Data Quality Costs Can’t Be Underestimated When it Comes to Success
- Bad data costs are high, and these go beyond money — even small mistakes count
- High-quality data is crucial for business success
- The cost of bad data is higher than most realize at more than $3 trillion per year
- Using quality data means increased revenue and substantial savings in every area of business
Bad data is everywhere today as technology speeds up the pace of data gathering from every available source and companies rush to use that data to provide more personalized and profitable customer experiences. The result is poor data quality control, which means inconsistencies and inaccuracies that can replicate across databases and drag down the effectiveness of even the most sophisticated marketing. Between lost campaign effectiveness and the additional effort that must go into working around bad data and cleaning up this mess, the costs of poor-quality data can’t be ignored.
Despite how much you spend on analytics, poor quality data undermines business growth and the most intensive marketing efforts. With so much dependence on data today, departments want numbers, and they want them fast, even if they are inaccurate. Bad data means bad decisions, as poor data hygiene spreads throughout the organization.
You probably know bad data costs you wasted time and money, but do you know what the real total cost is to your organization? You might not be aware of just how much you can save by making sure you have good quality data.
4 ways poor data quality costs you money
Poor quality data has costs beyond money, including losses to productivity, reputation damage, and missed opportunities. The bottom line is that bad data negatively impacts organizational efficiency, while high-quality data is crucial to business success.
1. The financial cost of bad data is huge
You might think bad data will only cost you a customer or two, or a mistake here and there, but it’s a huge problem. In 2018, Gartner research found that the average annual financial loss to organizations due to poor quality data was $15 million, and IBM calculated that U.S. businesses lose $3.1 trillion per year.
2. Poor data quality affects productivity
Data quality is a widespread problem. Nearly one-third of analysts use more than 40% of their time examining and validating analytics data to make sure it can be used for strategic decisions.
Even in today’s high-tech world, sales reps spend a lot of time on the phone. Bad phone numbers waste 27% of their time. Rather than submitting corrections through a data quality control process, they often make manual corrections on the fly, which means corrections aren’t applied to the dataset.
The essence of the problem is that, as your organization grows, business-critical data suffers from fragmentation. No one can see the big picture because data is scattered among applications and becomes inconsistent, with everyone wondering where they can find the most up-to-date information.
This all means data scientists spend vast amounts of time — 50% to 80% — trying to simply clean up data before it can even be analyzed for useful information.
3. Bad data damages your reputation
Poor quality data leads to bad customer experiences, and enough negative comments on social media and review sites can undermine your organization’s reputation.
This means businesses can’t make assumptions about their data, which perpetuates inefficiencies and compliance risks in addition to issues with customer satisfaction. Lack of trust in your data quality also affects the customer service team by undermining confidence in the data they see, which causes them to spend valuable time validating information during interactions, which can also erode customer trust.
4. Bad data leads to missed opportunities
Because poor data quality leads to bad business decisions that lead to bad strategy, it also leads to missed prospect opportunities.
Without the correct, essential data about spending, behavior, and customer interests, your organization will concoct ineffectual strategies and be unable to identify the best opportunities.
The best way to get to know your customers is with quality data — the company that doesn’t know its customers is one that fails.
Save money (and your company) with quality data
The cost of bad data multiplies over time, but the savings of good data multiply as well, which means good data offers a substantial ROI.
The cost of bad records and their cleanup hit $3,920,000 in 2017. The savings companies realized when they used high-quality data were $3,905,000 in the same year, with a total savings of $8,495,000 over the three-year period starting in 2015.
Increase revenue by using good data
Of course, companies want to save money, but company executives usually want to see some sort of correlation between savings and revenue, and in this scenario, quality data really shines. In fact, purely by using quality data, a strong small-to-midsize business can generate up to 70% more revenue.
Quality data has benefits beyond savings and revenue
When measuring the true ROI of quality data, you have to look beyond the financial factors, because data impacts every part of your organization. Clean data is reliable data, which increases credibility and creates a strong foundation for decision-making.
More accurate personalization means better customer responses, employees enjoy greater productivity and become more efficient, and your company reputation gets a boost as well. Reports are more accurate, and insights and metrics can be counted on to unerringly inform effective marketing campaigns.
With all the associated benefits of high-quality data, including confidence, scalability, consistency, readiness, time savings, cost savings, increased revenue, productivity, customer satisfaction, and a great customer experience, your company really can’t afford bad data. No one’s can.
BDEX – because data quality matters
The tools at BDEX help you get the quality data you need, right when you need it, which leads to increased ROI and more successful business plans.
We have over 5,500 data categories, more than 800 million mobile ID-to-email matches, and over 1 trillion data signals. With BDEX, you’re empowered to create your own custom audience. So, all you have to do to get your messages in front of the right people at the right time is to build your ideal customer to target and download the data.
BDEX has invested millions in developing a Data Quality Assurance layer to identify invalid data and authenticate quality data to ensure the result is improved ROI for the brands we serve.
To improve your ROI, you have to get the most out of your data. Otherwise, you’re wasting time, money, and resources by marketing to the wrong audiences at the wrong time with the wrong messages. BDEX gives you the information you need to better connect with the person behind the data signal.
Make real human connections with BDEX. Contact the team today to start transforming the quality and accuracy of your data.