As technology improves and businesses everywhere gain easier access to data, it's become commonplace to invest heavily in analytics. With consumer information so readily available today, it's only logical to put more money into gathering data, analyzing it and fine-tuning operations.
But not all data is created equal, and many companies are finding that "dirty" information can lead them astray if they're not careful. It's imperative that all analytics-focused businesses check carefully for data quality - if they fail to do so, they might make crucial missteps in marketing or customer service.
According to Business 2 Community, companies are modifying their approach by investing in data quality audits. Just as they put significant time and money into gathering information and processing it, they also need to commit to double-checking for accuracy. People's financial and contact information are always changing, and if companies don't keep up, they can get themselves in trouble.
Julie Knight, founding director of Marketscan, explained to the news source that data quality has recently arisen as a key indicator of performance for marketers.
"Poor quality data has one of the biggest single impacts on B2B marketing success," Knight stated. "All too often, data audits and the use of data cleaning services take a backseat to other marketing priorities. It's time to redress the balance."
How dirty data happens
The news source explained that databases tend to degrade over time, and the main reason is the constant shuffle of people's information. The report looked specifically at the United Kingdom - among U.K. consumers, 30 percent change their email addresses every year, and approximately 18,000 per day are changing their mailing addresses.
These lessons are equally applicable anywhere else in the world. The bottom line is that if people's addresses are always changing, companies can get into trouble by leaving their data unverified. It's imperative that companies step up and do something to address this problem.
The chain reaction of poor quality
If companies neglect to address their data quality issues, a series of events is likely to follow, all of which spell trouble for any business. This is likely to include:
All of the above are a waste of companies' time and money, and furthermore, they're damaging to their reputations. According to Econsultancy's most recent Email Marketing Industry Census, 86 percent of poorly targeted business mail is thrown away before it's even read. The last thing any business wants is to be labeled as a spammer.
Measuring the impact
The effects of poor data quality will be very tangibly felt by any business. According to the 2013 edition of the Data IQ Data Strategy Review, the most significant business risk incurred by companies with dirty data is damage to customer relationships, which was cited as a problem by 87 percent of business leaders. Other problems included:
All of the above can be seriously taxing on any company's resources.
How auditing can help
Therefore, it's clear that companies should audit their data regularly and check for any bits that might be inaccurate or out of date. Business 2 Community pointed out that in an effective audit, companies would be able to correct inaccurate records, add missing data, remove duplicate entries, correct poorly formatted addresses and more.
Data quality might require an investment, but in the long run, it's well worth any expenditure. All companies stand to reap the rewards of clean data later.