It’s no secret data silos are the enemy of all organizations and their growth-focused teams (e.g., marketing, customer service, customer experience, analytics, etc.).
Data isolation — in which one’s customer data lives in separate, fragmented solutions throughout their stack that don’t “speak” with one another or with other teams across the business who don’t share cross-departmentally — deters truly effective marketing.
It’s also no secret many business leaders at mid-sized and large-scale organizations alike haven’t addressed the data silo problems within their respective organizations.
A 2018 Gartner survey found 87% of business leaders believe their companies have “low business intelligence (BI) and analytics maturity” — a primary driver of data silos.
According to Gartner, it’s also something that “creates a big obstacle for organizations wanting to increase the value of their data assets and exploit emerging analytics technologies such as machine learning.”
(Translation: Silos negatively impact customer data analysis.)
And yet, many executives either don’t see data silos as a problem (unlikely) or simply haven’t prioritized integrating data sources into a centralized system that provides marketing with full access to data and the coveted (and critical) single customer view (far more likely).
The lack of proper technology, like a customer data platform (CDP), is certainly the biggest barrier to both eliminating destructive data silos and helping growth teams share data across their organizations to improve their day-to-day operational efficiency.
The current state of first-party data silos
Organizations across industries experience data silos (or, at the very least, inconsistent and/or inaccurate data in their myriad business technologies) in some form or another.
But it’s leading businesses that nip data silos in the bud as soon as they identify them to enable more efficient data analysis, segmentation, activation, and modeling.
According to a 2018 survey by technology news publisher DZone, just 2% of large-scale companies noted they are “completely effective at data sharing.”
That means a whopping 98% of respondents likely have damaging data silos today.
This also means these companies are ill-equipped for sharing crucial customer data with one another cross-departmentally and leveraging expertise from data-oriented teams.
What’s more, their organizational structures are in dire need of repair to provide marketing, CX, and other growth-focused teams (i.e., those that are charged with business growth and/or engaging customers) with the now-essential single customer view.
Meanwhile, it’s the companies in this 2% that recognize the downfalls of data silos (e.g., wasted resources, like poor spending on advertising campaigns) and address the issue head on before it exacerbated that you and your team should emulate.
How customer data silos deter growth teams’ efficiency and effectiveness
“Is it really that bad to have data silos in parts of the organization? We know our ‘cloud-based data’ is up there somewhere. What could go wrong for the business?”
In short? A lot.
For starters, the existence of siloed data, more often than not, means the solutions used to host your data (the usual suspects: CRM, data lakes/warehouses, ESP, adtech tools, etc.) don’t sync with one another or other software in your technology stack.
That right there means you need to lean on IT, data science, and/or (costly) external agencies to pull custom lists when you need data regarding certain segments to use as required in your day-to-day: from audience analysis to cross-channel lifecycle orchestration.
Then there’s the problem of lacking an intuitive, automated, speedy way to share data across the business. Manual collection of customer data simply because said data is scattered all over your tech stack should no longer be a concern for your business.
Particularly if you’re an enterprise with sizable data integration and management needs.
Moreover, data silos can lead to duplicate information regarding existing and prospective customers when that data remains stuck in dated, disparate databases with no one in one’s business — including and especially the marketing team — the wiser.
We no longer live in the age of securing more customer data for the sake of quantity.
Today, it’s about high-quality, up-to-date data that updates dynamically in real time and deletes duplicate profile details that can derail efficient messaging and metrics.
Aside from the operational systems downsides of data silos, there’s also the financial impact. It costs money (and usually lots of it) to have numerous systems host data.
The storage costs of cloud data solutions alone should be enough for your C-suite to recognize the problem and seek out a modern, centralized customer database.
Specifically, one in which all first-party customer data can be both unified, activated, and otherwise utilize with ease by the aforementioned growth-focused teams.
The CDP: Your path to eliminating your data silo issues (and mentality)
The more executives recognize the need for more cohesive and consistent data consolidation — and prove to their peers it’s worth it to consolidate — the more money they’ll be able to set aside for the appropriate martech investments that can gradually eliminate all data silos.
Having said that, a sufficient budget won’t resolve your data silos instantaneously.
You also need to develop new data integration and unifications protocols that prevent future silos from emerging, then train everyone within your organization on said protocols.
There are certain key characteristics modern, data-driven cultures have today:
- Data literacy training is provided to requisite teams and staff members regularly.
- Customer data objectives and KPIs are clearly laid out by brand leadership.
- Routine data cleaning (i.e., removing dated or inaccurate data) is a top priority.
- Employees have their data-related concerns and ideas heard by business leaders.
- Thoughtful tech evaluation is conducted to find the ideal central database.
- Departments don’t withhold important data sets from colleagues across teams.
Thankfully, the CDP was created primarily so companies could seamlessly sync their customer data from databases and channels on their own and take complete ownership of their organization’s first-party data. (That is, without need from technical teams.)
Big-data expert Edd Wilder-James noted in the Harvard Business Review the worst thing companies looking to integrate customer data into a central database can do is fail to get everyone who touches said data involved in the migration process:
- “The cross-organizational nature of integrating data means that unless you are working with the support of executive leadership, and leaders across business and IT, you will be frustrated.”
With a CDP in place, every tech user across growth teams can leverage the platform to analyze customer behavior, activate data via lifecycle orchestration activities, build multi-dimensional segments, and deploy predictive models with amazing ease.
Accessible, actionable, consented first-party data that lives in a centralized location is now a must for companies of all kinds. And the customer data platform is the only technology that can offer this — and, in turn, tear down data silos for said businesses.
Download our eBook to learn how data silos in the cloud suites deter marketing success — and why a best-of-breed stack built around a CDP is best for your business.