Through first-party data, companies can take a product-led approach for their business to effectively leverage behavioral data while keeping evolving data privacy obligations core to their strategy.
The future is clear – digital products are here to stay. With the explosion of digital products, it’s no surprise that consumer behavior has shifted.
Now more than ever, consumers want personalized, seamless customer experiences with brands they can trust. There’s been a lot of talk about COVID-19 accelerating digital expectations, but the same is true of the desire for brand trust and accountability. According to Mastercard, 74% of consumers are more likely to buy from brands that demonstrated concern and provided excellent care for customers during the pandemic. This is evident across industries; for example, in a Qualtrics survey on the banking and financial services industry in APAC, 69% of consumers said it was important that their provider not just captures ongoing feedback from them, but acts on it as well. Almost half of all consumers also said it was unlikely they would purchase from a company in the future if they fail to respond to their feedback.
The challenge is that most companies are operating blindly right now. They do not have insights into how customers are using their products or if the product investments they’re making are worth the spend. They rely on legacy web analytics tools that only provide surface-level data about clicks and page views, which is not enough to understand today’s complex and diverse user journeys. And it certainly isn’t enough to make strategic product decisions that build customer trust.
Instead, companies need in-depth and first-party product data. Armed with this information, businesses are able to improve, mold, and adapt their products to provide the personalized and consistent experiences their customers are looking for. Through first-party data, companies can take a product-led approach for their business to effectively leverage behavioral data while keeping evolving data privacy obligations core to their strategy.
Building your business around products
So, what does it mean to be product-led? In this day and age, a business’ product is its main revenue driver. For starters, becoming a product-led business means breaking down inefficient silos between the ‘business’ and the ‘product,’ starting from the highest level of an organization – the executive team.
Next, just as a business would treat its physical products with great care and attention, it should also place its digital product at the heart of its business strategy. This approach will ultimately build user trust, create loyal customers, and drive accelerated growth.
Turning product data into a springboard for growth
With digital products at the center of every business, the value of deep, behavioral insights cannot be ignored. After all, user engagement is the top indicator of a digital product’s long-term success, followed closely by customer retention and customer lifetime value. By analyzing what customers find valuable, a business is better-placed to make decisions that will drive its success, and deliver game-changing product strategies that meet the needs of their customers. Glints is a prime example of this. The talent recruitment and career discovery platform used their first-party product data to understand their users’ journeys and ultimately improve their product to drive growth and retention.
Luckily for most businesses, there is already a wealth of such data available. With the right tools, product, marketing, and customer success teams alike can access product data to gain a deeper understanding of customers’ journeys, without requiring any third-party sources, which have come under scrutiny recently. Product data can answer key questions about the customer journey, giving insights into customer preferences, retention, and churn. Customers are telling you a lot just by how they use your product, and behavioral analytics gives you the opportunity to tap into this wealth of information.
More importantly, it’s crucial to ensure that the right data is available in the right places, for the right people. When different teams leverage different data, it often leads to inefficiencies and misalignment. But with, for example, a single organization-wide data management platform, different teams can act on a single, common source of truth to make crucial data-driven decisions that resonate across the whole business. A more efficient approach such as this will be key to drive impactful business outcomes, especially in the current economic downturn, where businesses are more mindful of marketing spend.
Put first-party data first
Aside from having easy access to nuanced, actionable customer insights, tapping on product data means businesses are better-placed to abide by data privacy laws – something not as easily done when relying on third-party data alone. Third-party tracking is ubiquitous; it gives marketers the ability to analyze customers’ digital location and path, in order to better understand their online behavior. However, third-party data comes with risks — from data-quality issues, to security and privacy concerns, to regulatory considerations. And with Google, Apple, and other tech giants removing support for third-party cookies, marketers will have a difficult time building a holistic view of the customer if they continue to depend on third-party data.
Instead, by leaning on product data, organizations are not only employing best practices for data privacy, but can also start to build a long-term picture of their customer. This, in turn, can strengthen their direct relationship with the customer. At key moments along the customer journey — whether an account creation, a purchase, or a subscription sign-up — users share vital information about themselves, but they trust that the company will protect it and use it responsibly. Over time, as customers regularly engage with their preferred brands, these businesses start to learn more about their customers. And as they learn more, they’re better able to turn these insights into improvements to the customer’s experience.
Starting the product-led transformation
Transitioning to a product-led, privacy-driven data approach is not always an easy task, especially for organizations that have long built a dependence on alternatives such as third-party data. That said, businesses who are willing to make the change will gain from the immense value of product data, especially its powerful ability to provide businesses with a deep understanding of customer behavior all the way down to the individual level – a drastic leap forward compared to third-party data, which focuses on ad-centric goals and demographic data.
Reorganizing a business around its product may require major changes when it comes to business priorities, team responsibilities, and strategic planning. But after companies have spent millions on digital transformation to create best-in-class digital experiences, leveraging insights from those products will provide the optimal return on investment. With a product-led approach, organizations can bring analytics to the forefront of their product and marketing efforts, allowing them to focus on outcomes instead of outputs, while maintaining privacy obligations. The best of both worlds can be achieved, with seamless, joyful, and meaningful customer journeys in tandem.