Where does data come from?
To drive revenue efficiently, use a combination of company intelligence data and buyer intent data to prioritize prospects based on both their firmographic fit and their likelihood to buy.
Fit and intent data comes from three types of sources:
- Collect it (first-party sources)
- Buy it (third-party sources)
- Trade it (second-party sources)
These three data sources have pros, cons, and gaps, but when combined in a data foundation, they tend to complement one another to create a well-rounded picture of leads and customers as a basis for revenue-driven marketing.
First-party data is collected directly from your audience, via your own channels. One type is submitted information, when people directly share with you who they are and what they need (for example, when filling out a form). Another type is behavioral data, a passive observation of prospects’ activities on your properties.
Most companies have many different tools and customer touchpoints that generate first-party data.
First-party data is useful and necessary in some scenarios, but in other situations it’s best supplemented by third-party data, or even replaced by it. Let’s look at some of its benefits and limitations.
First-party data may provide information that can’t be purchased anywhere else. This makes first-party data helpful when you need to understand the nuance of a customer’s needs, or any data point that’s not available for purchase from a third party.
For example, you can ask questions like “What do you plan to use our tool for?” in an onboarding survey. The lead could select “marketing,” “engineering,” or “sales,” and you can show them a relevant onboarding experience based on their answer.
You don’t need to purchase first-party data from a provider. Technically this saves you money; however, it’s not entirely free. You need to pay for the time and brainpower it takes to set up tools for effective data collection and to make first-party data useful for marketing. For example, you could set up an analytics system to capture website behavior — though Clearbit Reveal and the free Website Visitor Report make that easy. Just install a little script.
Errors and data decay
First-party data can be error prone, because people often make mistakes when they fill out lead forms — some people even intentionally enter incorrect information to protect their privacy or get through the form faster. Because of this, some Clearbit customers choose to overwrite human entries with Clearbit data in their systems after a lead fills out a form (e.g., with Clearbit Enrichment for Hubspot).
First-party data also decays. If someone tells you they’re a marketing manager in a form but then changes their position to marketing director, you’ll never know. Third-party data like Clearbit updates with these changes automatically.
Effect on conversion rates
The mere act of collecting first-party data can drag down conversion rates because in some cases, the more fields there are in a form, the lower the conversions. Many companies shorten or autofill forms with Clearbit so that they can get data from a third-party source instead of asking leads for it.
First-party data only gives you information about prospects who are already engaging on your properties. If you want data about unknown, unengaged prospects in your total addressable market (TAM), then third-party or second-party data will help fill in the picture.
Pros and cons aside, what we’ve found is that the SaaS companies we work with are often sitting on a gold mine of first-party data that they don’t actively use for targeting and personalization.
To take advantage of that opportunity and make your first-party data more useful, make sure you have a data foundation in place, which combines all data from your sales and marketing tools, as well as third-party data. Once it’s combined, it can flow back into other apps. For example, your first-party data from a customer-facing app like Zendesk can flow into a data foundation and then feed into a lead scoring tool, like MadKudu, to influence your company’s lead scoring model.
Third-party data is collected by outside entities or organizations that don't have a direct relationship with your audience.
This type of data is typically purchased from for-profit companies or accessed from publicly available sources.
Third-party data has strengths and weaknesses that often complement first-party data.
View of TAM
It can provide a view of your total addressable market (TAM), giving you information on net-new, unknown, unengaged companies to go after in acquisition campaigns.
It provides accuracy by eliminating human error in form fills and by refreshing data immediately when a change is detected in a company’s firmographic profile or an employee’s job title.
Clearbit provides 100+ firmographic and employee-level data points, but like with any data source, it doesn’t account for every nuanced situation. For example, if you create software to help startups with their pitch decks, you can ask Clearbit how much funding a startup has raised to date. But you can’t ask whether the startup plans to raise more funding next year — you’ll need to talk to the founder for that.
Cost and setup considerations
Third-party data comes with a cash cost, and you’ll need to think about how to integrate it into your systems and who will do that work (e.g., plugging it in with a simple Salesforce integration, or doing a more custom integration into your CDP with APIs.)
Once your integrations are set up, third-party data can be the thread that connects all your sales and marketing tools, so that they’re working off the same information about leads and prospects.
Second-party data is first-party data that’s collected by an organization and then shared with a trusted partner.
To get second-party data, a good place to start is to think about partnerships you already have — or start new ones.
Because second-party data is information you receive from a partner, it can technically be made of a mix of first-party and third-party data (and all the pros and cons that go along with that). If you’re thinking of creating a partnership to share data, considerations include brand compatibility, legal contracts, defining roles and responsibilities between two teams, and what tools will help with data transfer.
Combining data sources for driving efficient growth
Rolling out the red carpet for your best prospects requires the right mix of data to power your tools and marketing touchpoints. Most companies use a combination of first- and third-party data to achieve this, as well as second-party data from their partners.
This creates a data foundation that includes both company intelligence data and intent data. For example, Clearbit’s intent solutions, such as Reveal and Capture, are complemented by Enrichment for an instant, deep infusion of background information on a company.
When you have measures of fit and intent built into your systems, you’ll always know who your best prospects are, what they’re interested in, and how you can step in to help them.