LONDON: Poor-quality customer contact data could be costing UK organisations almost 6% of annual revenues, a new study has claimed.
A survey of 272 senior marketing, data and analytics practitioners for Royal Mail Data Services, the specialist data business of Royal Mail Group, found they put good-quality customer contact data ahead of other factors – including segmentation and targeting, timing, personalisation, creative design and life event data – as having the greatest positive impact on campaign response and conversion rates.
That makes intuitive sense as no matter how well marketers can deliver on the other factors, they mean little if the contact data is wrong.
Respondents were asked to estimate the financial impact of poor quality customer data on the annual revenue of their business. This averaged out at 5.9% and excluded the third who answered "don't know".
This is the third annual survey Royal Mail Data Services has undertaken and it noted that some data issues were getting worse rather than better. Specifically, these were duplicate data (up 22% in the last two years), incomplete data (up 13%) and out-of-date data (up 12%).
And despite the importance attributed to data, 37% of businesses lacked any formal processes for cleansing their data. Nearly one in five (19%) did not validate customer contact data at the point of data capture.
Legacy IT systems appeared to be a particular pain point, with 38% of those surveyed blaming these for thwarting efforts to improve the quality of customer contact data.
Nor has a high rate of churn (20%) helped matters; in fact, customer acquisition remains top of the marketing agenda, with 52% of organisations saying this is their biggest challenge.
"Marketers need to work harder to build value in the minds of their customers and stop them from moving on to a new brand or provider," said Jim Conning, Managing Director, Royal Mail Data Services.
"Good-quality customer contact data is critical to tackling both these challenges," he added, but he observed a lack of consensus within organisations about how to approach the data problem.
"Breaking down silos and ensuring that marketing, data and IT work together to tackle the data-quality challenge should be top of the agenda for any business," he stated.
Data sourced from Royal Mail Data Services; additional content by Warc staff