Customer Data, Industry Trends

First-Party Identity Resolution: What It Is & Why It's Important

Customer Data, Industry Trends | June 10, 2021

Today’s consumer moves between multiple devices and channels all day long. They start their day on their mobile, then switch to a tablet on the commute, then a laptop or desktop in the office, and maybe a connected TV at the end of the day. They visit your website, your app, your store, and reach out to your customer service team on chat. In fact, the number of touchpoints customers have with their favorite brands has exploded in the last decade. A study from Deloitte found that the average household has eleven connected devices, including seven different screens. And your brand is likely collecting first-party customer data at each point.

So, how do you make sure that you recognize the same consumer across multiple devices and channels, instead of treating them as five different people? How do you get a clear understanding of your customers on an individual level, as well as real-time knowledge of exactly where they are on the customer journey? The answer is identity resolution.

It may sound technical and complicated, but with the right technology identity resolution can be easily carried out. To help those unfamiliar with identity resolution better understand it, here's a crash course on what it is, why it's so important in modern marketing, and how the process works.

What is first-party identity resolution?

As we’ve covered previously, Google is following Apple and Mozilla and phasing out support for third-party cookies this year. This means that marketers must start gearing-up to rely on their own first-party data (like customer demographics, behavior on websites and apps, purchase history, and interests, collected from their brand’s customer touchpoints) for their marketing efforts, instead of third-party data. In fact, 60% of marketers said that their organization plans to increase spending/emphasis on use of first-party data this year, according to a survey by the Interactive Advertising Bureau.

So, you’re collecting first-party data from your customers. Now what? Well, you need a way to connect multiple identifiers across different devices and channels, enabling each of these different data points to be associated with a single individual customer. In other words, you need a way to connect the dots between the various touchpoints visited by a customer to build a unified view of that customer’s engagement with your brand.

This is what identity resolution is all about. By resolving individual customer profiles collected across your data silos, you can build that unified customer view (also known as a single view of the customer or a 360-degree view of the customer) to really understand the demographic and behavioral attributes that make up each customer’s profile. This then ensures you’re not wasting time and dollars targeting a customer who has already converted, for example.

This focus on first-party identity resolution is here to stay. One study by the Winterberry Group found that marketers in the US expect to collectively spend $2.6 billion on identity resolution programs and technologies by 2022, a 188% increase over the past four years. This investment clearly underscores the key role identity resolution will play in best-practice marketing initiatives going forward.

How does first-party identity resolution work?

Across a consumer’s journey, one or many personal identifiers may be associated with an individual. Examples include: an email address, a phone number, an account username, a device ID, a customer ID, or a loyalty number. Identity resolution technologies work with these identifiers to connect them to a customer profile that includes them and other related data (such as browsing activity or purchase history). In this way, disparate customer data is unified to form a single, all-encompassing record for each customer. This allows you to craft personal and relevant brand interactions at significant moments in your customer’s journey.

To accomplish all this, it’s critical that your organization have two things:

  • Systems in place to capture high quality, customer data across all your marketing channels and customer touchpoints
  • Technology to consolidate and aggregate the data from these systems, cleanse it, deduplicate it, and match it to create a single, unified customer record

The first is relatively straightforward: these are the systems you likely already have in place (a CRM, DMP, marketing automation, etc.) to help you execute your marketing strategy and do data management. The second is where things become a bit more technical, although this is the “meat and potatoes” of what identity resolution is all about. Though there are standalone identity resolution tools available on the market, the best technology for jointly managing customer data and performing identity resolution is the customer data platform (CDP).

CDPs are designed to integrate with your existing MarTech systems and ingest, consolidate, optimize, and store all of your customer data records in one centralized location, which is a critical step in the identity resolution process known as data onboarding. Because CDPs constantly aggregate all this data in one place in near real-time, marketers never have to worry about outdated records affecting the identity resolution process, they're the ideal tool for which to carry the process out.

With all your customer data and profiles in one place (whether using a CDP or not), the data matching aspect of the identity resolution process can begin. There are two methods in which identity matching is conducted: deterministic matching and probabilistic matching. Deterministic matching involves the use of unique PII identifiers (in other words, first-party data) to create a single customer record. Probabilistic matching involves the use of predictive algorithms (i.e., machine learning) and statistical weighting to determine the likelihood that separate customer profiles actually belong to one identity.

While both of these matching methodologies share a common goal of helping marketers identity your customers, if you absolutely had to choose the one that would provide the most value to your marketing efforts the edge goes to probabilistic matching. The reason for this is that probabilistic matching allows you to analyze much wider sets of data because it is not constrained to only first-party data with known identifiers. Being able to use both first- and third-party data in the process increases the likelihood of accurately matching records and profiles, and also provides a more in-depth understanding of the customer.

It’s important to note the identity resolution process cannot be a one-time occurrence. Today’s digitally-focused customer journey allows for interactions with new customers (and existing ones) that take place at any time on many channels and devices, and as such your organization is (or should be) constantly collecting new customer data. If not updated continually, you’ll have a customer record that’s inaccurate and out-of-date. So, like a one-way trip around a circle, the identify resolution process never stops.

Why is first-party identity resolution so important?

Knowing who a customer is across multiple devices and where they are in their unique customer journey allows brands to deliver more timely and personalized messaging, which in turn improves the customer experience and delivers improved profitability. Let’s face it: consumers today value shopping experiences that lead to faster, simpler and more convenient customer journeys. Identity resolution allows brands to stay current on each customer’s journey so they can do things such as recognizing that a customer has already purchased a product and thus remove them from retargeting ads or provide a related offer, or even send an abandoned cart reminder to urge the customer to complete a purchase, to name a few examples.

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The reality is that most marketers are using multiple technologies for first-party data collection and storage. As a result, customer data is strewn across different platforms, tools, and systems, each with its own data collection methods and data types. This leaves brands with fragmented slices of customer behavior, both online and offline, and limits the ability to connect with customers at the right time, in the right place, with the right content.

Understanding what customers truly want and knowing where they are in their customer journey plays a major role in designing positive shopping experiences. Armed with a comprehensive first-party identity resolution strategy, marketers are able to deliver the experiences that customers want.

The takeaway

To recap, identity resolution is the process of attributing first-party data such as customer behavior, history and demographics -- collected across all of your touchpoints, platforms, and channels -- to a single unified customer profile. This then allows you to provide a consistent, relevant customer experience wherever your customers choose to interact with your brand, thereby increasing your marketing effectiveness. It’s a win-win -- when you have the right technology in place to ensure an accurate and smooth process.

One of the foundational functionalities of a CDP is a persistent and consistent view of the customer, created by resolving and managing customer identities. In this way, a CDP with advanced identity resolution and machine learning capabilities, such as the one offered by QuickPivot, is one of the best technologies to add to your MarTech stack to help you carry out first-party identity resolution. If you are interested in finding out how a CDP can help with your brand’s first-party identity resolution, get in touch with us today and learn how QuickPivot can help you unlock the full potential of your first-party data.

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