Looking to fix customer churn? First fix your data

Jim Conning, managing director, Royal Mail Data Services

What is the best way to tackle customer churn? According to our research – conducted among 185 marketers by DataIQ - the solution is to concentrate their efforts on acquiring new customers. Nine out of every 20 marketers told us that they addressed customer churn by bringing on-board new buyers. Other tactics include reactivating lapsed customers, which 17 per cent of marketers name as their primary goal, or getting existing customers to buy more - a tactic used by a similar number. 

While up-sell and cross-sell can maintain the bottom line, they can also disguise the underlying problem of customer loss. If we consider for a moment the primary contact channels which are used by marketing - and which depend on targeting data - we are likely to think of email and mail first of all. Our research supports this - 87 per cent told us they rely on email and 51 per cent on direct mail, both of which fundamentally demand accurate data for targeting, personalisation and delivery.

Get a core variable wrong in such data-driven campaigns and it could result in fewer of those ideal targets, talk to them using the wrong name or, worse still, never arrive. For every ten target records per thousand that suffer from a data quality issue, the campaign response rate will degrade by one per cent.

Marketers also told us that the quality of their contact data was more important than the timing of a campaign, personalisation and creative execution in delivering positive results. However, taking the decision to act and improve data quality is less commonplace. This is usually because it involves tackling some issues upstream in the organisation.

For most brands, their website is a primary data collection channel, both online and mobile. Website design is typically focused on ensuring a smooth customer journey, positive customer experience and search engine optimisation. That can mean data capture is ignored. It is often limited to just asking for an email address or based around a form that is not fit from a marketing perspective.

Similarly, customer contact centres - which nearly half of marketers tell us they rely on as a data source - are set up to deal with calls quickly and efficiently. That can mean opportunities to capture personal information from a caller are missed or inaccurate data goes into the system when an agent just selects the first option from a drop-down box. Direct sales can generate flawed data in the same way if the focus is on managing the transaction, leaving validation to happen at a later point.

As a result, 28 per cent of marketers are not capturing postal addresses and just 18 per cent record life events, such as a change of name or address. Both of those will impact on the effectiveness of marketing, either by degrading data quality or missing opportunities for an informed dialogue with the customer.

For marketers to achieve positive outcomes from their campaigns, the issue of poor data quality must be tackled. We have worked with clients who have found that 30 per cent of their customer data is unusable because of missing or incorrect data leading to examples where only 50 per cent of data can be matched to external targeting information.

The simple truth is that marketers can’t convert customers they can’t reach. Marketers know that quality, up-to-date customer data is a pre-requisite for campaigns to be effective. But if the business systems and processes, including data management and validation, are not in place to ensure that data is accurate, permissioned and actionable, then marketers will fall at the first hurdle.

Royal Mail Data Services is running a webinar in association with DataIQ, “How good data quality improves marketing effectiveness,” at 2pm on Thursday, 19th May 2016. Click here to register.

Please note that blogs are the sole view of the author and that they are not neccesarily the view of IQ ddg Ltd and should not be interpreted as advice. Please read our full disclaimer

Managing Director, Royal Mail Data Services
Jim’s role is to spearhead entry into new markets by harnessing the company’s trusted reputation and data expertise.