Reverse ETL: how to put your behavioral data to action

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This is an opinion article by Tejas Manohar, CEO at Hightouch.

With innovations in warehousing technology (like Snowflake) and the rise of best-in-class analytics tools that form the ‘modern data ecosystem’ (like dbt), the data warehouse has fast become the single source of truth for many organizations, capable of keeping internal teams informed and powering sophisticated data use cases

Solutions like Snowplow enable companies to capture and manage their behavioral data, delivering rich, granular data into the data warehouse at scale. But the next question is: what do you do with that data in your warehouse? Behavioral data sitting in the data warehouse is a missed opportunity. It’s worth considering how best to surface this data and ensure it gets to the tools and teams who need it most.

That’s where Reverse ETL comes in.

What is reverse ETL?

“Reverse ETL is the process of copying data from a cloud data warehouse to operational systems of record, including but not limited to SaaS tools used for growth, marketing, sales and support.” – Tejas Manohar, CEO of Hightouch

Reverse ETL is necessary because your data warehouse — the center of your data stack that serves your organization — has ironically become a data silo in itself. Without reverse ETL, your business’s core definitions only live in the warehouse.

You are already building key definitions in SQL on top of your data warehouse. Your key definitions such as lifetime value, Product Qualified Leads (PQLs) and Marketing Qualified Leads (MQLs), propensity score, customer health, Annual/Monthly Recurring Revenue (ARR/MRR), funnel stages, and more. Sure, you can easily create reports and visualizations using this data in BI tools or SQL, but these insights are much more powerful if they drive the everyday operations of your business teams across sales, marketing, finance, and more in the tools they live in.

Use cases of Reverse ETL

Now that we’ve established reverse ETL as the process of copying data from the data warehouse into operational systems, let’s consider what can you accomplish with Reverse ETL.

There are 3 primary use cases for Reverse ETL:

Reverse ETL enables Operational Analytics

Reverse ETL solutions free behavioral data from the data warehouse for business teams to use it in various tools like:

Reverse ETL enables Data Automation

In any organization, there are a high number  of manual requests for data and CSV files floating around and with any manual process, automating the process can save valuable time and resources. Here are a few common examples of everyday data requests from various teams that can be automated with Reverse ETL:

Reverse ETL enables In-App Personalization

As users increasingly expect highly personalized, streamlined journeys, it’s incumbent on data teams to find ways to bring relevant data to the in-app experience.  Reverse ETL enables you to send behavioral data to your  application, enabling you to personalize the experience for your customers. 

Let’s say you’re an e-commerce company. Your data science team calculates a score on top of the data warehouse or data lake describing the user’s likelihood of buying a product . Your product team wants to drive more purchases by offering discounts to users who are deemed unlikely to make a purchase. Since your data warehouse is too slow to serve user-facing experiences, your engineers can use Reverse ETL to move the propensity score to a production database to serve customers personalized in-app experiences in real time.

Or, let’s say you’re a B2B SaaS company. Your customers keep asking to see their credit allotment inside of your web app, but that data lives in Salesforce. Your developers don’t want to integrate with Salesforce and keep up with their API changes. Luckily, chances are that Salesforce data is already in your data warehouse (via an ETL tool like Fivetran). Your app can then show your customers their billing information just like any other user data.

Snowplow and Reverse ETL 

Reverse ETL solutions like Hightouch, alongside tools like Snowplow to capture and manage your behavioral data, are growing in prominence as a way to close the loop on the data lifecycle and help you get more from your data asset. To learn more about how Reverse ETL and Snowplow can work together, check out the next post in our series: Why Your Data Warehouse Should Be your CDP (Customer Data Platform). 

Our ad platform transfers have officially switched from daily manual uploads to Hightouch syncs and it is a beautiful thing. I deleted the calendar notification that wakes me up and reminds me to upload files every Saturday and Sunday and it is a very happy thing.

– Mallory, Marketing Ops at Lucid

Here are some ways companies are activating their data using Reverse ETL solutions: 

Hightouch lets your data warehouse power your CRM, marketing, and support tools. Reach out to Tejas Manohar to learn more.

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