The Crucial Role of First-Party Identity in Customer Experience

Customer identity is key in differentiating between a great and a poor – or even negative – customer experience. Without accurately identifying your customers, true success is pretty unattainable. However, for identity resolution to be effective, it must be conducted in a first-party manner.

Most identity resolution vendors operate as third parties, often downplaying the importance of first-party identity. They claim they can do better, but there’s a reason they ask for your data and expect you to fill in the gaps. They can’t provide the same level of service and rely on customers to supplement their incomplete identity profiles.

Here are 11 things vendors don’t want you to know about first-party identity:

Understanding Third-Party vs. First-Party Identity

Just like data types, identity resolution can be either third-party or first-party. Third-party data is purchased or licensed from vendors who don’t have direct relationships with the consumers. This data is aggregated from various sources and sold to brands. In contrast, first-party data is collected directly from your customers through your owned domains, platforms, and apps.

First-party identity follows the same principle: it’s captured, assembled, and owned by you. Third-party identity, however, is built and controlled by an external vendor. This distinction is critical because, with third-party identity resolution, you don’t own or control the data, nor do you know its original source or quality.

Think of the impact that has on customer trust!

11 Truths About First-Party Identity

  1. Full Ownership and Control: You have complete control over the data and identity profiles, ensuring compliance with regulations and browser restrictions. It’s also the right thing to do for your customers.
  2. Resilience to Data Regulations: First-party identity isn’t impacted by data regulations and restrictions like Apple ITP, IDFA, third-party cookie deprecation, and CNAME restrictions that limit third-party vendors.
  3. True Real-Time Personalization: Third-party data requires processing before use, making real-time personalization impossible. First-party identity allows instant access to data for immediate action.
  4. Cost-Effective: First-party data is low or no cost. Eliminating third-party providers saves money and reduces the need for extensive data wrangling by data scientists.
  5. Comprehensive Data Integration: First-party identity consolidates data from all sessions, devices, and domains into a single definitive identity, eliminating errors from incomplete or inconsistent data.
  6. Unlimited Use Cases: With complete information about your audience, first-party identity offers endless possibilities for optimizing marketing and customer experience campaigns across various channels.
  7. Deeper Insights: First-party data provides valuable insights into product and service usage, helping brands forecast demand, identify revenue drivers, and understand sales trends.
  8. Stronger Lookalike Targeting: With a complete customer identity, creating accurate lookalike audiences becomes easier, leading to higher conversions and acquisitions.
  9. High Reliability: First-party data is directly collected from consumers, ensuring accuracy and timeliness without middleman interference.
  10. Enhanced Customer Understanding: A first-party identity graph provides deeper insights by identifying customers quickly and compliantly.
  11. Empowered Data-Driven Marketing: Utilizing first-party identity allows for more impactful and cost-effective marketing programs based on firsthand insights about your audience.

Role of First-Party Identity

The perceived “free” nature of third-party identity solutions often comes with hidden costs and risks. The investment in a premium first-party identity solution, while initially costly, provides substantial benefits through accurate, real-time data and robust features. This gives your brand a competitive edge, making the investment well worth it. Don’t risk your brand’s success on inferior third-party tools—they cost more than you think.

Content updated February 2024.

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