Why First-Party Data Should Lead Your Email Segmentation Strategy

By Jenna Chateauvert

Posted August 2021

As an email marketer, I’ve come full circle with first-party data.

There was a time, many years ago, when first-party data was all marketers had to work with in order to better target their audiences - to speak to them with a certain level of relevancy and sophistication. Since then, the landscape of ecommerce has forced us to make some interim resource shifts that may have distracted us from this valuable goldmine of insights.

I was fortunate to land my first ‘dot-com’ job at Walmart, only a few years after the early 2000s dot-com bubble bust. I say fortunate because Walmart.com was one of just a handful of blue chip retailers who truly valued their first-party data even before the world wide web existed. They were a pioneer in knowing their customers - aka personas in the brick-and-mortar world. That culture spilled over to the ecommerce portion of the business as well, which is where my engagement marketing foundation began.

Looking back, I can say with confidence that in that very first entry level job, I had access to some of the best resources of my career - dedicated engineers. Every week, I had the privilege of sitting with my extended engineering team to review the emails of the week and to make data requests. 

At that time, third-party data was not a thing, so first-party was what we leveraged.

This data usage would be looking at the general behavior of users in order to pull an email list that could solve that user’s needs.

For example, during the holiday season, I noticed lots of clicks in the website taxonomy of Walmart.com for ‘Shop Toys by Age’, yet it was buried so far below the fold. This meant that users were scrolling down, finding those age ranges in tiny font, on the lower left side of the site, and clicking - a lot of effort! Using that insight, we tested an email that featured the ‘Shop by Age’ function during the holiday season. Our targeted list included folks who we noticed were shopping in the Toys section recently and primarily. We pulled the list and sent the dedicated ‘Shop by Age’ email. It resulted in one of the highest engagement and conversion levels I had seen (and remains a featured Toy category on the website to this day).

We also launched a ‘Cold Weather’ email that targeted users by location in early Fall with promotions around space heaters and electric blankets. As regional temperatures began to drop, the emails would launch - another success.

The most important element of these long-time-ago examples is that they both used first-party data . . .sure, maybe not as exciting or sleek as third-party or AI/machine learning, but I am sure it is even more valuable.

Here’s why.

As the online and tech world evolved, new factors began to change the ecommerce landscape.

First, the influx of increasingly advanced technology and ecommerce ideas brought about an insatiable need for more engineers everywhere, resulting in an engineering ecommerce shortage.

Second, the introduction of full service ESPs (email service providers) - platforms that were dedicated to delivering your consumer emails for you - became general requirements to ensure inbox delivery.

Beyond the benefits of worry-free deliverability, the platforms provided additional key benefits such as drag and drop creative html email templates and list segmentation. However, if the data wasn’t included in initial ESP database setup (ie. new website features and consumer interactions), necessary updates generally required special engineer requests to add new data to enable potential targeting.

The end result was a serious scarcity of tech resources for marketers to tap into, and a need for a new solution that could help marketers continue to gain fresh and new user level data. 

Enter third-party data.

What a dream, we thought! Now, fresh user data could be added to the database with an endless (and often overwhelming and irrelevant) list of segmentation options that could simply be paid for. Everything from household income to whether or not someone bought mustard at the store last week was possible. And of course, there was a cost with obtaining that data. Sometimes the cost was just that - a set dollar amount in the form of an invoice that you paid (my preference). Other times, the cost was more complicated - an exchange of first-party data for outside third-party data you could then target from.

More recently, while working in the real estate industry, my team discovered a way to test our own first-party data within the emails themselves with the use of tagged newsletter content.

To validate this strategy, we chose a key segment (in this case, homeowners) that was available from our third-party service, and compared it with our own behavior-based signals for that same segment. Fortunately, because we were using email, we were able to identify the result was an astounding 9x lift over our acquired third-party data.

Our first-party data had users 9 times more likely to engage with the email, which ultimately led to increased conversion as well. It wasn’t the lift that surprised me - I expected that. Rather, it was the extremity of that lift - and the fact that we had been paying good money for something that we had better internal signals for all along. 

That may have been the beginning of the broader business realizing the value of first-party data for retention marketing channels (such as email, app, and SMS).

Since then, steps have been taken to provide that team with the dedicated resources needed in order to keep the engagement engine dialed in - mainly dedicated engineers and analysts. I know it sounds like common sense, but more companies struggle with gaining those precious resources than we’d like to admit, given the history and ongoing engineer scarcity.

The most beautiful part is that first-party data is something we all have. It’s just a matter of reprioritizing resources in order to chip away at that abandoned mine of first-party data. In my mind, first-party data is more than an achievable way to solve customer needs - it is the gold standard.