Accurate data is key to understanding your target audience and making informed business decisions that appeal to customer wants and needs. However, the quality of your data greatly depends on the type of data and the collection methods employed. Below, we delve into this topic in greater detail, illustrating how first-party data is the secret ingredient to a winning marketing strategy.
What is data collection?
Data collection is the process of aggregating quantitative and qualitative data regarding a specific topic. In the case of market research, data collection is centered around consumer thoughts, opinions, and behavior. This information is used by company executives to make key business decisions, such as whether or not to launch a new product or how to best appeal to segmented markets.
Market researchers employ various methods to collect this data. They may, for example, survey consumers directly to learn more about how brand awareness has evolved over time. Or, a market researcher may choose to analyze social media data aggregated and sold by a third-party to better understand what appeals to millennial consumers.
Types of data collected
Data is integral to understanding your target audience and making informed business decisions. However, not all data is created equal. As a market researcher, there are three types of data at your disposal and each vary significantly in quality.
First-party data is quantitative and qualitative information a company collects directly from its target audience. Your business may, for example, conduct a brand awareness survey using an online panel. Your business may also glean insight from a customer’s purchase history.
Other examples of first-party data include:
- Customer demographics
- Sales interactions
- Website activity
- Mobile app data
- Email engagement
First-party data is considered superior to second- and third-party data because it reflects the interests, sentiments, and behaviors of the people who matter most: your customers. As a result, executives can confidently use this information to:
- Improve the customer buying experience
- Develop new products
- Break into new markets
- Understand customer lifecycles
Despite these advantages, collecting first-party data can be time-consuming for brands to tackle on their own. That’s where the Kantar Profiles Audience Network comes in. As a leader in market research, we simplify primary data collection by connecting companies with more than 170 million compliant panelists across the world.
Comparatively, second-party data is information that brands do not collect themselves. Instead, they leverage or purchase the data from a trusted partner, typically a company with a vested interest in the respective audience. For example, a hotel booking website may purchase data from a car rental company. Or, a shoe designer may purchase data from a fashion publisher.
Much like first-party data, this information can provide valuable insights into your target audience. Second-party data can also be combined with first-party data to better understand consumers and strengthen predictive models.
Lastly, third-party data is information garnered from a business or organization without a direct connection to your target audience. This data is normally compiled from multiple sources (e.g., governmental, academic, nonprofit) and made available on a digital marketplace.
The key advantages of third-party data are breadth of data and cost; companies are afforded access to large amounts of data that would be financially challenging to obtain through other means.
Third-party data may also offer a breadth of data that may not otherwise be accessed as broadly through first-party data collection; for example, first-party purchase transactions may only cover a brand’s purchases through their retail or e-commerce outlets, while third-party compiled purchase data may offer insight into competitive brands and categories or retailers where shoppers are purchasing, which may offer deeper insight to inform brand marketing strategies.
Methods for data collection
How data is collected depends on the type of information being gathered. If your company hopes to collect first-party data, then you will employ primary data collection methods like in-person interviews and panel surveys. Otherwise, your company should expect to use secondary data collection methods such as observation and transactional tracking.
Primary data collection
Primary data collection is the process of collecting data from a first-hand source. This process may involve various data collection methods, including panel surveys, in-person interviews, focus groups, and forms.
A panel survey is a study used to gauge ever-evolving consumer opinions and behaviours.
The goal of panel surveys varies. However, the primary goal of longitudinal studies is to collect information that reflects how the target population’s attitudes evolve over time. Similarly, a company may use a panel survey to evaluate how customer opinions about prices have changed.
The quantitative and qualitative information gleaned from this process illustrates consumer attitudes. A market researcher may, for example, be able to determine if brand awareness is increasing or decreasing. Or, if changes to company policy are bolstering customer satisfaction.
A mainstay of market research, in-person interviews require that panelists physically arrive at a location. A market researcher then asks a series of questions, which are answered verbally.
There are valuable benefits to in-person interviews. Namely, the market researcher can answer any questions the panelists may have. Comparatively, if an individual becomes confused while taking an online survey, they may either offer a disingenuous answer or abandon the questionnaire altogether.
However, in-person interviews are onerous and expensive to orchestrate. Panelists may also feel less inclined to answer sensitive questions (e.g., ‘What is your annual salary’) honestly.
A focus group is a data collection method that brings together a small group of consumers. At the prompting of a moderator, group members share their thoughts and opinions on a specific topic.
This data collection method allows participants to express themselves and elaborate on their answers in a way that online questionnaires don’t allow. Because of this, market researchers are afforded richer, more meaningful qualitative data.
There are disadvantages, however. Some participants may not feel comfortable sharing information in a group setting, for instance. The qualitative data gleaned from focus groups can also be very difficult to analyze.
A form is simply a short questionnaire that a consumer completes, typically online. A form may request contact information, such as the consumer’s email address and phone number. It may also request demographic information.
Forms are fairly straightforward and cost-effective. If properly designed, these market research tools yield high-quality data that can be used to make informed business decisions.
Nevertheless, forms only capture a limited amount of information. Ergo, the data yielded may be one-dimensional compared to panel surveys, which aim to understand consumer opinions and how they evolve over time.
Secondary data collection
Unlike with primary data collection, secondary data collection does not require direct interaction with your target audience. Instead, this process involves aggregating data that is already available using methods such as transactional tracking, observation, online tracking, social media monitoring, and data review.
Transactional tracking refers to the act of monitoring and recording each time a customer makes a purchase. A company may purchase second-party transactional data from a partner to better understand what motivates consumer buying behavior.
In a traditional observation study, a market researcher (i.e., an observer) scrutinizes people in a specific situation. However, observation studies can also be automated. For example, a website analysis tool may track how many product pages a customer visits before making a purchase.
Online tracking is the practice of using tracking cookies to monitor a user’s online activity such as clicks, device specifications, location, and search history. Since this data can offer invaluable insights into consumer behaviors, third-party affiliate networks typically sell or share this information for marketing purposes.
Social media monitoring
Similarly, social media platforms such as Facebook and Instagram sell user data (e.g., browsing history, privacy settings, duration and frequency of activity) to third-party companies. These third-party companies act as middlemen, aggregating the data before reselling it to consumer companies.
Data review, or cleansing, is an integral step in secondary data collection. During this process, data is pulled from a second- or third-party dataset and then reviewed for duplicates, incomplete or incorrectly formatted data points, and other errors.
Importance of first-party data collection
Collecting high-quality first-party data is key to your company appealing to customers and securing a competitive edge. Why? Because first-party data affords accurate and relevant insight into the consumer psyche. Using this information, your C-suite can make confident choices about everything from adjusting pricing to launching a new product.
Start collecting first-party data with Kantar
Collecting high-quality first-party data that offers insight into your target market isn’t complicated when you partner with Kantar. In a world where the accuracy and reliability of second and third-party sources are diminishing, we assist companies with all steps of the market research process, including survey design, data collection, and data visualization.
Want to know more? Speak to our award-winning market research team to learn how we deliver data from online research panels and sources you can act with, quickly.