Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.

The Importance of First-Party Data

Editor's Note: Take a look at our featured best practice, Data Governance: Roles & Responsibilities (24-slide PowerPoint presentation). Data standardization, precision, and security aren't the sole dominion of folks working within the IT department. These tasks involve participation of a number of stakeholders from across the organization. Incoherent data creates hurdles in Data Analytics and business operations. Data [read more]

* * * *

It’s clearly evident that the use of data for a business is highly effective in many ways. From understanding more about your customers to using that data for the benefit of marketing and product development purposes.

The more data a business gets its hands-on, the better. With accurate data, your business has all the information it needs to step up its business-making decisions.

First-party data is perhaps considered one of the most purposeful and important types of data available. A survey in 2022 carried out among business managers found that 37% of their brands used first-party data exclusively in order to personalize their customer experiences. This is a rise in usage as a year earlier it stood at 31%.

Whether you’re using first-party data already or you don’t have a clue what first-party data is, it’s important to maximize your usage of it for the business.

Data continues to be one of the hottest commodities for a business to have, so it’s worth investing the time and effort to retrieve this type of data.

What Is First-Party Data

First-party data, also defined as 1P data or 1st-party data, is the information that’s collected directly from your customer base. Whenever they interact with the site itself or through marketing, this data becomes available to the business.

This type of data is probably one of the most accurate and insightful for businesses to have because, unlike other data sources, it comes from the customer themselves.

What Are Some Examples of First-Party Data?

In order to understand what first-party data looks like, it’s useful to know what you’re looking for when tracking said data. Here are some of the most common examples of first-party data that you’ll receive from your customers.

  • Location of the customer
  • Demographic – age, employment, education, etc.
  • Purchase history and loyalty status
  • Any used or unused coupons or discounts

This basic type of data is one of the most vital to have as a business as it fills in all of the gaps you may not yet have about your customers.

Considering the rise in data policies and restrictions being made to third-party cookies, having your own company data is more vital than ever.

How First-Party Data Affects Your Business

How is your business affected by first-party data? Well, first party-data is that direct connection to your customers that if gathered and used correctly, could become a goldmine for business.

Without first-party data, you’re not able to accurately control your marketing efforts or build those relationships with your customers. There are many benefits to using first-party data and the resulting outcome could be the difference between finding success or not.

Targeting Customers

According to Nielson, 86% of respondents from medium and large companies found that first-party data was the most significant for building a business media strategy. Targeting your customers is a necessary part of running a successful business.

Without first-party data, you don’t have information at hand to seek out those target customers. Instead, your marketing team is taking aimless stabs in the dark and spending the company budget while doing so. With first-party data insights, you’ll be able to improve your omnichannel marketing efforts, including the SMS marketing for your business.

Compliance with Privacy Laws and Cookie Policies

The growth of privacy laws has meant many businesses have had to scramble to achieve compliance. From GDPR to California’s CCPA data privacy policy, accessing customer data more freely is becoming limited.

Not only that but all websites now require a cookie policy for users approaching the site for the first time. This policy gives the user the freedom to allow or deny the use of data monitoring. With the right cookie policy template, you are able to continue to gather data without compromising compliance.

New privacy laws are catching more businesses out and costing them a fortune in fines, so it’s important to take compliance seriously.

Lower Costs

For businesses that may be limited in their funds and ability to spend on data investment, first-party data is essentially free. It’s collected through day-to-day operations and although there may be some costs associated with the methods of collecting this data, they are minimal compared to other sources of data collection.

Therefore, the use of first-party data is well worth spending time on, especially if you’re a new business or startup.

Personalization and Control

First-party data affects your business and its ability to personalize the content you put out there. It also helps to control what content you publish and provide to your users.

A great benefit to this type of data is that it is useful to combine with AI and machine-learning technologies, which are widely available nowadays. The results of which could be the interactions users need to convert to paying customers.

The Purpose and Uses of First-Party Data

The purpose of first-party data is to deliver valuable information to your business and those who make the important decisions that impact the organization. Whether that be positively or negatively, the choices they make are influenced heavily by data – or the lack of data they possess.

There are many uses for first-party data that you may or may not be aware of. Here are just a few ways that first-party data is put to good use.

  • Landing pages – Great for A/B testing to see what communications work best with your users.
  • Paid advertising – Targets the right users through paid advertising across many channels.
  • Personalized marketing – For business-to-business marketing, first-party data is handy for personalized content.
  • Emails – Useful for segmenting your audience to create customized emails and more engaging content.
  • Social media – Helps tailor the content through a variety of mediums (e.g. video, blogs, etc.)

5 Reasons Why First-Party Data Is Important

Despite privacy laws and third-party cookies being canceled, many businesses are making use of first-party data instead. What makes first-party data so important? Let’s dive a little deeper into how it could be helpful for your business this year.

1.   It reduces the cost of gathering consumer data.

What company doesn’t want to save money when it comes to their expenditures? One of the main reasons why first-party data is so important is due to the reduction in business costs.

As it’s a free type of data collection, aside from the tools you use to collect the data holding a small charge, it’s an affordable option for all businesses to utilize.

With third-party data, in comparison, you’re likely to spend anything from a few dollars to much more depending on the type of data you require. While first-party data takes a bit more effort to retrieve, it’s a worthwhile investment of time.

2.   Helps to optimize marketing efforts.

Every marketing decision your business makes is essential to your company’s progress. In a survey conducted with 85 small business owners and marketers, it found 52% were spending anywhere between $5-$15,000 per month on marketing.

Every single dollar you spend should result in a high ROI. When you prioritize first-party data, you’re empowering your marketing efforts. Not only will it optimize your marketing approach but it should also result in a better outcome across all your marketing campaigns.

3.   Personalizes the customer experience.

Personalization is a hot trend for marketers currently and as customers demand more from the money they spend, customization of their experience is highly effective.

Detailed data sets you retrieve from first-party data are just what you need to help personalize each and every customer’s experience with your brand. That improves the rate of customer satisfaction and their likelihood of sticking around to buy from you again.

4.   Ensures company compliance with data privacy restrictions.

As it’s already been mentioned, staying compliant with all relevant data privacy restrictions is going to be beneficial for your business. Not only does it protect your reputation and your finances but it also encourages trust from your customers that you’re keeping their data safe.

With third-party cookies no longer being unavailable with most browsers, it’s worth paying more attention to your first-party data access instead.

5.   Improves quality and reliability of customer data

Finally, the reliability of quality you achieve with first-party data is perhaps some of the best among all different data types. While third-party data may be useful to some, it’s not as accurate as first or second-party data will be.

Therefore, it’s necessary to embrace first-party data to help cater to your customers with more accuracy and insight. This will only improve the user’s experience further, which is important when it comes to improving the rate of lead conversions.

Maximize Your Usage of First-Party Data in 2023

If you haven’t already, the use of first-party data is essential for your business. With that being said, take a look at what first-party data you’re gathering for your business this year and utilize this data type to improve business success in 2023.

30-slide PowerPoint presentation
Unleashing the Potential of Enterprise Data Management: Navigating the Data Deluge In today's fast-paced digital landscape, enterprises are witnessing an unprecedented surge in data generation year after year. As reported by Grand View Research, the data management solutions market attained a [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on Data Governance and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources

Excel workbook
Save time, empower your teams and effectively upgrade your processes with access to this practical Enterprise Data Governance Toolkit and guide. Address common challenges with best-practice templates, step-by-step work plans and maturity diagnostics for any Enterprise Data Governance related [read more]

38-slide PowerPoint presentation
21-slide PowerPoint presentation

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.

Complimentary Business Training Guides

Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function






The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.

Connect with Flevy:


About Flevy.com   /   Terms   /   Privacy Policy
© . Flevy LLC. All Rights Reserved.