Most company leaders are aware of the importance of data to their business operations, but have you ever thought about whether or not you could trust your data?
84% of CEOs don’t know for sure that their data quality is good enough for that data to be relied upon.
Without a painstaking procedure in place to make sure that the data coming in is substantial and well-organized enough to say something noteworthy about the business, you could fall victim to all kinds of problems that could jeopardize your organization’s future.
Know the Consequences of Bad Data
Bad data can negatively affect your company in myriad ways.
The ones listed below are just a few that you should be on the lookout for.
A Bad Reputation
What people think of your company matters, perhaps now more than ever with the rising importance of customer satisfaction.
64% of buyers consider a company’s ability to offer a good customer experience to be more important to their purchase decisions than the cost of the products or services they’re buying.
Without good data, you won’t be able to offer the kind of service those people expect.
You might have a hard time understanding what they want without the context that good data can give you, and even worse, you might struggle to get in touch with them at all.
You might also notice some more concrete effects of a poor reputation, including but not limited to:
- An increase in negative online reviews, which may turn off up to 94% of your potential customers if they see them.
- A loss of customers willing to give you referrals, which decreases your overall volume of business.
- A dip in your email sender reputation, which will cause you to have a harder time getting your email marketing out to your leads.
Related : Why does contact data quality matter?
Missed Opportunities for Growth
Your contact data is your greatest asset when it comes to understanding your customers.
Through it, you can track exactly which types of people are most likely to buy your products.
When you know that, you can anticipate some of those peoples’ other needs as well, and that puts you in the perfect position to fill them.
Companies that use data to inform their business decisions have 4% higher productivity and 6% higher profits than companies that just guess at what their customers might like.
For instance, imagine that you’re selling IT consultant services.
With the help of detailed and accurate contact profiles, you might discover that your main customers represent small- to medium-sized businesses who have a fairly substantial budget at their disposal, but who are still figuring out what they need in terms of IT infrastructure. It’s a safe bet that many of these customers would be willing to purchase some of the basic software solutions they need from you, since they obviously trust your brand.
On the other hand, if you found that the bulk of your customers are from established companies who have the basics covered but are more interested in staying on the cutting edge of the field, you might have more luck tempting them with something like an AI platform.
Every business is different, and there are no universal moves that will always work to grow a business.
It all depends on the story your data tells you, and unless you’re taking care to keep your data quality up, you won’t be able to put understand what it has to say.
Shaky Business Objectives
Goals are extremely important to a developing business, and they are tightly linked to data.
The only way to tell if you’ve met your goals is to check your metrics, and that’s not going to work if the data they’re based on is disorganized, missing or flat-out wrong.
Beyond that simple function, though, a database with good data quality can also serve another role.
In the past, a business might have been stuck committing to a single strategy for months or even years before anyone could say if it had been a success or not.
Data can now be updated almost instantaneously as changes occur, and if your data quality is high, it can give you a roadmap to guide you as you work toward your objectives.
With it, you can observe your own progress as you go and make adjustments if something isn’t working for you.
You can also easily adjust to changes in your markets or sales that would otherwise take a toll on your performance.
One noteworthy study showed that 92% of businesses that tracked their performance metrics in real time were able to meet the objectives they set for themselves; only 64% of companies that did not were able to say the same.
Unnecessarily High Costs
Getting good data isn’t free
But leaving bad data to fester in your records is even more expensive ⚠
While it’s impossible to say what the exact figures are for each company, bad data is probably responsible for losses somewhere between 15% and 25% of revenue for most.
Part of this is due to the lost opportunities described above, since you might have significantly increased your revenue if you had been able to go down those paths.
The rest has more to do with the direct consequences of bad information.
Consider things like having to ship an item to a customer twice because you had their address wrong the first time, or getting a large order cancelled because your reps had the wrong phone number listed and couldn’t return a customer’s call.😱
All these losses add up, and they could be avoided by paying some extra attention to your data quality.
Putting a Solution In Place
You don’t have to wait for data quality to have negative effect on your company to do something about it.
As a leader, you have the power to intervene in this matter, and you should. There are several steps you can take to keep your data quality under control before it causes you any problems that would be difficult to reverse.
Understand What Data Quality Means to You
The first step to fixing any problem is to define it.
What does quality data look like in your company? 🤔
You need to answer this question, but to do that, you’ll have to first ask yourself a series of smaller questions, including:
- What do you need to know about a contact?
- How frequently might this information change?
- What standardized data formats do you want to use?
- Should information be entered manually or automatically?
- Is everything consistent across each database you have? Could the information in each be synthesized together if that was needed?
The answers to these questions (and any others that are relevant to you) will help you figure out what the initial entries on each profile should look like and how often they need to be reviewed for continued accuracy.
As a leader, you should always be aware of the data quality guidelines your organization is using, so be sure to ask for regular updates if any of these procedures change or if any new information surfaces that might have implications for your data quality policies.
Set Up a Data Quality Framework
One of the most important things to remember about data quality is that it’s more of a process than an achievable goal.
Even if you get to the point where you have good data that you can use to propel your company forward, your contacts’ data is constantly changing, and that means that it needs ongoing upkeep.
You also need to make sure that your organization’s data quality standards remain consistent over time so that no new entries go into your records full of errors.
To do this, you’ll want to outline a handful of data-related roles and hand them out to your staff members as part of their responsibilities.
It should be noted that it’s very common for companies to fall behind in this area.
39% of firms have a dedicated Chief Data Officer overseeing these matters, but 24% have no specific staff members taking responsibility for their data strategy at all.
Getting this problem sorted out now can put you ahead of the game and may help you to push past your competitors.
Optimize the Cost of Data Quality Management
No company has unlimited resources, even when it comes to something as important as data quality.
Even with some of your existing staff working on the issue, though, this initiative is sure to have some extra costs attached to it, and you’ll want to keep those down.
The less expensive you can make the contact data quality maintenance process, the better the chance that you’ll stick with it over time even when money is tight.
Hiring a permanent employee costs businesses an average of $4,129 on top of the wages that person will be paid, and it’s very difficult to say what it will cost to try to engineer your own data quality tools.
It often makes more sense to get the help you need from an outside source rather than trying to develop your own internal solution or adding additional members to your team to try and take care of it.
Sit down and go over the true cost of all your different options; you might be surprised at what you find.
One of the best things you can do to monitor your data quality and motivate yourself to keep it up is to figure out the monetary value of the data your company owns.
It should usually fall somewhere between 5 to 11 times your annual revenue, but where you fall on that scale depends on factors such as your projected growth rate, your average customer retention and how well you’ve broken down the information you have into useful insights about the type of people who buy from you.
Decide how you’d like to calculate yours and keep that number in mind when you work on your data quality; it’ll give you a better idea of the importance of what you’re doing.
You can also see the impact of good data in your overall revenue numbers.
High numbers are always tied to high quality data.
If your numbers start to drop, it’s worth investigating if there’s a data quality problem going on somewhere that is causing this choppy performance.
If they stay strong, you’ll know things are probably still okay on the data front.
Remove Your Company’s Data Quality Barriers Now
Data quality is a huge factor in the success of every modern business whether its leaders know it or not.
Now that you’re aware of that, you’re in the perfect position to take action and do whatever it takes to keep your contact data quality management procedures going. Still not convinced that you should?
If you’re looking for a more quantifiable demonstration of what good data quality would be worth for you, take advantage of our helpful ROI calculator for a free estimate of how much you’d stand to profit by doing so.👇
You might be surprised by the astronomical difference it can make.
There's always more to learn about data quality, and we'll be back with more to share with you next time.
If you want something to tide you over until then, you can join our community for more insider knowledge as well as tips, guides and other pieces of content you can use to give your business an advantage.