Updated for 2021
Data is the cornerstone of any successful marketing strategy. Data tells us about our customers and prospects, how to personalize the customer experience, which channels they prefer, and informs every touchpoint along the customer journey. Despite the importance of utilizing high-quality customer data to fuel new revenue streams and ROI, marketers continue to see data quality as somewhat of an abstract concept. After all, it is difficult to measure, challenging to prove the benefits of investing in data quality measures, and often seen as a time intensive project for which there is no budget.
Whether or not we are paying attention, poor quality data still exists and will continue to undermine even the best laid out marketing strategies. We have all heard of GIGO (Garbage In, Garbage Out), so what we may not be aware of may be causing some serious damage in lost revenue, damaged customer relationships, wasted marketing expenses, and any number of lost opportunities.
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In a survey by O’Reilly, few organizations have dedicated data quality teams. Just 20% of organizations publish data provenance and data lineage and according to the research, most of those who don’t say they have no plans to start.
Industry standards place data decay at an average of 2% per month so over time, the data sitting in your systems will go bad as customers move, change phone numbers, get divorced or married, and so forth. Beyond this natural decay of data, respondents to the O’Reilly survey indicated that data quality issues included poorly labeled data, too many data sources, and inconsistent data.
When data quality is improved, the business value is significant. In a study by Blazent, findings when data quality improved included:
- 50.5% – increased revenues
- 48.5% – Reduced Costs
- 46.5% – Less time spent reconciling data
- 46% – Greater confidence in analytical systems
- 43% – Fewer errors
- 40.5% – More accurate orders
Informatica, in partnership with Dun & Bradstreet, engaged Ascend2 to conduct a survey on the state of data-driven marketing, how marketers are using data, and their challenges to success. The Data-Driven Marketing Trends Report findings show data quality as the most challenging obstacle to data-driven success.
Personalizing the customer experience was cited by 58% of survey participants as a key objective for data-driven marketing. Other important objectives included targeting individual market segments (50%), measuring data-driven ROI (49%), and acquiring new customers (41%).
In Validity’s State of CRM Data Management 2020 report, 44% of respondents estimated a loss in revenue as a result of poor quality CRM data. The loss in revenue ranges from 5%-20% of total revenue and 42% don’t know either way. The survey also revealed that 95% of the survey respondents reported having at least some CRM data quality issues. The most common data quality issue impacting CRM effectiveness is missing or incomplete data (69%). Half of the respondents also are struggling with duplicate data and incorrect data, followed by expired data (41%).
Data Quality Measures
Today’s customers interact and engage with brands on the go, through multiple channels, and at the time of their choosing. Data must be continuously monitored and improved just as quickly to keep pace and stay relevant with customers and prospects. To stay competitive in this complex and rapidly moving landscape, a report by Informatica revealed that 80% of the most-successful data-driven organizations outsource all or part of their data quality improvement initiatives.
Furthermore, according to the report, “Thirty-nine percent of companies with high data quality standards cleanse their marketing data on a frequent basis (in real-time, daily, or weekly) in an effort to optimize quality. Nearly 1 out of 5 best-in-class companies (19%) use real-time data validation to maintain the highest data quality standards.”
Real-time data validation controls can also be integrated into online forms, using rules to check the validity of data before it is entered into a marketing system. For example, verification services on web forms, CRM systems or order entry systems can instantly verify and correct phone numbers, confirm that the address entered is deliverable and conforms to USPS address standards including indicating whether a suite, unit or apartment number may be required, and validate the email address as deliverable including auto correction of some common typos.
In the research by Validity, over 90% of the study participants are taking at least some steps to improve their CRM data quality.
Business Lost Due to Poor Data Quality
One of the most alarming findings from the Blazent study was that an astounding 94% of the survey respondents believe that business value is lost as a result of poor quality data. “65% of respondents believe that 10-49% of business value can be lost due to poor data quality, while 29% of respondents said 50% or more of business value can be lost. Only 6% of respondents asserted that no business value is lost as a result of poor data quality. Thus, poor data can considerably diminish productivity and the quality of results.
Marketers are finally starting to take notice of the major impacts– both negative and positive – that data quality has on revenues and business growth. The good news is that investments are increasing for data-driven projects. Over a quarter of organizations (26%) are increasingly their data-driven budget significantly, with an additional 46% increasingly marginally. In an age where data has truly become the defining factor for a company’s success, smart marketers are making the investments now to plan for a successful future of growth and revenue streams.
Contact us to learn more about how Porch Group Media can transform your data into a strategic asset.
You might also be interested in: The Importance of Data Quality in Your Email Marketing.
