When times are tough, businesses have to work harder and smarter to stay in the game. This is often easier said than done, especially in the face of tightened budgets. Unfortunately, the financial pressures aren’t likely to ease in the short term. It’s not all bad news though.
The wealth of customer data that already exists (and continues to grow) within any business can help alleviate the pressure - as long as it is accurate and of high quality. Captured correctly, businesses will find that data can drive efficiency, profitability and growth - and can even be used to liberate lost budgets.
According to research conducted by Dynamic Markets on behalf of Experian QAS, UK businesses are not taking full advantage of the data they currently possess. Despite a high level of understanding with regards to the issues of data quality and accuracy, actually achieving it continues to be a challenge.
When measuring companies’ attitudes to data quality, Dynamic Markets confirmed this challenge and also found that over 90 per cent of companies believe that their customer and prospect data may be inaccurate. Despite a growing understanding of the value of data, it seems the problem of inaccuracy and unreliability is increasing rather than improving.
Inaccurate data can have a severe impact on budgets - around £1 in every £6 (up to 18 per cent) of departmental budget is wasted by UK companies on lost contacts, missed sales opportunities and duplicated mailings. For any organisation, this represents a significant waste of valuable marketing resources and potential budgets.
Companies are working to reduce this budget wastage, as the report makes clear, with nearly two-thirds of respondents having set themselves targets to improve data accuracy. Businesses see different ways that data accuracy can reduce budget waste, with the majority citing increased efficiency as a primary objective. All businesses want happy customers, so it is not surprising that improved customer satisfaction was high on the list of priorities. As many as 80 per cent of respondents operate loyalty schemes and two-thirds believe that inaccurate data has impacted negatively loyalty schemes.
Human error is the main culprit when it comes to poor data quality. However, companies are increasingly realising the benefits of technology, which is demonstrated by the finding that seven in 10 companies are using either point of capture software or back-end contact data cleaning solutions. However, only 15 per cent have completely automated systems.
Investing in data certainly represents value for money - the research confirms the growing sense that it pays off. Three-quarters of UK businesses have invested in upgrading their data management system in the past two years and the rewards can be rich: nine out of 10 of UK companies that did so have seen an associated increase in profits of £792,980, according to the research.
On average across the whole survey - including the US and France - large companies invested more than £500,000 in data, medium-sized companies £248,441 and smaller companies £141,795. Average investment for all companies was £285,349.
For a UK business, that is a return on investment of over 275 per cent, which is clearly a major impact on the bottom line and frees up budget to help open new doors. Add to this a better customer understanding and increased loyalty and it is easy to see why investing in high quality data makes perfect sense.