The term data silo refers to databases and information that are located in different places within the company and to which only certain departments or users have access.
Data silos are not always negative: in some special cases, they have to exist in order to meet certain compliance or data protection guidelines, such as in banking.
Data silos are an obstacle in online marketing and in addressing customers. There are many points along the customer journey where customers and potential customers come into contact with a company. At each of these contact points, different data on the user is created - these are usually stored in different programs or databases. In order to address customers uniformly across the various points of the customer journey, data silos must be avoided, dissolved or linked together.
If several silos with the same data exist, errors will occur because the data may not be maintained in the same way. Furthermore, data silos with the same data require much more storage capacity and cause higher workloads.
In order to address users as individually as possible, relevant and up-to-date user data is extremely important. This includes, for example, personal preferences (preferred brands or categories), the user's purchase history and possibly existing newsletter subscriptions. Only companies that keep this information up to date will know their users and be able to optimize the shopping experience for customers across all channels. However, the risk of creating data silos increases the more channels are available to interact with users.
An example makes this particularly clear: A user purchases on an online shop every month but visits the shop daily in search of special offers. Another user visits the site only once a month but buys every time. These are users with very different requirements. Presumably, however, the Customer Relationship Management System (CRM) stores the note "buys once a month" for both of them. A differentiated approach is only possible when the data from the CRM system is merged with behavioral data on the website.
In order to dissolve data silos, a central database is required to align the company and its departments with customer needs and to enable a personalized approach. In order to be able to answer inquiries quickly and correctly, access must be possible from all departments. This allows for a comprehensive platform (for example a Customer Data Platform) or a Marketing Suite. With them, the data can be linked together and used for an optimized approach.
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