Hint: Without Quality Data You’re Sunk.
Good Data Quality is paramount when it comes to meeting your business goals, but with the ever-increasing volume of data streaming in from social media and corporate applications, it can be tough to keep it all accurate and tidy. We get it. It’s no wonder some companies are experiencing a rapid decline in their ROI. Poor ROI combined with a weak economy causes many executives to question if spending money on a data quality strategy is really necessary. In short, it is.
The Gartner Group reports that poor data quality depletes a company of $8.2 million annually (on average) in wasted resources and expenses on operational inefficiencies, missed sales and unrealized new opportunities 1. Additionally, a research study conducted by Forrester discovered that a mere 12% of companies actually use data-driven intelligence to guide vital business functions and strategies 2. That means that 88% of you guys are just dealing with the waste, inefficiencies, and lost opportunities that muddy data generates. Ouch!
So, what can be done about it? Follow these 5 tips to prompt change in your ROI.
#1 Don’t Point the Finger at the IT Department. Data Quality is a Business Responsibility.
If you’re a c-level executive take responsibility of your data quality, or better yet, share it with another higher-level executive and merge your talents with the brains of your IT team. It can only benefit your company. By joining the minds of customer-facing processes and implementation, you’re killing two birds with one stone. Pairing these functions guarantees that your data goals and ROI will be met through supercharged line processes and operational efficiencies.
#2 Plan a Through Data Governance Strategy and Stick to It!
We all know that cleaning up dirty data can really eat away at your precious time, but as The Gartner Group and Forrester have highlighted, dirty data can erode your ROI as well. The trick here is to analyze your company’s data management strategy and develop a strategy to implement, because chances are there’s a problem with your process that’s leading to such messy records. Don’t know where to start? Hire a business intelligence company that specializes in auditing data processes, and allow them to poke around yours. I know that this sounds expensive, but it’s far more cost effective to address and correct your issues now than down the road when you’ve built up a nice little database…and possibly weeks of manual cleansing.
Once you’ve hopped on board with your chosen data management service (ehem, Cloudingo.com) and your data is made available, it’s important to start shaping a new governance strategy that focuses heavily on record creation. Obviously, when data is dirty from day one, all other records down the line will be affected. It’s probably wise for you to restrict the ability to create new records to a few well-polished and customer-friendly data stewards spanning marketing, sales, finance, service, product and customer relations to prevent too many instances of duplication, or false information. Restricting the ability to add new records does a few things for your company: first, it places the responsibility and integrity of the data with your stewards who assume the role of gatekeeper, enforcing the rules that drive the quality of your data. Secondly, by minimizing the number of users able to make new records, you’re simultaneously making your future cleansing process easier, and who doesn’t love that?
Don’t think you need to restrict the ability to make new records to just a few stewards? Ponder this: according to the Sales & Marketing Institute and D&B data, only ~4% of email addresses and contact data within customer files and CRM systems are accurate. This means that 96% of your data is bunk and any action that depends on this data is compromised, leading to a pile of waste and a paltry ROI.
#3 Join Data Houses and Enjoy the View
If you’re like most companies your customer data probably lives in one house, while your supplier data lives in another – blocking the beautiful view of the trees. Take the philosophy out of that sentence and what you’re left with is this reality: by keeping your data separated you’re concealing your company’s true potential, hindering future possibilities, and thwarting operational efficiency. Yes, you’re right, you need to join houses. By housing your data together – from both internal and external sources – will grant you a thorough understanding of your customers and how to make them happy. To do this every source of data must be collected, cleansed, validated, merged, improved, and linked into one complete and accurate system, so grit your teeth and bare it. If it still sounds grueling consider the rewards of enhancing your customer intelligence:
- By integrating account information you maximize revenue from existing customers and reveal new prospect opportunities.
- Through account intelligence can provide a map showing you how to best reach and serve your customers
- Insight on key suppliers prevents product/service delivery disruption and reduces unnecessary spending
- Customer intelligence is what drives a great business strategy and it can give you a competitive advantage over competitors
#4 Sales & Marketing Success and Quality Data Are Joined at the Hip
As marketing automation and quality data rises to new levels, so have customers’ expectations for pertinent and timely information. Even though that puts more pressure on companies to be at the top of their game, in doing so customers have highlighted a way for marketing and sales to work together, growing revenue and decreasing costs. Now, data-driven marketers play a more strategic role in maximizing the ROI of marketing costs – profiling customers and then targeting, nurturing and handing “buy-ready” leads to the right sales person. Since you’ve now joined data houses, sales can more effectively manage customer accounts to realize their full potential for up-selling, cross-selling, and suggesting appropriate service levels. Customer intelligence is indispensable to marketing and sales’ success in this data-rich marketplace.
#5 Trust That Data Quality ROI Will Deliver Measurable Results
It is downright impossible to build one universal formula for measuring the ROI of a data-quality initiative. In the end, it’s about choosing the metrics that matter most to your business (i.e. the ones that the senior boss man thinks offer the biggest potential for improvements.) If you want to smooth ruffled feathers, you should outline your key performance indicators (KPIs) that link data quality to ROI. KPIs that focus on business processes with the best plan for improving customer experience and loyalty offer the best opportunity to decrease costs, increase revenue and drive profitability. In all seriousness, we could run formulas all day to calculate data quality ROI. What it comes down to is the unique combination of intangible and tangible measures that paint the complete ROI picture.
The benefits to investing in data quality should be obvious. The importance of quality data is imperative to your business’ success and with data pouring in at a more and more rapid pace, you’ll need to develop a plan soon, or risk getting wiped out in the flood of information. Don’t let your ROI drown because you failed to strengthen your vessel and supply life vests. Take the time to develop a quality data management program and sail off into the sunset, instead. Now, doesn’t that sound better?
1. Gartner Group
2. Assessing Your Customer Intelligence Quotient, Forrester,