Sometimes the best parties are small. No one wants a Cambridge Analytica-level data scandal so we spend a lot of time in the pursuit of good data. So what if, instead of questionable third-party data or unpopular first-party sources, you and your top partners simply shared? Known as second-party data, data swaps offer a solution to your data woes while at the same time, strengthening those partnerships.
As a reminder, there are four types of data:
- Zero-party data is voluntary information you trade in return for a better experience. This often shows up in the form of a survey on a landing page in order to personalize an experience.
- First-party data is non-intrusively collected on your apps, websites, or cookies by observing the consumers’ actions and intent. Think clicks and time spent on landing pages.
- Third-party data is sold by a data aggregator, usually collected from various sources and sold to multiple companies.
Second-party data is simply first-party data that your partner shares with you. It’s information that two companies trade for mutual benefit or one company purchases from another. The difference is the transaction is usually limited to two partners and only for a limited time, ensuring the data you gain is exclusive and of a reputable quality. In fact, the sources are often similar to your own, like website activity, app usage, social media interactions, and private account lists. The party is just beginning–let’s find out if it’s your scene.
Do you need second-party data?
It of course depends. Are you expanding into new markets? Have a desire to grow your audience but you’re limited to your first-party sources? Second-party data could be the ticket. Here are four ways to figure out if second-party data is right for you:
- You want to expand your knowledge of new prospects or new markets
Use second-party data to scale your marketing efforts. Adding your partner’s first-party data allows you to see potential customers with fresh eyes. Find overlapping customer demographics, preferences, interests, and behaviors you may not have considered before.
If you’re exploring new markets, second-party data gives you niche information that isn’t publicly available. Use this data to create innovative, engaging marketing campaigns that you don’t have to build from scratch. Stretch your marketing budget.
- You want quality data, trust, and transparency
Who wants low-quality data from invisible data collectors? Second-party data is inherently safer because there are fewer variables and no middlemen. You negotiate everything to your heart’s desire, from data sources to fees and your specific needs. When you’re trading with a trusted partner, flexibility is your friend.
- You want an additional source of revenue for your business
Do you have quality data you’re willing to share? Interested in developing relationships and offering value to other organizations? Your data is worth more to exclusive partners over third-party marketplaces. You have control over your data and who uses it, while raking in some extra revenue.
- You want to build mutually beneficial partnerships
Join an alliance of organizations sharing lists, partnering on webinars, and expanding their campaigns together. You will be surprised at how your marketing party shifts when you include the support and expertise of partners you trust.
How can second-party data flop?
True betrayals never come from enemies. Without trust and transparency, your data can be misused, used to compete, or traded in bad faith. So it’s wise to negotiate with your partner on the type of data you’ll share, how it will be used, and for how long.
Ask yourself: Can they glean insights you’re hesitant to share? Is there a potential conflict of interest? How limited are their first-party sources? Without due diligence, you could be exposing your organization to major liability.
For example, two large MarTech companies I know of chose to share data, one of which had a large video sales offering. After a time, the video company realized their partner was quietly building a potentially competitive video product adjacent to their main services. Even though it turned out the new video product was only partly competitive, today both partners have anxiety around sharing data and maintaining their close relationship.
Making improvements and avoiding mishaps
To avoid potential mishaps like this, write safeguards into the contract. Consider only sharing your data for a limited time, like trading leads that are fair game until 90 days have elapsed. This creates a sense of urgency and protects your data and relationship.
And we can’t forget how your newly acquired data is used. Be sure your team has the knowledge to deal with your new data. If your salespeople receive your partner’s list and they’re going to engage in swidden agriculture, aka burning through it to find anything of utility and casting it aside once it’s done, all your work will have been for naught. Your team needs to understand and respect the nature of the sharing agreement and engage with it accordingly.
Finally, respect the privacy of your prospects and theirs. We’ve all seen the pithy statements in company footers that claim they will never sell your data. Your clients may have implicit trust that you’ll keep their data to yourself. Weigh the risks and communicate your intentions. It may be obvious to you that a joint webinar results in a shared list, but it may be worth letting customers know. In fact, it may win you both some points for compliance and transparency.
How do you find your second-party partner?
[Graphic: partnerships, shaking hands vs. marketplaces UI, tiles on a screen]
Seek partnerships and alliances with companies whose audiences you want to reach. Are you already co-marketing with a partner to run campaigns or events? Share your marketing data and prospect lists. Do you have a business development or partnership team in-house? They’ll jump at the opportunity to initiate the search.
Or, start with your CRM. Find the technologies your customers are using and reach out to the vendors who overlap. If you don’t record this, consider creating a new field to track this as part of the deal-closing process, or buy third-party firmographic data from Datanyze or similar.
Be aware that this method may take time and capacity, something you may have in short supply. It looks different for everyone and may include scouring Reddit communities, data marketplaces, and good old networking to find what works for you.
Seeking second-party data marketplaces
You can also seek out second-party data marketplaces to find your partner. Think of it as a Craigslist for those interested in a party of two. These private online platforms are hosted by data providers and may require some extra legwork for you to find the right partner with the right data. Be sure that whoever you choose is legit and agrees to negotiate, no prior relationship means you’re more likely to encounter data of questionable quality.
Second-party data can strengthen your B2B business’ partnerships and potential. Whether you choose a party of one, two, three, or zero, introducing more data to your pipeline requires organization and clarity. Syncari provides a distributed source of data truth for greater data agility across all your top systems, no matter how complex the integrations or tech stack. That means it’s able to identify the data where it lives across your systems, clean it continuously, and create systems that expunge old data.
If it sounds too good to be true, we promise, it’s not. Go on and throw a data party, and be sure to send us an invite. We’ve got you covered.