Data quality is more than just a numbers game
While there are many people and organisations that have suffered and will continue to suffer in this recession, there will be the inevitable silver lining. In this case, one of the most significant developments has been the rise in importance of data quality. Previously the concern of a select few within an organisation, I'm glad to say that the issues around data quality has risen up the corporate agenda and is now front-of-mind for many marketing teams.
While there are undoubtedly many other driving factors, the "economic doom" of the past year has brought renewed focus on one of the key benefits of positive quality data, namely return on investment. It's well documented and widely accepted that marketing budgets in the main are slashed during financially difficult times. But coupled with the falling response rates of direct mail and the rising cost of mailing and printing production, brands have found themselves in a position where arguably the ROI on data quality is not nearly as compelling as it was five years ago.
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One obvious response to this is to ensure that you're making the most out of what customer data you do have. Indeed, the old adage that it's five times more expensive to recruit a customer than retain one has never been more apt. Given that a brand's database of known customers and prospects is one of its most valuable assets, it makes economic sense to ensure that it remains as accurate and up-to-date as possible.
Customer data does typically decay at a rate of between 7 and 15 per cent per annum, therefore simple mathematics dictates that, if you can strip this out through regular data cleaning and suppressions, response rates will improve, costs will go down, ROI will go up and customer annoyance will be reduced.
In addition, data quality safeguards a brand's investment in other areas of its data marketing programme, for example, the single customer view. Many brands have invested heavily in obtaining and marrying huge volumes of variable customer data in order to execute highly personalised direct mail campaigns.
However, the resultant improvements in ROI rely upon the recipient actually receiving the mailing free from basic errors. Protecting one's investment goes beyond technology and processes - it extends to the brand identity itself. Millions are spent on advertising and marketing so consumers perceive a company's offering in a certain way, yet mistakes in mailings can do untold damage. Misspelling names, mailing the deceased or people who have moved can make a brand look out-of-touch, sloppy and wasteful – a cardinal sin in these environmentally-conscious times.
In exploring the fundamental drivers of data quality, we can't ignore the developments within the data industry itself. Suppression and data cleaning have historically been relatively expensive. However, improvements in technology have seen software prices fall and usability improve, enabling more and more companies to take a more hands-on approach to the management of data.
Improved affordability combined with the greater availability and selection of data cleaning software and services on the market have meant that organisations and brands of all sizes can process data on-demand and in a way that suits their individual budgets and needs. Likewise, suppression files that were once the sole domain of the owners and bureaux have become accessible to companies in the form of pre-approved solutions.
As budgets become stretched, brands need to fight for every customer while keeping costs to a minimum. To put it simply, they need to mail less, but mail smarter and cleaner. Effective data quality strategies enable costs to be cut, best practice to be adhered to and warm and cold mailings to produce winning results.
Whatever the solution used – in-house, bureau or online - long may the data quality revolution continue!
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