Marketers know the age-old axiom best: It is up to 10 times more expensive to gain a new customer than to sell to an existing customer. This is especially relevant in today's economic situation, as businesses are finding it necessary to tighten their capital expenditures.
With this in mind, companies integrate a variety of campaigns, including drip marketing offers, into their marketing strategies, striving to keep their brands in front of customers' eyes. What cripples marketing consistently is this: The customers you want to stay in front of may not be the ones you are necessarily reaching or, even worse, your messaging may never land in front of any eyeballs at all.
The problem: bad data. Some research indicates that up to 40% of a company's data is bad, resulting in duplicate records, workaround costs, recovery costs, lost opportunities and, most painfully, lost customers. You could distribute marketing materials to your entire database, maintaining a level of confidence that some pieces will hit the intended target. Many companies do this. Your competition undoubtedly does. So why is this a problem?
You don't know your customer at all. As a result, your marketing efforts and funds are squandered. This will not only prove detrimental to your company's image long-term but also to your bottom line.
To put it into a cost perspective, capturing erroneous data directly at the source is invaluable if for marketing purposes, data records cost, say, $1 per unit. Capturing incorrect data before reaching your customer would save you $50, based on the costs to replace that customer.
The solution: data quality. Data-bases are doubling in size every six to nine months. Catching erroneous data earlier is key to your bottom line. Ignore the problem for another month and the problem compounds itself, further wasting funds on “off-target” marketing campaigns.
The good news is that bad data are both identifiable and repairable. Here are a few dos and don'ts to begin your data refinement, starting today:
* Do a data-quality assessment, whether your company has the on-site expertise and software to run a quality check or not. You can outsource it. Learn what's hidden in your millions of records. The results will probably scare you—wasted marketing materials, loss of revenue due to billing errors, reduced customer satisfaction, misallocated human resources. And the list goes on.
* Don't turn a blind eye to the millions of bad records piling up in your database. Not only will this take up a large portion of your budget over time, it becomes a logistical nightmare to your marketing and sales teams.
* Do a cost analysis. Some data-quality companies offer free assessments to identify how many bad records you have. If you can't find one, you can confidently assume that at least 15%, and most likely as much as 40%, of your data is bad. With this staggering statistic in mind, what do you suspect bad data will cost you this quarter?
* Don't think in terms of now. In the data world, 20 minutes is an eternity. As technology continues to fuel our real-time society, data compound by the minute. There is a continuous need to update your data. The time spent collecting customer information is futile when you send out materials that either don't reach or ineffectively touch your customers. Data quality is an upfront investment that produces sustained profitability.
With the countless methods companies use to target customers, there's no reason to drop the ball at the source. Quality data elicit quality response. Data records are diamonds in the rough. Your proprietary database is a diamond mine. Mine it and polish it, then reap its rewards.
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