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Garbage In, Garbage Out – The Real Cost of Poor Customer Data

Garbage In, Garbage Out - the Real Cost of Poor Customer Data - Featured Image

How do you treat your customer … data?

Among the most important assets a company has are its customers. American business author, Michael LeBoeuf captures this succinctly “Every company’s greatest assets are its customers, because without customers there is no company.”

Despite this, small and large businesses treat their customer data with far less respect than they would ever display to their actual customers. If a company invests in building a relationship with its customers, why wouldn’t it have reliable and accurate information about them … the correct name, address, and phone number? In a recent research study by Experian the Effect of dirty data on business, most businesses, 84%, stated they experienced data quality challenges. Experian’s Data quality global research 2015, found 32% of U.S. organizations have inaccurate contact data within their database. See other rising trends with inaccurate customer data.

Let’s take a look at why this happens and the impact of dirty data on business. In my next blog, I will share strategies to effectively address poor quality data.

Why the data quality challenges?

We know that most organizations are suffering data quality issues because of how they collect, store, maintain (or do not) and use customer data. There are many reasons, and the Experian research found the biggest ones are:


Customer data is dynamic, i.e., people move, people change, etc., data goes bad. Marketing Sherpa says 2.1% of contacts go bad each month; after a year, at minimum 25.1% of contacts are not valid. Even with the lower mover rates today than in the past, the U.S. Census Bureau reported 12.0% or about 36.5 million people moved in 2012.

Why good quality customer data matters

1. Poor quality data impacts customer service and revenue. Almost all (97%) companies acquire email addresses and almost all (94%) companies attribute revenue to email marketing efforts. The reasons for improving deliverability are critically important:


2. Customer data has a direct link to effective operations, wherein 73% of organizations look to streamline operations to reduce cost. How do I know what processes need correction if I don’t know what’s important to my customers?

3. Lead generation is prioritized through quality information which impacts segmentation of customers, targeted service and interaction programs, real-time offers and lead follow-up. Poor email deliverability can even get company email programs blacklisted! Imagine using dirty customer data in your expensive CRM and marketing automation system to get blacklisted more quickly!

4. Attaining a single customer view for the company’s customer database is a basic step in maintaining accessible information to generate customer centric business intelligence, and create targeted marketing offers and messages.

5. Dirty data can make your customer database worthlessReachForce research, The Cost of Dirty Data ebook estimated that dirty data could represent up to 83% ($83,130/$100,000 = 83.13%) of the value of your customer database. This is an excellent resource in helping us to understand the volatility and cost of dirty customer data.




This perspective illustrates how valuable your customer data is!

How does your business treat its customers and their data? Give me your thoughts. In my next blog, I will take these insights and frame strategies on getting to quality customer data.

About The Author

Herb Young
From market research to marketing strategy, from information technology to new services development, Herb’s expertise covers a lot of territory, both for Marketing In Color clients and for the company’s internal needs, too. He holds a BS degree in business administration and a MS degree in marketing, both earned at the University of Arizona. In more than 30 years of marketing industry experience, Herb has helped develop the brands of numerous household names, for breakfast cereals, hosiery, smokeless tobacco, and dozens more products.
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