The issue of data quality is increasingly becoming recognised as an investment priority as companies are beginning to understand how it can impact several areas across the business, including strategic decision making, cost control and regulatory risk reduction.
If quality data can be beneficial, it makes sense that inaccurate data can have adverse effects on a business. In a poll of 1,200 companies of all sizes carried out by Experian, 88 per cent of respondents suggested poor quality has a direct impact on the bottom line and a further 12 per cent intimated it negatively affected profits.
Despite 99 per cent of companies claiming to have a data quality strategy in force, 91 per cent admit to still find it difficult to come to terms with the basic issues surrounding contact data quality.
There are ways to fix this, but the key is to establish improvement schemes that encompass all the required business areas and to have metrics that are efficient enough to diagnose successes and failures.
The difference between triumph and defeat rests on a company’s ability to effectively prioritise. According to the study, titled ‘Making your data work for you: Global Research report 2014 from Experian Data Quality’, customer data is still the primary focus for improvement schemes. This is unsurprising, considering the profound impact this can have on many KPIs found on business scorecards.
What are the true costs of poor data quality?
As mentioned earlier, the impact of inaccurate data isn’t limited to unhappy customers, as it can affect a business’ income, 12 per cent of which is lost though wasted money on marketing spend and lost productivity. And that’s just the costs that can be seen.
The hidden expense of poor quality data can be much greater than monetary losses, as 28 per cent of those that have had problems delivering an email because of bad data revealed that customer service has subsequently been damaged. In addition, 21 per cent admitted they had suffered reputational damage because of substandard data, which can often be more injurious than lost money.
Headway has been made, and the issue of data quality is moving up the corporate agenda, but the results of Experian’s study demonstrate that there is still more to be done.