Marketing activities are increasingly driven by data of various types – the power provided by social media platforms comes largely from the data that ‘likes’ clicks, links and other transactional activity generates for marketers. But there are many other tidbits of data that could be draining your marketing wallet without you even knowing it, and the answer to stopping the leak is simply to be diligent about your data hygiene. The Data Warehousing Institute estimates contact data quality problems cost U.S. businesses over $600 billion annually*. That’s a lot of loss for not maintaining an accurate database or renting cheap lists.
Your in-house customer data, or your prospect or outreach marketing data is a literal gold mine, but if the ore you start with is low quality and dirty, the yield will certainly suffer. It ends up costing you far less to rent, purchase or compile clean, actionable data than it does to buy cheap low-quality data and have it ‘cleaned’ after the fact. And, there’s a further downside to using bad data – you can damage your brand and erode the opportunity for future sales with that customer over time.
If an organization purchases 300,000 contacts a month for direct marketing or outbound telemarketing, and each contact costs $0.05, it will spend $15,000 a month. But the real costs don’t stop there. Instead, the costs of working that data lead – the sales and marketing time to create a complete, accurate and current record – must be factored in as well. Ultimately, converting bad data to usable, quality data can result in an organization not paying $0.05 per contact, but rather investing $5.62 dollars per bad contact to make it usable.**
Additionally, if you extend that example, not only are you spending $5.62 per bad record, you’re also wasting over a dollar a piece on them just in production cost, at $.75 for the mailing and $.32 postage to mail it. if your list is 10% ‘undeliverable’ that amounts to 30,000 x $6.69 = $200,700 wasted just on pieces that never got there. Add in creative costs, and you may as well have flushed a quarter million dollars down the john! Mail four times that year using that list and it’s over a million dollars in waste, and I don’t know too many organizations who have the resources to waste a million a year in marketing costs they KNOW go nowhere.
Clean data cuts cost per sale, increases sales per mailing, and boosts your marketing efficiency to a significant degree. Think your data is clean? Try this exercise: ask your data warehouse to cut you a slice of customer data from a year ago, 10,000 records selected at random from last year, de-duplicated to yield 10,000 unique records. Now, put those in a spreadsheet and just visually scan the data. See how many empty cells there are, how many e-mail addresses don’t fit the proper mailable format or work as actual links, see how many zip codes are either incomplete or inaccurate after a zip sort, compared to the state they link to, check how many phone numbers are either incomplete or formatted improperly. Take ten at random and call them, see if they go to the person it appears they do. Now, count each error from the above checks. Multiply your count by the total size of your database in 10,000 increments, and you’ll have an idea of the percentage of your total database that contains inaccurate or corrupt records, and are wasting you money.
Clean, fresh data is efficient, productive data, that makes you money and is an asset. Inaccurate, dirty, corrupt data is a silent money drain that can leach the effectiveness out of your marketing programs like a cancer. Here’s to getting your data squeaky clean!
*Eckerson, Wayne. “Who Ensures Clean Data?” The Data Warehousing Institute. September 2009. Web. January 2011.
** From “Cast a Smaller Net: Simplifying Lead Generation” by Jason Butler Copyright 2011 Goldleaf Data Corporation.