Data Wastage

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Data may not be the most glamorous element of a marketing programme but it is a powerful underlying force that drives the success of virtually every effective customer relationship management (CRM) and direct response initiative.

An enormous amount of customer information passes through an organisation’s hands in the course of its day-to-day operations. Much of it could play a vital role in developing customer relationships and marketing to existing clients and prospects, but only if it is pulled together in an accessible form and actually used to gain insight into the consumers being targeted.

Data provides valuable insights into customer purchasing patterns, preferences and behaviour. Marketing can then be more effectively targeted and even personalised.

For many organisations though, such data is collected but never integrated in a functional database. Many firms have a wealth of information on customers that they are failing to utilise. We have dubbed this ‘data wastage’.

By eliminating data wastage, businesses could make more efficient use of their budgets and boost return on investment. Failure to act on it can have a hugely detrimental effect on an organisation’s overall reputation or brand. A company’s credibility can be seriously damaged by an apparent lack of institutional memory or acknowledgement of a history of dealings with a customer.

To look at just what impact data wastage is having on customers we conducted a survey across the UK, to examine whether consumers were in fact taking note of whether companies were failing to keep track of their interactions with their customers and prospects.

The findings clearly show that companies need to improve their efforts at integrating and using the information they have to hand on consumers, as 65% of respondents reported that companies communicating with them were sending them offers for products they would never buy despite the fact they had given these firms details on their personal preferences.

Moreover, a shocking 58% found that some firms did not even know that they were existing customers and were sending them offers aimed at prospects. The research also revealed that more than half of the respondents who had bought a product from a company found that the same organisation then repeatedly tried to sell them the same item.

Data wastage is clearly a problem. Not only are many companies wasting spend on redundant or poorly targeted offers, but consumers are taking note – and neither of these is good for the long-term health of a brand.

What is vital for any company that is underutilising the data at its disposal is to pull together all the databases held by different parts of the company, along with any third-party data it is buying, in order to create a central resource that provides the much-sought-after ‘single customer view’. This takes what for too many firms is a liability and turns it into a valuable communication, marketing and operations asset.

Companies aiming to use their data for more complex and ultimately fruitful functions – such as precision targeting of marketing communications – must ensure that the information is effectively and accurately captured in the first place, and then stored on a flexible platform that allows for analysis, interpretation and action. In doing this, companies need to determine:

– What data is needed – and that duplicate, unnecessary, questionable, or inaccurate data be eliminated
– Where the necessary data can be found
– Which capture procedures need to be standardised across the organisation
– Which data standards, such as cleaning and regular updating, need to be established throughout the company

The advantages and capabilities presented by a central database that provides a single customer view are myriad. Once a company has such a platform, it can then make the most of the intelligence and insight a unified database can provide, helping the firm to track customer behaviour, create consumer profiles and spot market segments. The opportunities that analysis and other uses of the customer database provide include:

– Identifying the most valuable customers and focusing offers on them
– Building loyalty by using data to inform customer reward programmes
– Cross-selling and up-selling (ie. getting customers to buy other products and services, and moving them into higher spending brackets)
– Extending customer service by selling consumers packages that suit them
– Determining event triggers for marketing offers (such as moving house or the birth of a child)
– Creating tailored promotions that are similar to those that particular customers have responded to previously
– Improving direct marketing by getting the targeting, personalisation and marketing channel for an offer right
– Developing joint activities with partners
– Informing product development and the introduction of new services
– Managing customer risk by understanding the creditworthiness of customers and the firm’s financial exposure in each case
– Forecasting the potential of marketing initiatives and customer revenues
– Enhancing existing data with other data from third party sources
– Prospecting for new business by creating profiles for the best and most loyal customers and targeting similar types

Turning data into a manageable and accessible asset that provides a single customer view is not necessarily an easy road for a company to take. But for firms that embark upon the journey, it can pay long-term dividends, strengthening an organisation’s ability to build on its existing customer base.

For many businesses, the most straightforward solution is to bring in a managed service provider with the knowledge, experience, technology and data resources to turn diverse and often disconnected databases scattered throughout an organisation into a unified platform for actionable insight.

With the aid of a specialist partner, firms can determine where in their organisations data needs to come from and develop a central data store into which all streams from within the company can flow – and that can then be tapped by all the relevant departments or business units that could make use of that data.

Businesses can then utilise the full weight of this available data to improve data quality, enhance insight, and develop more effective strategies for expanding customer relationships and attracting new business.

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