How Brands Can Leverage CRM and Loyalty Programs for First Party Data

The realization hit Pedro during a crisis meeting at his agency. A major retail client had just lost access to a third-party data provider they'd relied on for years. "We're flying blind," their CMO declared, panic evident in her voice. "How will we understand our customers now?" As the room erupted into troubleshooting, Pedro remained quiet, reflecting on a small project he'd led six months earlier. They had helped a boutique hotel chain revamp their loyalty program, and in the process, the hotel had accumulated more actionable customer data than they'd ever purchased from outside sources. That evening, Pedro began researching how leading brands were using loyalty programs not just as retention tools but as powerful first-party data engines. What started as damage control research transformed into a fascination with how the convergence of CRM, loyalty, and first-party data was reshaping marketing fundamentals in the privacy-first era.

Introduction: The Renaissance of Owned Customer Relationships

As third-party cookies crumble and privacy regulations tighten globally, first-party data has emerged as what Forrester Research calls "the new marketing currency." This direct, consensually gathered customer information represents not merely a tactical alternative to third-party data but a strategic asset with profound implications for personalization, customer experience, and competitive advantage.

At the intersection of this transformation lie two of marketing's most established systems: customer relationship management (CRM) platforms and loyalty programs. Once viewed primarily as operational and retention tools respectively, these systems are being reimagined as the central infrastructure for privacy-compliant, consent-based marketing in the digital age.

As Professor Sunil Gupta of Harvard Business School observes, "The organizations successfully navigating privacy disruption aren't simply finding alternatives to third-party data—they're fundamentally reconceptualizing their relationship with customer information, viewing it as a mutually beneficial exchange rather than a resource to be extracted."

1. The Strategic Evolution: From Transactional Systems to Data Foundations

Today's most sophisticated CRM and loyalty approaches have transcended their origins as transactional record-keeping systems. Starbucks transformed its loyalty program from a simple punch card into what CEO Howard Schultz describes as "our primary consumer research lab and personalization engine," capturing over 40 data points per customer interaction.

Similarly, Sephora's Beauty Insider program evolved from a traditional points-based system into what McKinsey analysts call "a comprehensive preference center" that powers personalization across channels. The program captures not just purchase data but product preferences, shopping behaviors, and explicit customer-provided information that third-party sources could never replicate.

This evolution reflects a broader shift identified by the MIT Sloan Management Review: successful organizations are transitioning from "data scavenging" to "data cultivation"—purposefully designing customer interactions to generate high-quality first-party data while delivering clear value to consumers.

2. The Value Exchange Imperative: Designing for Mutual Benefit

Effective first-party data strategies depend on what the Wharton Customer Analytics Initiative terms "the reciprocity principle"—providing sufficient value to motivate consumers to share information voluntarily. Leading loyalty programs have reimagined their value propositions accordingly:

Nike's membership program offers exclusive content, early product access, and personalized training recommendations in exchange for activity data and preference information. This approach has yielded what Digital Marketing Professor Jeanette Mena calls "the holy grail of first-party data: information consumers actively want to share because it improves their experience."

The Kroger Plus program similarly demonstrates this evolution, offering personalized discounts based on purchase history. As Kroger's Chief Data Officer Stuart Aitken notes, "When the value exchange is clear and meaningful, consent rates exceed 85%, creating a virtuous cycle of better data leading to better experiences."

3. Beyond Transactions: Expanding the First-Party Data Spectrum

Forward-thinking brands are expanding first-party data collection beyond the point of purchase. The North Face's XPLR Pass program captures data across the customer journey through:

Interactive product finders collecting preference data
Virtual try-on experiences generating fit information
Post-purchase feedback loops gathering usage patterns

This holistic approach enables what Stanford Marketing Professor Jennifer Aaker calls "360-degree personalization"—tailoring experiences based on comprehensive customer understanding rather than purchase history alone.

Best Buy's approach similarly emphasizes breadth, combining:

In-store interaction data from associate tablets
Website browsing patterns and search queries
Support interactions and service requests
Product registration information

This comprehensive view enables what Chief Customer Officer Allison Peterson describes as "relationship-based personalization rather than transaction-based targeting."

4. Technological Enablers: The Modern First-Party Data Stack

Technological advances have dramatically expanded what organizations can achieve with first-party data. Four key innovations are reshaping capabilities:

Customer Data Platforms (CDPs) unify fragmented data into cohesive customer profiles
Machine learning models identify patterns human analysts would miss
Real-time decisioning systems activate insights at the moment of customer interaction
Privacy-by-design architectures ensure compliance throughout the data lifecycle

Walgreens' implementation of these technologies within their myWalgreens loyalty program demonstrates their potential. Their CDP unifies prescription data, front-store purchases, app interactions, and website behavior into what their CTO Mike Maresca calls "a privacy-compliant single customer view that enables personalization while respecting boundaries."

5. Organizational Transformation: Breaking Down Data Silos

The most successful first-party data strategies involve fundamental organizational changes. Marriott Bonvoy's evolution required what CEO Anthony Capuano describes as "dissolving the traditional boundaries between marketing, operations, and technology."

This integration enables what Professor Omar Rodriguez Vila of Emory University calls "connected loyalty"—where customer insights flow seamlessly across touchpoints. Marriott's approach ensures that preferences collected during a stay immediately inform marketing communications, website experiences, and mobile app interactions.

Professor Rita McGrath of Columbia Business School notes that this transition requires "shifting from departmental data ownership to enterprise data stewardship"—treating customer information as a shared asset with shared governance.

Conclusion: The First-Party Future of Customer Relationships

As third-party data sources become less accessible and less effective, CRM systems and loyalty programs represent not merely alternative data sources but superior ones. The consensual, transparent nature of these first-party relationships creates what the Journal of Marketing terms "data of unprecedented quality and utility."

Organizations that successfully leverage these systems gain significant advantages: deeper customer insights, more meaningful personalization, and importantly, relationships built on mutual value rather than surveillance. As Professor Scott Galloway of NYU Stern observes, "The future belongs to brands that earn the right to customer data rather than those that acquire it through increasingly tenuous third-party mechanisms."

Call to Action

For marketing leaders navigating the privacy-first transition, three priorities emerge:

Audit existing CRM and loyalty systems to identify untapped first-party data opportunities, focusing on high-value customer insights currently sourced from third parties
Redesign value exchanges to ensure customers receive clear, meaningful benefits in exchange for their information
Invest in technical infrastructure that unifies first-party data across touchpoints while maintaining rigorous privacy compliance

The organizations that execute on these priorities will not merely survive the deprecation of third-party data—they will thrive in the privacy-first era by building deeper, more valuable, and more sustainable customer relationships.