social media engagement, surveys, and location-based offerings.

As you can imagine through the app Coca-Cola not only gathers the usual Name, Surname, Email information but also location signals regarding where the products have been consumed and most importantly, opportunity to collect device ID data along with push notifications capabilities.

The best part is that the app provides personalised recommendations and exclusive content based on the interests and behaviours of the customers.

By launching this mobile app-based loyalty program, Coca-Cola can gather valuable first-party data on their customers' preferences and behaviours, which they can use to create more targeted and engaging marketing experiences.

Direct-to-Consumer Offerings

Direct-to-Consumer (D2C) offerings have proven to be a highly effective data collection strategy, and more and more CPG brands are adopting this approach. This approach simply aims to eliminate the middleman especially for high-reward customer segments to obtain and own the transactional and behavioral data.

Mattel Creations

One such brand is Mattel, which has launched a digital platform called Mattel Creations (https://creations.mattel.com/) to cater to its high-value collector consumer base. The response to this pilot initiative was overwhelming, which prompted Mattel to expand it into a full-fledged e-commerce channel. This has not only helped Mattel establish a direct relationship with its customers but has also opened up a new stream of revenue and data collection strategy for the company.

In this way, Mattel is able to collect user-level transactional, behavioural, location data and customer feedback that helps product innovation and product marketing strategy based on data collected by high-rewarding customer segment.

Heineken Beerwulf

Another D2C example is from a beer-brand Heineken. Heineken has launched Beerwulf, an online platform exclusively dedicated to beer enthusiasts across Europe. This platform serves as a one-stop-shop for all home bar needs, which was especially relevant during the corona pandemic. Heineken has taken advantage of this opportunity to sell their own Home Beer Taps, Kegs, Monthly/Bi-monthly subscriptions to customers, resulting in a long-lasting relationship with them.

Heineken not only obtains customer data for communication but also very valuable data regarding customer preference, level of consumption and location. These 1st party data sources may help Heineken build new customer segments and insights over time directly from the beer enthusiasts.

Offline experiences generating data

Although digital channels provide a broader reach, some CPG companies are finding value in creating offline touchpoints to engage with consumers. A notable example is Diageo, the beer and spirits giant, which has established several museums that integrate retail components. The Guinness Storehouse, one of its museums, has become a top tourist destination in Dublin, attracting more than 1.7 million visitors last year. The museum features various bars, cafes, and restaurants, and offers visitors a range of experiences, such as the Guinness Academy, where they can learn how to pour the perfect pint. Diageo has made it easy for visitors to purchase tickets online and even offers extras such as fast-track options and personalised glasses. The popularity of the museum is a testament to the success of Diageo's offline consumer engagement strategy. It's worth mentioning that the Guinness Storehouse provides numerous chances for Diageo to engage with Guinness enthusiasts and collect crucial first-hand data from those engagements.

Certainly, CPG brands can also come up with temporary physical experiences at certain locations and seasons.

Pierian can help CPG brands build a robust 1st party data collection strategy and execute it seamlessly, enabling them to obtain actionable insights that improve ROI.

Talk to Pierian about Building 1st Party Data Collection Strategy →

Where to store and how to activate 1st party data

When it comes to storing 1st party data, brands have a variety of tools at their disposal, including but not limited to, cloud-based Datawarehouses, CRM systems, and Customer Data Platforms. However, it's important to consider where this data should be stored to effectively gain insights and activate it in omni-channel marketing activities.

While Datawarehouses and CRM systems are commonly used, they may not be easily accessible for marketers and lack the ability to support real-time marketing use cases. Additionally, these tools may not provide all the capabilities that a CDP can offer, such as anonymous identity resolution and a marketer-friendly interface for segmentation.

As a result, relying solely on Data warehouses or CRM systems could lead to segmentation issues and ultimately hinder the promise of omnichannel marketing. A CDP can help close the gap by providing marketers with a single unified view of the customer and supporting their entire data and marketing strategy, from segmentation to activation.

Examining the Contrast Between CDP and Data Warehouses

In the past few years, there has been a marked expansion in the Customer Data Platform (CDP) sector, and many companies have taken the step of incorporating CDPs as the basis of their development structure.

For those just getting acquainted with CDPs, they may find themselves wondering, "What makes CDPs so special? Isn't that something our data warehouse already does?"

What is the Definition of a Customer Data Platform?

A Customer Data Platform (CDP) is a technology system that allows organizations to collect customer data from multiple sources and unify it into a single customer view. This consolidated view of customer data can then be used to create personalised customer experiences and optimise marketing campaigns.

A system that provides real-time access to a company's customer data from a variety of sources is known as a Customer Data Platform (CDP). This infrastructure validates the information against a pre-set data plan, generates an all-encompassing customer view, and sends the data to external applications through packaged integrations to facilitate marketing, advertising, customer service, and analytics operations.

A Customer Data Platform offers numerous benefits, including:

  • Enhanced accessibility to current customer data for non-technical personnel
  • Improved customer data quality across the marketing technology stack
  • Efficient data governance procedures and strengthened data security
  • Achieving Single Customer View through deterministic or probabilistic identity matching
  • Faster data activation for better personalization across various channels through digital identity resolutions
  • Decreased engineering time spent on managing vendor integrations and third-party code
  • High integrability with other marketing tools

How does CDP vary from a Data Warehouse?

It has been proposed that a "Composable CDP" can be formed by merging the CDP with the data warehouse. However, it is vital to understand that these two tools are distinct and work best when used in tandem. Data warehouses are intended for long-term storage and analysis of data, while CDPs provide a way of accessing customer data from various sources such as mobile apps or websites.

CDPs can create a Single Customer View by linking customer records across various identifiers like email, phone number, or IP address using deterministic or probabilistic matching. This enables businesses to personalise interactions and create effective marketing campaigns. CDPs also help to monitor customer journeys, segment customers more efficiently, and offer an integrated, customised customer experience across multiple channels. It's an exciting opportunity to improve customer engagement and drive business growth.

Although both systems store and allow access to data from various sources, they are not substitutes for each other. Instead, they can work together to accelerate the realization of value. By providing insights and enhancing customer data along the way, CDPs allow business teams to utilize the data effectively without extensive technical support. In summary, the CDP and the data warehouse are two separate entities that complement each other, and brands can benefit from using both tools together to achieve their goals.

Common challenges faced while choosing a CDP in the CPG industry

While the use of CDPs offers many benefits for CPG brands, there are also several challenges that brands may face:

  • Identifying the right data sources and making sure they are properly connected.
  • Ensuring that data is accurate and up to date.
  • Securing customer data and complying with privacy regulations such as GDPR and CCPA.
  • Integrating CDPs with existing systems such as CRM and marketing automation platforms.
  • Ensuring that the CDP aligns with the brand’s goals and objectives.

If you are a brand looking to implement a Consumer Data Platform, Pierian’s team of experts can guide you through the RFP process, ensuring you select the right CDP for your needs. We understand that every organisation is unique and we tailor our strategies accordingly to bring commercial value to your business.

For those that already have a CDP, our team can help you scale with business demand and deliver continued value.

Contact Pierian today to see how we can help with your CDP RFP, strategy, and operations.

Brought to you by the Pierian Performance Marketing team