Bad data?whether purchased, gathered via download offers, or stored in your internal database?costs companies billions every year in wasted resources and lost productivity. In fact, the�Data Warehousing Institute estimates that data quality problems cost U.S. businesses over $600 billion a year. This is only the tip of the iceberg.
A new study from DemandGen Report has provided, for the first time, a basis to tabulate the impact of bad data on all areas of enterprise. Survey respondents not only pointed to marketing (66%) and lead generation (80%) as areas impacted by bad data, but also finance (30%) and customer relationships (54%). The DemandGen Report survey, conducted in October 2010, found that more than 62% of organizations rely on marketing/prospect data that is 20 to 40% incomplete or inaccurate. Additionally, almost 85% of businesses said/reported they are operating customer relationship management (CRM) and/or sales force automation (SFA) databases with between 10 to 40% bad records.
?Garbage in, garbage out,? so the old saying goes. When it comes to marketing programs, nothing could be more accurate. In fact, the increased efficiencies enabled by marketing automation systems will mean more garbage in and more garbage out. Just like the damage today?s landfills inflict upon the environment, the garbage produced by feeding marketing programs dirty data can exact a heavy toll on your marketing budget, sales productivity, your reputation and your company?s brand image.
In an era where people regularly migrate between companies, titles and jobs, dirty data has proliferated. There are signs, however, that organizations are becoming aware of the issues and beginning to understand the importance of scrubbing their data clean. According to Gartner, 30 million of the 138 million workers in the US will switch jobs over the next 12 months. With employee turnover at an all-time high, data expires faster than ever. It?s not just job change that is eroding the quality of your data, a research study from MarketingSherpa finds that nearly half of the respondents to B2B marketing campaigns DON?T give valid contact information. Less than 40% provide accurate phone numbers. No wonder your sales representatives are frustrated!
Conversion rates and other marketing metrics have an impact further down the funnel, but for many organizations dirty data has a more immediate impact on sales performance. In the DemandGen Report, when asked how they determine the impact of bad data on the company, 44% of respondents cited ?the ability of the sales team to reach and/or communicate with the right executives in a prospect organization.? The direct sales impact finished far ahead of ?accuracy of CRM system? (30%) and ?response rates to email campaigns (26%)?.
If you are basing your marketing programs on purchased title-based databases, list rentals, leads from online marketing campaigns (PPC and banner advertising) or even an in-house database that has not been updated and validated within the last six months, you are likely squandering marketing dollars and incurring costs you may not have considered. Some of these include:
- Lost revenue
- Wasted resources
- Lower productivity
- Damage to your credibility
- Risk of failure for marketing automation initiatives
- Fines due to compliance issues
- Inability to reach a prospect? by email and/or phone
- A contact record with incorrect information ?from name spelled wrong to incorrect address
- Incomplete or inaccurate records (company name, job titles, phone numbers)
- Non-current data
- Wrong company info or wrong contact data
- Dupes with inconsistent information
- Data which leads to the inability of our sales team to reach/communicate with the right executives at prospect organizations
- Bad email address
- Returned mail
- Fields that are empty/null due to poor capture techniques or contain other inaccurate firmographics
- Field complete but contains non-sense data: ?TBA,? ?TBD,? ?TBC,? etc.
- Inconsistently entered data
- Any data that wastes sales team time: a contact that no longer works at the company or a contact that is a bad fit but we don?t know it (because we don?t have industry, company size, or role appended to the record)
Making the investment in data hygiene tools and processes not only improves marketing campaign performance and increases the efficiency of the sales organization, it can also help define the ideal prospect and identify the best person to contact in an organization. The more relevant the data is that feeds your marketing programs or automation systems, the better and more powerful the results. To ensure you are achieving and reporting the best possible marketing program ROI, follow these tips for managing your data as it is introduced into and flows through your CRM and marketing automation systems:
- Take Ownership
Fragmented responsibility for data management is not just a productivity issue; it is one of the leading contributors to incomplete and inconsistent data. Dedicate a data steward whose job it is to oversee data collection and administration according to the established guidelines. - Establish Standards
Standardize data entry formats and requirements companywide to ensure critical fields are complete and formats are consistent. Empower your data steward to enforce these requirements and automate data entry points where possible when introducing data into your CRM and marketing automation systems. - Cleanse New Data
Never indiscriminately dump purchased lists or introduce the leads from list rentals into your CRM or marketing automation system without having a 3rd party validate the quality of each record. According to a 2006 study by MarketingSherpa, list rentals are one of the worst performing marketing techniques, so it is best to avoid renting or purchasing lists to eliminate the risk of marketing programs waste or blunders. - Make it a Community Event
Enlist your customers and prospects to clean and update their own data by using lead nurturing techniques. This isn?t as unpleasant as it might sound. By encouraging prospects to give you accurate data in steps, you can quickly and cost-effectively capture more accurate data for your marketing programs. - Be a Trend Setter
Monitor trends in your pipeline to identify opportunities for augmenting your data. It is important to monitor trends in your pipeline at least quarterly to identify market segments that present the best opportunities for revenue. This analysis will reveal areas in which you may need additional data to fuel marketing programs. - Don?t Be Afraid To Get Help
With today?s highly mobile workforce and employee churn at an all-time high, data becomes stale quickly. But you don?t want to waste your in-house talent to clean data. Partner with a reliable outsourcer to not only cleanse your data but to validate, augment, and refresh data periodically.
Poor data quality is a growing strategic issue within today?s companies. �Inaccurate and incomplete data drives up costs, hampers productivity, damages brand image, and can cripple a company?s competitive edge.
As the DemandGen Report study underscores, dirty data impacts all areas of an enterprise, with the most pronounced effects being felt in the sales and marketing departments. By taking steps to integrate intelligent database processes with their CRM systems, B2B organizations are gaining an edge on their competition by making sure their campaigns are reaching the right executives and their sales teams are focused on current and real prospects.
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Author: Andrew Hunt
*This post originally appeared on From Click to Closed - Inbound Sales and Marketing Blog and has been reposted with permission.
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