Segment CDP Week Report: First Party Data Strategy

Google and Apple are set to make dramatic changes to the customer data landscape, are you ready? This was the question driving our valued partner Segment’s CDP Week, a recent conference for industry leaders and analysts in the customer data community. 

Talon.One's Senior US Partner Manager Zach Ettelman found Segment's recent CDP week event an invaluable source of information about the future of marketing. Here he discusses one conversation in particular that he feels is crucial to the future of promotions.

The speakers and discussions during CDP Week focused on customer data trends, potential data challenges, real-life stories, and what it takes to become a successful customer-first company in 2022. Though the conference is over, you can still view all of the talks by signing up on their site. 

Segment is a customer data platform (CDP), designed to collect, clean, and control your customer data. It allows businesses to unify customer data from every customer touchpoint. Segment thrives on the microservices-based approach that is also central to Talon.One. That’s why we’re proud to call Segment a Talon.One partner and have created a special integration for customers to get the most out of both platforms. Check out our video walkthrough of the integration here.

Every talk during Segment CDP Week was packed with insight. In particular, a fireside chat with Katrina Wong, Segment’s VP of Marketing, and Joyce Kim, Twilio’s new Chief Marketing Officer, really grabbed my attention. It highlighted a fundamental change to marketing strategy coming in the very near future, one many companies have not even begun to address. 

Customers are more aware of security and privacy than ever before. They need to feel confident a company is treating their data with respect and care, especially as more businesses shift to the cloud. As this awareness grows, the industry has seen more pressure from governments for greater data restrictions. While GDPR had a massive impact on how companies can market effectively, the next big change will be even more fundamental.

Third-party cookies track user activity across websites and are commonly used to serve ads to customers based on recent searches and web activity. They have long been a key component of web advertising and customer data gathering while also being a subject of controversy when it comes to customer privacy concerns. Following the lead of browsers like Safari and Firefox, Google Chrome is set to no longer allow the placement of third-party cookies. This change was originally set to happen in 2023 but has recently been pushed back to 2024. That’s still not a lot of time.

It’s hard to overstate the effect this will have on how businesses gather data about their customers. Despite this, many businesses simply aren’t prepared for this seismic shift. In fact, “81% of companies say they have either complete or substantial dependence on [third-party cookies], and that they would be seriously harmed by losing access.”

If you haven’t already begun, the time to plan for first-party data collection is now. Many businesses, especially retailers and banks, are doubling down on D2C (Direct-to-consumer) relationships, creating initiatives like loyalty programs that incorporate hyper-personalization as an authentic way to collect first-party data. Customers’ sensitivity around data collection will not end once third-party cookies are phased out. Twilio’s recent State of Customer Engagement Report showed that while ”95% of B2C companies believe customers trust them with their data, only 65% of customers actually do”. Leveraging customer data to give greater personalization and loyalty rewards benefits both businesses and consumers, feeling much more like a fair exchange.

After outlining the serious effect of losing third-party cookies, Joyce and Katrina ran through some examples of companies that are getting first-party data right. These examples go far beyond simply preparing for the end of third-party cookies, each company has seen massive benefits from consolidating and activating its customer data. 

Allergan is a pharmaceutical company, best known for Botox. Previously they had distribution through doctors and pharmacies. As the reality of the end of third-party cookies hit, Allergan knew they had to transition to direct-to-customer selling. To do this, Allergan created a loyalty program focused equally on attracting new customers and customer retention, an essential consideration when building a long-term loyalty program.. This gave them a new way to engage with customers directly thus developing their relationship with their customers while also learning more about them. 

This was only the first step, Allergan also had to build an entirely new data structure so this data could be used effectively. This was a serious undertaking, involving data ingestion from a minimum of 12 different channels. Once data from all channels was cleaned and structured, Allergan chose Segment as the customer data platform they used to build a single source of truth for each customer and activate the data they had gathered.

The results speak for themselves. In just one year, Allergan had increased its revenue by $400m and, even more impressively for the long term, reduced customer acquisition cost by 40%. There are huge wins for companies that focus on first part data and, crucially, invest in the tools to activate that data effectively. 

Vacasa is a leading vacation rental company. They have a large marketing presence across web, email, and other channels (SMS, live chat, call center). Similarly, they had an equally diverse number of support channels. Initially, Vacasa took the still-common approach of effectively siloing all of these channels of communication. With no shared, single point of truth, Vacasa wasn’t effectively leveraging the data they were collecting about a customer: purchase history wasn’t factored into support calls, cart abandonment wasn’t considered when including them in the next campaign, etc. To combat this lost opportunity, Vacasa pivoted to an omnichannel approach to customer communication. 

Vacasa used Segment to create a holistic view of each customer, gathering all their data about them in one place. Now they have a complete overview of the customer’s journey and every data point about a customer can be leveraged to improve their Vacasa experience. By stitching together so many data points, like support calls, cart abandonment and wishlists, Vacasa provides an omnichannel experience, recommending the right product to the right customer in real-time. 

The fireside chat also discussed a Twilio and Segment customer which is one of the world’s largest athletic and footwear brands. In 2019, in response to the growing consumer privacy concerns, they met the challenge head-on and completely eliminated third-party tracking and cookies on their websites. After taking this step, activating data on their ad platform became a lot more difficult. In the beginning, they were actually making $1m loss per week when it came to acquisition marketing. 

To combat this, the brand focused on creating an even more compelling and wide-ranging customer experience. They created a network of mobile apps where customers could engage with different aspects of streetwear and athletic footwear through branding platforms. Customers could talk about sneaker drops in real-time, often with celebrity brand ambassadors, or even get personalized apparel from virtual expert 

Focusing on the omnichannel approach gave the brand a huge amount of customer data to work with. Loyalty membership grew to over 300 million members, a 60% YOY (year-over-ear), and recouping the million-dollar loss per week. 

Now you know how much is going to change and how some companies are already prepared for our new marketing reality, what next? Joyce and Katrina highlighted three key considerations to take into account when creating an effective first-party data strategy.

Create a compelling customer experience, like a loyalty program tailored specifically to that brand, to be able to collect the customer data in a meaningful way. Customers are much more likely to provide their data if it is being used in a way that also benefits them. The benefits of a new channel like a loyalty program don’t stop at simply collecting data. Once you have customer consent to gather their data, you can focus on direct-relationship building through this new channel. Businesses can build a holistic reward ecosystem by activating customer data and leveraging it to give them more compelling, personalized loyalty rewards. This will greatly increase customer retention.

Throughout the fireside chat, it was clear that one point, in particular, was crucial to developing an effective first-party data strategy. Companies must invest in tech and infrastructure that helps with the collection, management, reconciliation, and activation of that data. Simply gathering data is no longer enough. Data also has to be organized in a way that both makes sense and is useful to the business.

Though coming from very different disciplines, both data science and marketing teams need to be on the same page, focused on what data will help them build a better understanding of their customers and how this understanding can be leveraged. Effective interdepartmental communication is key to a powerful first-party data infrastructure. When all departments are in sync, a true picture of what’s possible will emerge. 

Segment is a customer data platform (CDP), designed to collect, clean, and control your customer data. It allows businesses to unify customer data from every customer touchpoint. This opens up a new world of insight for marketing, sales, and customer service leaders who can then harness that knowledge to create innovative, data-driven customer engagement.

We’re proud to call Segment a partner. Talon.One and Segment make a powerful combination so we have recently released a specially-designed integration that makes it even easier to get the most out of both platforms. Combining the flexibility and automation of our Promotion Engine with the unified customer data available in Segment allows for the creation of adaptable, innovative promotions.

Now any Talon.One promotion campaign can incorporate any user data collected by Segment. The dynamic, real-time audiences created within Segment can now also be imported by Talon.One. Any custom attributes created in Talon.One will be available automatically in Segment and any action performed will immediately added to Segment’s user record. 

Talon.One’s deep personalization options are extremely powerful when combined with Segment’s comprehensive customer profiles. According to McKinsey, 71% of consumers expect companies to provide personalized experiences. Our Segment integration now means it’s possible to build rewards around every single customer touchpoint.

Why not check out more information about our Segment integration and book a demo today to see how Talon.One and Segment can help you leverage first-party data to create memorable, engaging promotions.