Organisations are still operating with poor-quality customer contact data and this is costing them six per cent of their annual revenues, says Jim Conning, managing director of Royal Mail Data Services.Capturing and keeping customers’ attention has never been more difficult, or more important. But the third annual research report into the use and management of customer data from Royal Mail Data Services reveals that UK organisations are still operating with poor-quality customer contact data. The research finds that it’s costing organisations an average of 6% of their annual revenues.

Despite reporting that quality data has the biggest impact on campaign response and conversion rates, nearly all marketers we surveyed (91.4%) say their organisations are still plagued with data-quality issues. The myth that resolving data quality is a one-time fix is partially to blame.

It is no surprise that, working with inaccurate or out-of-date customer contact data, UK brands lose one in five customers each year on average, a trend that has been on the rise since 2014. More than half of marketers (52%) say their biggest struggle is to acquire the new customers necessary to fill that “leaky bucket”.

Poorly managed customer data is increasingly seen as a cost to the organisation, particularly in light of looming General Data Protection Regulation (GDPR) re-permissioning standards. These standards could mean that unless organisations act now to improve their data quality, they will face a shortfall in usable, permissioned customer information in less than two years.

Assessing the data-quality issue?

Untangling this web starts with recognising the proliferation of sources that capture a variety of customer data, which needs to be permissioned, validated, cleansed and managed. Digital marketing continues to lead in customer data capture, with websites (86.9%) and mobile web (48.5%). Direct customer contact continues to be an important data source for nearly half of companies, either face-to-face (48.5%) or contact centres (45%). Transactional data collection is also on the rise. Two-thirds of marketers (64.6%) capture data from direct sales, up from just over half (55%) last year.

But with so many active data collection channels, responsibility for data management is often shared across multiple functions. While marketing leads in setting data strategy and collection for most companies (53.5% and 49.5%, respectively), CRM, customer service, sales and e-commerce are all responsible for managing customer data as well. For some organisations, centralised data management operations or IT take on this role (27.7% and 22.8%, respectively). As businesses prepare for stricter compliance and re-permissioning rules, every function that collects customer data must also work with its legal and compliance teams, which manage data privacy and permissions in nearly half of surveyed organisations (44.6%).

The challenges associated with improving the quality of customer data don’t stop at data collection and data management. Accurate, up-to-date customer data also has a positive impact on overall customer experience. In the three years since we first conducted research into the use and management of customer data, we have witnessed a steady rise in the number of marketers reporting problems with incomplete, out-of-date or duplicate data. However, today 65% of organisations cleanse their customer data just once a year, have no processes in place at all, or simply don’t know how often their data is cleansed.

Finding a path forward

Efforts to improve the quality of customer contact data must start at the top. Marketing and data teams need to work alongside their legal and IT colleagues to present clear business cases to tackle the data-quality problem. Looming regulatory deadlines give marketers a mandate to educate leaders on the organisation’s current data challenges and make the necessary investments to overcome long-standing customer data management challenges, in order to improve marketing performance, drive business growth and comply with the GDPR.

With more than seven in 10 marketers reporting incomplete, inaccurate or out-of-date customer data, organisations should first consider finding trusted partners to help validate their existing customer data, before putting in place universal processes for automatically validating all future incoming data at the point of capture. Once existing data is validated, businesses need to create formal, continuous data-cleansing and enhancement processes to keep customer information accurate, permissioned and compliant over the long term. Using compliant and permissioned third-party customer contact data allows marketers to ensure contact data is up to date as customer information changes. Finally, all organisations must work now to put re-permissioning strategies in place to ensure GDPR compliance ahead of the May 2018 deadline.

Making sense of historic, persistent data-quality problems can seem overwhelming, but with professional guidance and consistent commitment across the business, 2017 can be the year organisations overcome the issues of poor-quality customer contact data once and for all.

You can find the full research here.

By Jim Conning, managing director of Royal Mail Data Services

GDPR Summit London will help businesses to prepare to meet the requirements of the GDPR ahead of May 2018 and beyond.

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The GDPR Summit London has been specifically designed for business generalists rather than data protection or privacy specialists and will provide delegates with a comprehensive picture of the new regulations and a practical understanding of the implications and legal requirements needed for compliance.