Data Silos May Impede Conversion Rate Optimization

One conversion rate optimization rule of thumb says: “The more you personalize the site experience based on all you know about the visitor, the higher the conversion rate will be.” Higher conversion equals better results, and greater revenue. That’s strong motivation for any ecommerce site looking to improve ROI.

But another rule of thumb may be emerging as consumers get more sophisticated in their online habits: “Failure to use information about a visitor could have a negative effect on conversion.”

Consider the email I got from Walmart about 10 days ago. It was waiting for me when I came indoors after spending an hour trying to plow the snow from my yard.

The subject was: “Celebrate Spring With Savings on Patio Furniture, Apparel, Swings & More.” Just so you get the picture, I have super-imposed a screen shot of the email on a snapshot of the yard at the time I got the message.

My first reaction to the email, as a consumer and not a marketing professional, was confusion. The mental process went like this: “Walmart knows where I live and the weather where I live is no mystery, so why did they send me an email offering deals on new patio furniture when mine is still covered with snow?”

Then I tried thinking it through as a marketer. Sending the exact same promotion to everyone on your mailing list is cheaper and easier than customizing offers by region. Sure, you might get greater conversion from emails that are geo-targeted, but would the incremental revenue be worth the extra effort?

And there’s the rub: How much extra effort does it take?

For large enterprises the answer often comes down to silos, not the kind in which my neighbors store their corn, but data silos. These are databases that exist in relative isolation within an organization.

Silos often contain information that could be used for multiple purposes, including marketing. But that information currently isn’t available to all the people who could use it — at least not without a lot of effort.

Typical silos are inventory, shipping data, order data, billing data. Different silos often contain multiple records of customer names, addresses, and contact data.

Unfortunately, issues in the areas of system architecture and corporate structure can mean that the fullest possible profile of the customer is not readily available to anyone, and that’s a pity.

For example, Walmart could have achieved a better reaction from me simply by looking in the customer database, seeing where I live, then sending the same email content under a different subject line, such as: “Hang in there, Spring is coming!”

I know Walmart has some amazing data systems and I don’t mean to poke fun at the company (I shop there quite often and I like getting their emails). Although that offer of patio furniture sure didn’t convert in my case, I found it more amusing than offensive. Yet there is a darker side to this silo problem, something you might call conversion poisoning.

Let’s face it, regardless of how much time and money you invest to come out on top of the search engine results page, there are always other results visible on the same SERP, whether your prospects are searching with Google, Bing, or Yahoo. So the searcher always has choices, and if the searcher has a negative perception of your brand, they will likely click one of the other results.

Like Walmart, Verizon also knows where I live. When I go to the website called “My Verizon” to pay the bill for my landline phone, Verizon actually shows me the weather conditions for my address. But I’m also shown offers and information about Verizon’s fiber optic and DSL broadband services.

Unfortunately, Verizon has no plans to supply either of these services to my address. Furthermore, Verizon promotes these locally unavailable services, bundled with phone service, for prices lower than my neighbors and I pay for phone service alone.

From a consumer perspective, that strikes me as insensitive to say the least. After chatting to my neighbors I confirmed that I wasn’t alone in this perception (it turns out that Verizon is equally insensitive when it mails out paper bills, stuffing them with offers that are unavailable at the address to which the bills are mailed).

Verizon is arguably eroding customer sentiment and tarnishing brand perception with this behavior, yet we all know that the information required to behave differently is somewhere within Verizon’s data silos. I would argue that, by failing to use all of the information at its disposal to personalize the “My Verizon” website, the company is undermining its conversion efforts.

Clearly, the time has come to “un-silo” corporate data so that it can be used to improve conversion and brand sentiment, while simultaneously avoiding the perception that your brand is either insensitive or simply doesn’t have it’s act together.