Putting customer data at the heart of your digital business

Creating a digitally driven, responsive business relies on customer data

Ensuring that this is collected and used effectively benefits the bottom line and builds closer, more profitable relationships with customers. Respondents in a recent Royal Mail Data Services study back this up – they estimated that poor-quality customer data cost the equivalent of 6% of annual revenue.

Looking in-depth at the challenges in managing customer data, the research highlighted three key trends:

The number-one issue is the GDPR 

The 25 May GDPR implementation date is approaching rapidly. Unsurprisingly, this means that GDPR compliance was the largest concern for respondents, cited by 29% as their biggest worry. This had more than doubled since the 2016 study, when 12% listed it as a concern, which demonstrates the rapid rise of GDPR compliance within businesses. 

Looking in more detail, the study asked how confident respondents were that their internally held and third-party customer data was GDPR compliant. The positive news is that 78% of all marketers were either “very” or “reasonably” confident that their internally held customer data complied with the new regulation – although worryingly, 11% were not confident, including 2% who didn’t know if they were compliant or not!

Collaboration is essential to data management

Responsibility for managing customer data is split. The research found that in 37% of companies it was down to marketing, while for another 37%, central data management had this role, and IT/IS was in charge in 30% of cases.

Around half (51%) of marketing teams set their companies’ data strategies, while other groups, such as central data management (26%) and the board (25%), were also involved. Unsurprisingly, legal and compliance teams were heavily involved in privacy and permissions decisions, taking lead responsibility within 38% of organisations. Forty-four per cent of marketing departments led in this area, compared to 20% of IT/IS teams. 

©Royal Mail Data Services

Data management is complicated by the technology that companies possess. Nearly four in ten (37%) brands said that dealing with legacy systems was their biggest challenge. These can be inflexible and difficult to use, and act as blocks on using data to effectively meet wider marketing challenges.

All of this means that cooperation between different departments is increasingly vital if companies are to meet the challenges of managing their growing volumes of data and effectively reaching customers. 

Automate to improve data quality

Poor-quality customer data was the biggest challenge for 18% of respondents. But what leads to this? When asked to prioritise the different causes of poor-quality data, they cited basic errors as the main culprits, specifically out-of-date information and incomplete data. The research found that problems such as duplicate data, spelling mistakes and data in incorrect fields tended to rank lower when it came to data-quality issues.

Validating data as it is collected is key to maintaining good-quality data. Although this is becoming an increasingly automated process, both on websites (for which 46% of respondents said they automatically checked address data) and in internal systems (40% automatic checks), nearly one in five (19%) survey respondents said they didn’t validate website data, and 16% didn’t check data coming into internal systems at all. An additional one-quarter (25%) relied on manual address checks in internal systems. At a time when good-quality customer data and operational efficiency are high on the marketing agenda, there is clearly a need for companies to find new ways to automate the continuous cleansing and validation of customer data.

Data quickly becomes out of date and ineffective. This is leading to a focus on more formal, regular data cleansing – 22% of companies said they did this daily or continuously, and just 11% annually (down from 14% in 2016). However, one-third (33%) still had no formal processes in place to clean customer contact data, although this had dropped from 37% in 2016. This means a sizeable minority are putting themselves at risk of data-quality issues – and potential GDPR investigations over non-compliance. 

Customer data needs to be the lifeblood of your business if you are to understand consumers and deliver the personalised approach that they require. However, as the Royal Mail Data Services research shows, businesses need to focus on key areas around the GDPR, collaboration and automation if they are to gain the real benefits of customer data moving forward. 

You can download a full copy of the report here.

About The Author

Jim Conning is Managing Director of Royal Mail Data Services (RMDS). High-quality customer data drives business growth. Research shows that the accuracy of customer data decays an average of 30% each year, with 70% of businesses suffering from out-of-date and incomplete data. No wonder maintaining accuracy is a top priority for marketers, especially under the General Data Protection Regulation (GDPR). Our trusted data solutions make sure you collect accurate data from the start, maintain its quality and help towards compliance.