The B2B SaaS sector is competitive, to say the least, and quality data has become crucial for marketers to help their solutions stand out. Research from Gitnux shows that 55% of SaaS companies leverage data analytics to improve their marketing ROI, while those that use data-driven marketing are 6x more likely to be profitable year-over-year.
From engagement metrics to website analytics and customer segmentation, data forms the bedrock of every decision — every email you send, every ad campaign you run, every message you pore over.
The right data helps you to hone in on your target audience with the right offers at the right time.
But only if you can access it.
Marketing data silos are perhaps unsurprising, given the amount of data available to us today. If different departments collect and use data independently, it could hinder the effectiveness of your marketing efforts and limit your ROI.
More granularly, it could mean marketing teams waste as much as 2.4 hours a day trying to find the data they need, which can have a considerable knock-on effect on their productivity and profits.
Customer demographics, usage data, and qualitative feedback are all valuable data sets that can empower marketing teams if they know and can quickly locate them.
Achieving seamless data integration requires thought, planning, and work. But it is possible. Here, we’ll look at how and where data silos occur, dive deeper into the impact they have on your business, and actionable ways to overcome them.
What are data silos?
Data silos are collections of data that are isolated and not easy to access. For this reason, they affect the visibility and flow of data.
Nearly 80% of people say teams throughout their organization are siloed, which directly impacts visibility, puts teams at greater risk of error and poor decision-making, and makes it more challenging to access relevant insights.
Open-source time series platform InfluxData was one of numerous companies to be hindered by data silos.
Marketing, finance, and sales teams used different tools to access their data and figures. This made it challenging for decision-makers to track the flow of data across systems or implement version control. Teams were pulling the same data but getting different numbers, finding it hard to scale data, and disagreeing on which data sets were “correct”.
It was apparent the company needed a solution to centralize data management.
As a result, they implemented a data activation strategy to eliminate these siloes. What is data activation? It refers to rolling out business activities informed by relevant data to aid decision-making.
In this case, InfluxData used RudderStack’s Reverse ETL tool to move data from siloed storage locations and make them more easily accessible to marketing teams and other departments.
What is reverse ETL? Reverse ETL (extract, transform, load) is a concept that flips the traditional flow of data, delivering processed data back to operational systems. Reverse ETL can help address accessibility challenges and is considered a key element of a data management policy.
How do data silos occur?
Data silos are part and parcel of managing data but they’re incredibly irritating. Understanding some of these common causes can help you get to the root cause of the problem.
1. Disconnected technology
For technology to work well, it needs to work together. An old database or a near-obsolete CRM system can pose integration problems that lead to data silos. Not only this, but some systems can’t share data as they lack the relevant tools to do so.
This is particularly problematic when different teams rely on a central data stack or have a decentralized IT model. Each team may use different tools and technology that may not be accessible to other teams. This problem can worsen as businesses grow and add new tools and data sets without proper planning on how to integrate them with current systems.
A lack of proper tech infrastructure can significantly hinder your goals, as professional healthcare education and technology company StatPearls found out. The company’s data teams wanted to optimize the customer experience while gaining insights into conversion rates from organic content and paid marketing campaigns.
They exported data from payment systems and app databases, but the need for dedicated infrastructure made it challenging to gain the necessary visibility. These technical limitations meant their marketing team was unable to optimize onboarding and lead nurturing as they lacked proper insight into where users were in their journey or the necessary data to segment users properly.
After streamlining their tech, StatPearls witnessed a three-fold increase in personalized message volume and a 3.8x increase in ad spend with positive ROAS.
2. Business growth
As businesses expand, they accumulate new teams, systems, processes, and data sources. This change can occur quite quickly and, without proper alignment with current systems, can create data silos.
Growth can lead to different departments using their own data sets and not sharing them with other teams. This can lead to fragmented marketing campaigns and a poor understanding of customer needs.
For the smart home technology company Wyze, the business’ growth led to its feeding customer data into a recommendation and personalization engine. The goal was to generate further growth by steering customers towards relevant product purchases.
Instead, the team faced too many event logs from disparate sources and a slew of unclean data. This had a knock-on effect on every department, including marketing, subscription, AI, and data engineering, and rendered the recommendation engine ineffective.
After adopting a native approach to their data warehouse, Wyze marketers were able to issue 3x more campaigns driven by ML models and increase conversions.
3. Team culture
While technology can be a prime culprit for causing data silos, so can the people within your business. The whole point of data is to understand the customer, make sales, and provide a great customer experience. When teams don’t share data, they inadvertently reduce its value.
If there isn’t a culture of collaboration, teams can effectively end up working in isolated bubbles, ‘guarding’ data for their own use. This can negate the point of having the data in the first place.
Different teams must understand the importance of sharing data throughout the organization to benefit the company. This is especially true for sales and marketing teams, who should align their goals and objectives with those of the company as a whole.
4. Takeovers, mergers and acquisitions
One of the advantages of mergers and acquisitions is that you can take each business’s best data management practices and discard those that don’t work either. However, without careful thought and planning, you could end up with Rachel’s trifle in Friends; you know, the one with the beef and peas? It won’t work.
If you consider the data silos that occur with different teams working together, imagine what can occur when different companies merge together. Two companies could operate two completely different cultures, and harmonizing both will require careful management.
What are the big issues with data silos?
Data silos prevent access to valuable data when you need it. In marketing, this can impact customer satisfaction and your bottom line.
They’re not just a problem for marketing teams. They’re a common problem across the board. Here are some of the critical issues:
1. They limit your overview of campaigns
Data silos make it hard for marketers to have full visibility over campaign performance. If data is fragmented, you can’t see how any given piece of data will impact the bigger picture. This makes it difficult for marketers to manipulate and amend campaigns to get the best outcome.
2. They prevent marketing teams from presenting key facts
If marketing teams don’t have the full picture, it can be hard for them to justify spending in meetings and show if and how the budget is working for the company. 47% of chief marketing officers find it hard to show the impact of their marketing efforts on the rest of the business.
If sales and marketing data are isolated, data visualizations will be inaccurate, and it can be difficult to prove a positive correlation.
3. They impact the customer’s experience
Customer experience is paramount to SaaS products. Your customers must be able to seamlessly use products, immediately upgrade their plan, and easily report issues or get support when needed. Without this, any marketing messages you deliver later in the user journey will be ineffective.
Not having instant access to the most up-to-date data can lead to problems handling queries, which can be frustrating for the customer. It also means you can’t properly segment data to personalize campaigns, which is becoming a crucial factor in delivering an exceptional customer experience today.
MANSCAPED customers felt the impact of data silos. The personal care company is known for its modern branding and heavily invests in social media advertising, influencer partnerships, content marketing, and email marketing. This is balanced with a focus on delivering positive and personalized customer service.
But data silos between the marketing and advertising team meant an inefficient workflow started impacting the customer experience. Poor integrations negatively impacted site performance, and a lack of insights made it challenging to use event data on Facebook to identify match quality.
After bridging the gap, MANSCAPED significantly improved page load times and saw a 37% increase in revenue due to greater campaign management efficiency.
4. They can impact ROI
When you spend money on marketing, you need to know what works well. This means having the full picture and involves pulling together data from both the sales and marketing departments. Data silos make it difficult to see how spending should be adjusted to maximize results. This can lead to marketing departments spending money in the wrong places, giving a poor ROI.
This was a challenge Proposify was well aware of. Previously, the online proposal software company’s data was in different formats and systems. This delayed marketing teams in rolling out cross-platform campaigns and made it challenging to get the insights they needed for events on their website, mobile, and third-party apps.
After standardizing data sync and delivery, Proposify teams can now automate data collection and view events and actions in real-time. As a result, they can see which channels result in the most leads and conversions and track the impact of marketing campaigns on revenue.
This has allowed the team to optimize their marketing spend and build more effective campaigns to boost conversions and retention rates.
How to overcome data silos
Identifying data silos in your business is not a catastrophe but it’s important to take action. There are a series of steps you can take to integrate data.
1. Identify where your data is
Going back to our previous case study with InfluxData, each team, from marketing to sales to finance, had its own system, including PostgreSQL, Marketo, Salesforce, Domo, and the company’s own InfluxDB.
That meant each team data lead pulled data from their relevant system and used it to make decisions. This created a situation where each team used similar figures but produced different findings. One of their first steps was to set up a central data warehouse with a pipeline that pulled data from each of these sources to create a “single source of truth”.
Knowing what data you have and where your data is stored is an important first step in breaking down data silos. You will need to identify all the data points that hold useful marketing data, map out which departments hold what, and then look at the best strategy to break apart the data silos.
Identifying data silos is a crucial part of this step. To do this, look out for:
- Inaccessible data. Look out for reports that are only available to certain teams or departments as this can be indicative of a data silo.
- Look at communication across departments. If the culture isn’t collaborative and departments aren’t communicating, this could be a sign of a data silo.
- Identify duplicated work. If different departments are producing the same analysis, it could mean they’re not sharing data.
- Look for discrepancies in customer profiles. If different departments hold customer profiles that differ, this could mean there are missing pieces in the data sets they use.
- Check the KPIs. Differences in key metrics can mean departments are using siloed data.
2. Develop a strategy for data management and governance
A solid data management framework can help you plan the project ahead. Moreover, a robust data management strategy can help you communicate to staff how data will be managed moving forward.
A data governance policy can help you identify and prevent data silos. This is because it sets out clear guidelines for data quality and flow. An important part of the policy is that it will clearly define roles and responsibilities regarding data and set standards for use and access.
InfluxData’s siloed data was mirrored by a lack of data governance and version control. A key step in making data more accessible to everyone was establishing a more robust data management strategy, which included establishing guardrails around data definitions and implementing better data hygiene.
This can be challenging when working with different departments. So make sure your strategy is clearly defined, and you seek input from different teams. Everyone needs to understand how data governance will benefit them and what their role is in maintaining a data workflow and standard of data quality to avoid silos creeping back in.
3. Implement data integration software
Today, 31% of companies are focusing on fully integrated tools and technologies that eliminate data silos — and for good reason.
Migrating data and creating a smooth flow of information is incredibly time-consuming if done manually. It’s even more challenging if you have a high volume of data, rely on various different systems, or use older technology.
Data integration tools like RudderStack automate the process, helping you merge and consolidate data from disparate sources into a single, authoritative source of information. They connect software your teams are currently using, whether for email marketing, customer relations, or campaign management, and ensure there’s a continuous flow of data from end-to-end.
The tools work by creating data pipelines that extract the data from each system, standardize the format, and load it into the central repository, which could be a data warehouse or lakehouse.
This guarantees all teams have access to real-time, accurate, and consistent information so you can analyze and act on metrics as and when needed.
These tools also allow you to create a flexible architecture so your data team can customize the software based on complex use cases, integrate it into your existing workflow, and scale as your business (and data) grows.
They work across the entire customer journey, and can even generate insights for you, so you can create churn and conversion scores and sync them with other tools like marketing and customer success tools. In this way, your entire business will have a 360-degree view of every customer, interaction, and campaign to drive ROI.
There are a few things to consider when looking at integration tools and you need to identify which one meets the needs of your business best. Consider:
- The size of your business
- Scalability
- Compatibility with current systems
- Ease of use
4. Embrace automation
Automation in marketing and sales can reduce the risk of siloed data. One of the biggest causes of data silos is relying on teams to bring data together. Automating data integration makes the process much more efficient. It reduces the time and effort staff need to spend on sharing data and minimizes the risk of human error.
This is particularly important in sectors like healthcare. HealthMatch’s data management strategy included automating the enrollment process for new customers. By implementing automation, the company reduced the risk of human error, ensuring they remained HIPAA compliant.
5. Develop a collaborative company culture
Now, company cultures don’t change overnight, but they don’t change at all if you don’t work towards a shift. Some of the steps you can take to try to break down barriers between departments include emphasizing the importance of sharing data and setting joint projects.
Leading by example from the top is a great way to demonstrate the benefits. This means executive-level team members getting involved in projects and modeling open communication across departments. This type of leadership can cause a ripple down effect throughout the company and helps build a culture of inclusion and transparency.
Another way to incentivize collaboration is to recognize and reward teams for sharing data. This will help the culture spread throughout your organization faster whilst showing staff you value their efforts. You could go one step further and encourage staff to spot and report data silos actively.
6. Keep data security in mind
When breaking down barriers to data integrity, it can be easy to overlook how changes to data sharing might impact data security. A culture of data sharing should be built with data security measures at the heart. Methods to ensure data security include:
- End-to-end encryption for data in storage and transit.
- Using different access levels for different personnel.
- Running regular data security training.
- Conduct regular data security compliance audits.
Final summary
Data strategy is a crucial part of running a successful business. Data silos are a hex that prevent sales and marketing teams from accessing useful insights. This means they can’t make the most of the campaigns they run. Breaking down data silos is a challenging but crucial part of data management if you want to really elevate your campaigns and maximize the full potential of your data.
By putting data at the heart of your company, working on building a collaborative culture with shared goals and outcomes, and using the best integration software, you can blow the roof off your current marketing and see what data can really do for your business.
