Companies are losing customers to competition because thirty-five percent of end user marketing departments have no confidence whatsoever in the quality of their customer data, according to research commissioned by data integrity specialists, Datanomic Ltd.
The survey, which was commissioned by Datanomic and conducted by eMedia Research during July and August of this year, found that 85% of companies admitted to having issues relating to data integrity, with only 15% saying they were able to measure its impact. Also apparent from the study, was a huge percentage, 85% of companies admitting to errors in their own customer data with only 11% of respondents claiming they were extremely confident of the accuracy of the data held in their customer databases.
The research surveyed more than 120 senior managers responsible for customer management, including, Managing Directors, Marketing Directors and CRM Managers from UK organisations with customer bases ranging from 10,000 customers to in excess of a million customers.
“The findings give a worrying view into the poor state of customer data quality and the misconception that errors in customer data are harmless to the business,” said Dr Jonathan Pell, CEO of Datanomic Ltd.
“It seems ignorance is bliss when it comes to customer data quality. Our survey found 68% of respondents have no means whatsoever of measuring the cost of poor data quality to the business, with an additional 17% unaware of any means of measurement in place, yet industry figures show that poor data quality costs businesses as much as 25% of their total revenues, directly impacting bottom line profitability. In some cases, this can mean that companies are inflicting a loss on themselves every time they use
The survey also found that although 34% of respondents believe that data quality is fundamentally critical to their business, 34% of companies don’t have any third party tools or in-house systems in place to address data quality issues. Only 11% of companies surveyed had an enterprise governance framework in place to address customer data quality issues, and 39% said it was up to individual employees to manually de-duplicate or amend customer data to keep it accurate. Meanwhile 32% admitted that the quality of the data in their CRM systems had a negative impact on the business.
“I think many companies have simply accepted a low standard of data quality as being the norm without really making the link that it is costing the business money,” added Pell. “Analysts cite as much as 75% of corporate data held by most enterprises is out of date, inaccurate or ineffective for marketing purposes. Customer data has been described as a company’s second most valuable asset. Outdated, invalid or duplicated customer records, or poorly structured data in CRM systems, detracts from the value of the business as well as the quality of the asset that is a company’s customer data, and is an unnecessary and avoidable expense.”