3 Reasons Customer Data Silos Inevitably Fail

Buck Webb | July 5, 2018

You may be thinking: My data is in purpose-built silos. There’s no way to dismantle them.

Fortunately, you don’t need to. Those silos were built so functions such as accounting, marketing, sales, and shipping could work with only the customer data they need in the format they need it. Doing so increases efficiency and improves data management for individual teams. And, specifically in marketing, DMP, ESP, social channels, and display all typically represent silos just within the marketing team.

But in the age of the omnichannel consumer, you absolutely must bridge those silos. Half of customer interactions now happen during a multi-event, multichannel journey, according to McKinsey. Consumers expect brands to understand their entire history regardless of channel, which is something most brands aren’t able to do — primarily because of data silos.

When customer data is present in disconnected silos, it becomes a barrier to effectiveness and success. Marketers are unable to deliver the kinds of relevant experiences that consumers demand and desire in the modern age and that will help cement loyalty and increase revenue. Data scientists struggle to get the proper data in the proper context to build models that effectively monetize the data. Consider that, according to Forrester Research, when consumers have “excellent” experiences with a brand…

  • 83 percent will stay with,
  • 82 percent will spend more with, and
  • 94 percent will recommend that brand.

There are three primary reasons why marketers who have access to only siloed data are unable to act on customers’ desires: lack of visibility into the customer lifecycle, inability to understand signals necessary to personalize in real time, and no way to deliver messaging through the correct engagement touchpoint.

Fortunately, a data hub such as a customer data platform (CDP) can bridge data silos and help marketers overcome those three obstacles. Basically, a data hub is a central location to store customer data such as personally identifiable information (PII) and behavioral data from interactions across offline and online channels including second- and third-party data. A robust data hub such as a CDP allows marketers to integrate anonymous and known customer data into a single platform to create a persistent, real-time, holistic view of each customer. This enables marketers to orchestrate more relevant and personalized omnichannel campaigns, as well as respond to customers in their moment of need or action.

Let’s take a closer look at each reason data silos cause a customer experience fail, as well as how implementing a CDP can help overcome them.

Lack of Visibility into the Customer Lifecycle

The buyer’s journey today is more like the erratic flight of a bumble bee than the linear path of a jet. Customers’ interactions throughout their lifecycle aren’t much different. Customers traverse online and offline channels as they research, shop, and buy, and, as they upgrade, renew, seek service, and the like.

Marketers stymied by siloed customer data have little insight into potential opportunities or problems that customers’ seemingly disconnected interactions may signal. For example, you may have a warranty from a customer who bought a refrigerator 10 years ago from a retail partner. You may know that the customer subscribed on your website to purchase a refrigerator filter every month from your automatic replacement service. You also may know that he phoned customer service. And, you may know that someone who “looks like” that customer has been researching your latest models online. But without connecting the dots, you may not know that your customer called to cancel his filter subscription because he’s in the market for a new fridge.

A CDP brings together data from across the functional and channel-specific silos in your organization to know all that is knowable about your customers, allowing you to build progressive profiles as your customers interact with you over time. Additionally, a CDP helps you recognize individual customers across multiple channels and interaction touchpoints, so you can deliver relevant, personalized offers whether customers are in your physical location, online, or on their mobile device. As a result, you can capture that in-market refrigerator customer’s attention and sell him your latest model instead of losing him to a competitor.

Inability to Understand Signals Necessary to Personalize in Real Time

It may seem crazy, but 79 percent of U.S. consumers say they expect brands to show they “understand and care about me” before those consumers will consider making a purchase, according to a study by marketing agency Wunderman.

When marketers lack the access to a continuously updated, holistic view of the customer that a CDP provides, they can’t move at the speed of the customer. Nor can they deliver contextually relevant, personalized communications at the moments it matters most: when customers are making a purchase decision. In fact, 74 percent of marketers say they can’t recognize customers in real time, an Acxiom study found.

A CDP’s ability to bridge silos and create an always-on, always-processing unified view of a customer’s online and offline interactions allows marketers to track and respond to buying signals in real time. That’s why access to customer data is so vital for the modern marketer. Customer data should be like electricity, allowing access to data in the moment of need, so marketers can deliver the contextually relevant interactions that engage customers, increase loyalty, and improve both short- and long-term results.

The benefits you can gain from personalizing interactions in real time are too valuable to keep data locked in functional or channel-specific silos. A customer data platform can bridge those silos and empower you with the most up-to-date insights and analytics, so you can understand your customers and their needs and motivations, and then act at the speed of the customer, delivering contextually relevant interactions that build loyalty and sales.

No Way to Deliver Messaging Through the Correct Engagement Touchpoint

Nearly three-quarters of consumers (73 percent) use multiple channels during a shopping journey, according to a recent study. And, on average, marketers are using 16 different channels to reach and interact with customers, according to Forrester Research.

The question is: How often do those channels match? The answer: Not often enough.

A study by Acxiom and Digiday found that 70 percent of marketers have suboptimal or no ability to integrate customer data between online and offline sources. Plus, point solutions implemented for different functions may use different identifiers for customers. That siloed customer data makes it all but impossible to know which channels will be most effective with specific customers. Marketers need visibility into a unified view of customers’ interactions in offline and online channels to make informed decisions on how to optimize their communications.

A CDP brings together disparate information about each customer, such as associate ID, account ID, and email. It also connects with internal and external systems through APIs and SQL queries. This allows for chaining and appending external data. A CDP supports identity management and cross-device and cross-record matching. All of this enables both omnichannel marketing and customer journey management. In other words, you’re far more likely to deliver messages through touchpoints that will have the greatest impact.

What’s Next

Using a robust data hub such as a customer data platform, you’ll gain visibility into the customer lifecycle, improve your ability to understand signals necessary to personalize in real time, and have a way to deliver messaging through the correct engagement touchpoint. As a result, you’ll have more engaged customers who are more likely to stay and spend more.

More than half of the consumers polled in Wunderman’s “Wantedness” study (56 percent) say they’re more loyal to brands that “get me” as a segment of one; in other words, businesses that show a deep understanding of their customers’ preferences, needs, wants, and past purchases. Only marketers who bridge silos through a CDP can help their brands achieve this.

Don’t let data silos lead to a customer experience fail for your organization. Bridge your silos using a CDP and use that unified customer data to build loyalty and sales.

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Buck Webb
Buck Webb

As Vice President of Cloud Solutions for RedPoint Global, Buck Webb brings to bear more than 30 years of professional services experience in business intelligence, data warehousing, marketing and business analytics. At RedPoint, Buck ensures that the company’s technology solutions map to the product strategy for both on-premises and cloud architectures. Connect with Buck on LinkedIn and Twitter.