UK organisations estimate poor-quality customer data is costing them an average of 6 of their annual revenues, according to research from Royal Mail Data Services.

As UK businesses gear up to comply with the European Union’s General Data Protection Regulation (GDPR) re-permissioning requirements by May 2018, marketers and data experts must clean up customer data.

Data dilemma

Today’s marketers rely on good-quality contact data above all else to ensure the success of a campaign’s performance. Yet despite reporting data quality as having the biggest impact on campaign response and conversion rates, nearly all marketers surveyed (91.4%) said their organisations are still plagued with data-quality issues.

Nearly three in five marketers (58%) said they have concerns over the compliance of their in-house customer data, and a similar number are shying away from using third-party data because they don’t trust that it will comply with the EU’s new, tougher data-permissioning standards.

>See also: Have you been caught unaware by the EU GDPR?

Working with inaccurate or out-of-date customer contact data means UK brands lose one in five customers each year on average – a trend that has been on the rise since 2014.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%) said their biggest struggle is to acquire the new customers necessary to fill that “leaky bucket”. The myth that resolving data quality is a one-time fix is partially to blame.

With such a dim view of the state of their data, it’s clear that in 2017 UK businesses must make big changes to improve campaign success through better data management.

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 data capture, with websites (86.9%) and mobile web (48.5%) offering daily influxes of new customer information.

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. Both sources provide data that either comes with first-party consent (direct sales) or can be leveraged to gain it (from websites). Direct customer contact continues to be an important data source for nearly half of companies, via either face-to-face (48.5%) or contact centres (45%).

With such a range of active data sources, responsibility for data management is often shared across multiple functions without consistent data collection processes. While marketing leads in setting data strategy and collection for most companies (53.5% and 49.5%, respectively), CRM functions, customer service, sales and e-commerce often collect 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 GDPR’s stricter compliance and re-permissioning rules, every function that collects customer data must also work with legal and compliance teams, who manage data privacy and permissions in nearly half of surveyed organisations (44.6%). With so many channels capturing customer data, organisations need a single definition of what data to collect and validate, as well as the back-end data integration tools to ensure quality and compliance.

The complexity of internal data management structures compounds the problem. In the three years since Royal Mail Data Services first conducted this research, there has been 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.

Enforcement of the GDPR in May 2018 could mean that unless organisations act now to improve the quality of their customer data, they will face a shortfall in usable, permissioned customer information in just over 12 months.

Organisation-wide data management

Like all successful change programs, improving the quality of customer contact data must start at the top. Marketing and data teams that work alongside their legal and IT colleagues can present clear business cases to tackle the data-quality problem.

Looming regulatory deadlines offer a clear a mandate to educate leaders on their organisations’ current data challenges, who can make the necessary investments to overcome long-standing customer data management challenges.

This will be critical to not only improving marketing performance, but driving business growth in compliance with GDPR standards.

>See also: The €20 million challenge: how to comply with GDPR and minimise business risks

Today more than seven in ten organisations begin their data-quality journeys with incomplete, inaccurate or out-of-date customer data. Internal data teams will find support from working with a trusted partner to first validate their existing customer data, and then create a universal process for automatically validating all incoming data at the point of capture.

Once existing data is validated, businesses need to develop 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 on a continuous basis will ensure contact data is up-to-date as customer information changes.

Finally, businesses must work now to put re-permissioning strategies in place to ensure GDPR compliance ahead of the May 2018 enforcement deadline.

Making sense of historic, persistent data-quality problems is not a new challenge for many businesses, but with professional guidance and consistent commitment across the organisation, 2017 can be the year marketers and data teams overcome issues of poor-quality customer contact data once and for all.

Sourced from Jim Conning, MD, Royal Mail Data Services