How to stop data decay.
Exploring the value of data, the cost of poor quality data and how to prevent data decay…
In my third post in this six part series exploring ways to extract commercial value from your data, I’ll focus on data decay and how businesses can effectively audit and maintain the quality of their B2B customer data.
Research shows that B2B customer data decay happens at a rate of 3% per month. This means, over 12 months, up to a third of your data will become out of date – unusable and potentially even non-compliant.
The quality of data directly correlates to a brand’s marketing and sales performance, and in turn, financial success. In 2006, British mathematician Clive Humby coined the phrase – ‘data is the new oil’ – I couldn’t agree more.
Good quality data should be one of your company’s most valuable assets. It’s essential to unlocking sales potential. But there are two ends to this spectrum. And if the data you hold is bad quality, it will negatively impact marketing and sales performance and risk your compliance.
A study conducted by Gartner in 2021 estimates poor data quality costs large organisations $12.9m (£9.9m) every year. So if good quality data is the new oil, bad quality data could be described as the new toxic waste.
With this in mind, I’ll now explore the impact poor quality data has on a brand and share advice on how to monitor, measure and improve its quality.
The impact of poor quality data.
The financial implications of poor quality data are clear. But what is the wider impact?
A major compliance risk.
Out of date, poorly managed data poses a huge compliance risk for businesses. The fines from the ICO are eyewatering – £17.5million or 4% of annual global turnover, whichever is greater. Bad quality, out of date data is much more likely to breach GDPR rules, with lawful basis and a clear audit trail called into question by the ICO.
Domain reputation.
Email deliverability impacts your sender reputation score. A lower score increases the likelihood of email service providers classing emails from your domain as junk – further impacting email deliverability.
In other words, hold poor quality data and you’ll face a Catch 22. Sure, you might have a huge database that you contact regularly, but every time you do your domain reputation nosedives, leading to even higher bounce rates.
Market opportunity.
As I highlighted in last week's post, to implement an effective data strategy an organisation must first measure the market opportunity, audit existing data and identify the gap.
Without a realistic overview of your existing data quality, you’ve no chance of building an accurate view of the potential your data has. If you hold outdated, uncontactable contacts, it’s impossible to correctly identify the gap between your existing database and the true size of the market opportunity.
How to improve data quality.
Now to look at ways to improve your data quality…
Data accountability.
Set accountability
Make the relevant teams and individuals accountable for data quality. Include data quality in individual KPIs, monthly performance reviews and annual objectives.
Set expectations.
Document and communicate data quality standards for each department. Give marketing, sales and service departments clarity on what they are responsible for and encourage them to work together to achieve and maintain these targets.
CRM structure.
Structure your CRM intuitively, making it easy to use. The average CRM system has over 300 visible fields for marketing, sales and service departments to update. By only showing the user what they need to see to do their job, you’ll make life easier for whoever is using it and, in turn, see an increase in the data captured.
Data audit process.
External data sources.
Don’t hesitate to use external data specialists to help keep data up to date. Providers like Dunn & Bradstreet offer integrations with CRM platforms (such as Salesforce) and can be useful in keeping high level company information – whether addresses, financials or company directors – up to date.
Monitoring.
Report on data quality at least once a month. Track and measure key data quality indicators such as field completion, last updated date and next scheduled activity date. Provide an overall data quality score and trend analysis for senior management. Make sure you can break the data down – key in spotting any isolated issues and addressing them with the relevant department or individual.
Self service.
Provide the right tools and platforms for customers to audit their own data, saving your marketing and sales teams time. For example, a portal that allows customers to book meetings or access contracts, also acts as an effective data capture tool that can update business-critical information.
Data hygiene strategy.
Email bounces.
Open rate and click-through are usually seen as the most compelling email marketing stats, but for me, email bounces are the most useful source of data. In most cases, it means the individual you have emailed no longer exists at the organisation – giving your sales team a reason to reach out, find out their replacement and update the CRM.
Contact cycle.
Create a minimum contact cycle for your prospects and customers. This shouldn’t be a one-size-fits-all strategy, though. For instance, you might need to contact customers monthly or even weekly – prospects, perhaps quarterly or even annually. Regardless, with a minimum contact cycle in place, businesses can manage and measure consistent contact across a large volume of data.
Data quality playbook.
Have a planned way of dealing with poor quality data and fixing it. Accept that data decay is inevitable, determine when you’ll cut your losses and ditch bad data and if and when there’s a requirement or opportunity to fix it – and finally, how you’ll go about doing this.
Final thought.
Managing data quality is an ongoing process. Take your eye off the ball and you’ll be amazed at how quickly it can deteriorate and how hard it is to wrestle back control.
Poor data quality has a massive business cost. But data quality isn’t just essential to getting commercial value from your data, it also holds the key to the success of your marketing and sales teams.
Next up, I’ll ask the question – so what? You’ve nailed your data culture and strategy, implemented a robust auditing and management process, but how do you start to unlock commercial value from your data and use it to answer the big questions?
Want to hear more?
To receive regular insight, updates and advice, simply sign up to our newsletter.