Why data problems are proving costly for UK marketers

As marketers work to an increasingly complex and exacting set of performance metrics, new research from Royal Mail Data Services into the use and management of customer data reveals that UK organisations estimate poor quality customer data is costing them an average of 6% of their annual revenues. The myth that resolving data quality is a one-time fix is partially to blame.

The marketers we surveyed agree that data quality has the biggest impact on campaign response and conversion rates, yet nearly all (91.4%) say they are still plagued with data-quality issues.

As businesses work to comply with the European Union’s General Data Protection Regulation (GDPR) re-permissioning requirements by May 2018, today nearly three in five marketers (58%) report having concerns over the compliance of their in-house customer data. A similar number are shying away from using third-party data because they don’t trust that it will comply with the EU’s new, tougher data-permissioning standards. These new guidelines mean that unless organisations act now to improve their data quality, they will face a shortfall in usable, permissioned customer information in less than two years.

Resolving data issues at the point of capture

With such a dim view of the state of their data, it’s clear that marketers must make big changes to improve customer data quality and get ready for new permissioning standards.

Untangling this web starts with recognising the proliferation of sources that capture a variety of customer data across the organisation. Digital marketing leads in data capture, with websites (86.9%) and mobile web (48.5%) offering daily influxes of new customer information. Transactional data collection is also on the rise. Two-thirds of marketers (64.6%) capture data from direct sales, up from just over half (55%) last year. Both sources provide data that either comes with first-party consent (direct sales) or can be leveraged to gain it (from websites). Direct customer contact remains an important data source for nearly half of companies, via either face-to-face (48.5%) or contact centres (45%).

With so many active data sources, responsibility for data management is often shared across multiple functions without consistent data collection processes. While marketing leads in setting data strategy and collection for most companies (53.5% and 49.5%, respectively), CRM functions, customer service, sales and e-commerce often collect customer data as well. For some organisations, centralised data management operations or IT take on this role (27.7% and 22.8%, respectively).  

As businesses prepare for stricter compliance and re-permissioning rules, all functions responsible for collecting customer data must work with their legal and compliance teams, who manage data privacy and permissions in nearly half of surveyed organisations (44.6%).

The complexity of internal data management structures seems to be compounding the problem. In the three years since Royal Mail Data Services first conducted this research, we have seen a steady rise in the number of marketers reporting problems with incomplete, out-of-date or duplicate data. However, 65% of organisations still only cleanse their customer data once a year, have no processes in place at all or simply don’t know how often their data is cleansed.

The business case for better data management

Improving customer data quality starts at the top. Marketing and data teams need to work alongside their legal and IT colleagues to present clear business cases to tackle the data-quality problem. Looming GDPR regulatory deadlines provide organisations with the opportunity to review their data management practices and processes and make the necessary investments now to overcome long-standing customer data management challenges.

With more than seven in 10 organisations starting their data-quality journeys with incomplete, inaccurate or out-of-date customer data, marketers should consider working with a trusted partner to first validate their existing customer data, and then create a universal process for automatically validating all incoming data at the point of capture. Once existing data is validated, setting continuous data-cleansing and enhancement processes will keep customer information accurate, permissioned and compliant over the long term. Using compliant and permissioned third-party customer contact data can help marketers keep contact data up to date as customer information changes. Finally, companies must put re-permissioning strategies in place now to ensure GDPR compliance ahead of the May 2018 deadline.

Making sense of historic, persistent data-quality problems can seem overwhelming, but with professional guidance and consistent commitment across the business, 2017 can be the year organisations finally shut the door on poor-quality customer contact data.

Editor’s note: You can find out more about the research findings here.

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