3 dangers of data fragmentation that can sabotage customer personalization

School’s back in session, and the holiday season will be here faster than you can say trick or treat. As marketing teams gear up for their end-of-year strategies, including a focus on Black Friday and Cyber Monday (BFCM), disparate customer data is often a frustrating issue that inhibits effective, personalized omnichannel outreach.

The cause of this disparate, siloed data is a “Frankenstack”—when brands combine various tools, software and technologies that do not integrate well together, and leave data marooned where it is collected.

According to a recent BWG-Klaviyo survey of e-commerce executives, more than 80% report that their current tech stack has issues with data consistency, cleanliness and integrations. What’s more, only 2% are happy with their current tech stack, with siloed data being the main driving force behind their desire to update.

The dangers of a fragmented tech stack are real and can inhibit sales during vital e-commerce opportunities. There are, in fact, three big problems with a Frankenstack, but the right customer data platform (CDP) can effectively and efficiently bring about resolution.

1. Incomplete customer data. When data is siloed between platforms, segmentation and personalization become nearly impossible marketing chores. Without a 360-degree view of customers, brands are limited to simple top-level personalization, which doesn’t help them stand out in today’s saturated marketplace.

“According to McKinsey, 80% of consumers want personalization from retailers,” said Anthony DelPizzo, product marketing lead at Klaviyo. “People don’t respond if you’re treating everybody as if they were the same shopper.”

If customer data isn’t interconnected—everything from loyalty to help desk to in-store point of sale—the result is less-relevant messaging, redundant discounting, an increase in canceled subscriptions and lower lifetime value.

But by adopting a CDP, brands can communicate with customers on what feels like a 1:1 basis. With unified customer profiles, they can focus on addressing individuals more personally instead of just as anonymous targets.

Here at Klaviyo, we’ve seen this approach increase customer lifetime value and retention, and decrease return on ad spend. What’s more, according to McKinsey & Company, successful omnichannel personalization can lead to a 5-15% increase in revenue across a brand’s entire customer base.

2. Disjointed strategic and technical support. No one enjoys calling technical support, and the dread only grows when there are multiple points of contact for each platform. This not only makes it harder to get timely advice and assistance, but also opens the door for frustrating mistakes, because the means of troubleshooting issues are often unclear and guidance is not holistic.

With the Klaviyo CDP, “we really wanted to enable the end marketer to be able to troubleshoot a lot of their issues themselves, so they don’t need to call an outside company,” said Jenn McCarthy, Klaviyo’s principal technical writer. “Because everything is inside of the CDP, they can see and validate all their data and iterate and adjust in real time.”

And if there’s a hiccup with a customer order, determining what went wrong and how to make it right is simple because all platforms and data are consolidated.

“You don’t have to find who manages the shipping tool, and who manages the online e-commerce tool, and who manages the email program and order information,” continued McCarthy. “You can actually troubleshoot directly with the customer.”

3. Inaccurate reporting. One of the biggest complaints from brands prior to onboarding a CDP solution is that they can’t trust their data. Whether the information feels outdated or is simply inaccurate because it’s not capturing the entire customer experience, it’s a huge issue for marketers who need reliable data to plan appropriate and timely campaigns.

Further, a lack of shared data among platforms leads to misleadingly inflated sales numbers, inaccurate growth forecasting, and money needlessly wasted on unsuccessful marketing strategies.

With a CDP, however, all data is aligned, transformed and cleaned up into digestible reports that can, for example, quickly demonstrate what is and isn’t working for a specific ad campaign. Marketers can easily see where customers are dropping off and how to optimize their funnels.

McCarthy saw this firsthand with an online wellness brand that adopted Klaviyo CDP and started using a reporting tool called RFM analysis. The marketing team used the feature to identify 25% of their customers who needed to be re-engaged, then targeted them directly with personalized messages in their preferred communication channel (think email or SMS). The result was a strong uplift in email open rates, click rates for SMS, and ultimately revenue.

“With reporting, it’s not only about clean and accurate data that ascribes to the correct customer,” McCarthy said. “It’s also vital to have data that’s actionable and easy for marketers to use, and that doesn't require extensive technical knowledge.”

While navigating e-commerce can seem as if it’s getting trickier as more advanced technologies and platforms emerge, centralizing everything within a CDP can help simplify that abundance of data and prevent valuable information from becoming siloed and useless. The best marketing strategy of all: transforming the millions of data points your stack is collecting from multiple sources into identifiably individual customers who you can directly communicate with at scale.