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By now, most companies recognize the importance of first-party data. Amid deprecating cookies and rising privacy expectations, it's the way of the future for those who want to continue to execute data-driven strategies.

And when harnessed to the fullest, first-party data enables companies to build stronger customer relationships, gain competitive advantage, and drive business growth in a privacy-conscious and customer-centric manner.

Yet, barely one in 20 companies say they've tapped more than 80% of first-party data's potential.

So, what gives?

Every business is a snowflake—each has its own unique mix of first-party data challenges and opportunities. Laying the groundwork for success means understanding the variables that shape the journey and the key milestones along the way.

The Variables That Shape the First-Party Data Journey

Although every company is unique, fundamental commonalities among them shape their first-party data journey.

When accounted for appropriately, considering the following variables can help right-size your approach and ensure you're getting the value from the data that you need, in the timeframe in which you need it:

  • Company profile. Your company's industry vertical, size, regions of operation, and structure (e.g., brands, business units, etc.) all play role in influencing how first-party data is collected, managed, and activated to improve business outcomes.
  • Organizational structure. Internally, how different roles and functions within the company work together significantly determines the success of first-party data initiatives. Having the right skill sets is essential for implementing your use cases and maximizing the value extracted from the data.
  • Current state. The initiatives your company is currently focused on, its maturity in handling customer data today, and any constraints or timelines in place all have an impact on your data journey. In addition, your company's current technology stack will determine both the capabilities and the limitations of first-party data utilization.
  • Target outcome. Finally, your desired outcomes will shape your use cases and dictate the amount of data you need to accomplish your goals. Setting relevant metrics and key performance indicators (KPIs) that are aligned with the overall business requirements will help to ensure a purposeful and results-driven first-party data strategy.

Mapping Out the First-Party Data Journey's Milestones

Although all of the aforementioned macro components influence your first-party data journey, it's ultimately their unique combination that determines the right approach and speed for you and your organization.

But regardless of where your business stands, it's important to remember that turning your first-party data muscle into a competitive advantage is not an overnight process.

Here are the five key milestones you can expect along the way:

  1. Foundation-building. Every first-party data journey begins with a strong foundation. Accounting for the variables mentioned earlier enables you to carefully plan and prioritize the specific use cases that align with your business goals. That foundation sets the stage for future growth and ultimately determines how quickly you can progress from one stage to the next.
  2. Expansion. Once your foundation is set, you can use what you've learned to expand your first-party data strategy to additional brands, regions, and/or business units based on your business needs. For example, expanding across additional brands and regions will enable you to leverage insights across your brand portfolio while simultaneously capturing regional variations and preferences.
  3. Replication. The experience gained from expanding your first-party data strategy can then be used to replicate successful implementations in other channels, teams, and departments. For instance, insights gained from marketing efforts can be leveraged to enhance customer success initiatives, thereby maximizing the value of first-party data across the entire organization.
  4. Diversification. With a solid foundation and expanded data utilization, you can now think about diversifying your growth sources. Doing so involves exploring new revenue opportunities and ways to engage with consumers. By tapping into new growth initiatives, you can position your company for long-term success while adapting more quickly to changes in market conditions and customer behavior.
  5. Innovation. The final stage involves moving beyond the conventional and venturing into innovative territories. Harnessing first-party data insights, companies can explore new business models and revenue streams to stay ahead of the competition. This step requires embracing change and adopting a forward-thinking mindset to drive continual progress.

* * *

By maximizing the value of first-party data, businesses can forge a path to competitive advantage that will set them apart in the long run.

As you set out on your first-party data journey, keep in mind that it will be a multiyear endeavor that's subject to both external and internal factors that may require adjustments to your strategy.

Staying nimble and open to changes will enable you to capitalize on new opportunities while overcoming unexpected challenges along the way.

More Marketing Resources on First-Party Data

A Five-Point Plan for First-Party Data

Connect, Gather, and Learn: Why Events Are the Unheralded Engine of the First-Party Data Resurgence

Why the Internet's Most Valuable Commodity Is First-Party Data

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image of Cory Munchbach

Cory Munchbach is CEO of BlueConic, a customer data platform.

LinkedIn: Cory (Madigan) Munchbach

Twitter: @corinnejames