How bad is poor data hygiene for good companies? In his recent analysis of the oil-and-gas sector lag in optimizing data-based decision making, Ben Lamm highlights the confusion between information and data that plagues many companies across many sectors of today’s business geography. “Whether reflective of the lack of a tech savvy workforce, aging employees, or corporate disdain, many … companies have lingered in their transformation into contemporary companies,” Lamm concludes.

Email Marketing Campaign Fizzle: The Cost of Neglecting CRM Data HygieneAnd one area poses a clear obstacle to these companies making the much-needed leap into the present: “a decided lack of data hygiene,” that is, the “collective processes that ensure the cleanliness of data which is important for usage versatility.” Extending Lamm’s sector-based emphasis is especially appropriate given that data is often called “the new oil” of the global economy.

“Dirty” data is under-optimized and therefore underutilized for several familiar reasons:

  • Poorly structured, as in a simple digitization of analog documents
  • Incomplete or wrong
  • Riddled with whole or partial duplication
  • Fragmented across a variety of storage systems and locations.

According to Professional Security Magazine, the risk of “dirty” data clogging operational systems is increasing exponentially. It reports that in 2020, a predicted “1.7 megabytes of new information will be created every second for every human being on the planet. However, less than 0.5pc of all data is ever analyzed and used,” thereby increasing the build-up of dirty data within organizational systems.

According to a DiscoveryOrg study, even the most basic (and fundamentally important) data degrades are likely happening far more rapidly than we think given that every year:

  • 20%of postal addresses change
  • 18% of phone numbers change
  • 25 to 33% of email addresses are effectively outdated
  • 60% of people change job functions.

Given that North American sales departments typically lose approximately 550 hours and $32,000 per salesperson due to dirty data. Given this reality, the cost of even basic email list maintenance is obvious.

But dirty data is only the tip of the iceberg. Far too often collected data is either unknown or unused, left to degrade into what is known as dark data. Many industry experts agree that most companies typically optimize only about 10 percent of the data that they have access to, with the remaining 90 percent well on the way to becoming dark. This poor data hygiene and management costs companies not only on the sales and marketing side, but also can inflict damage when faced with data governance laws that compel them to action.

The fact that dark and dirty data is a lost opportunity for most companies has become an unfortunate given in today’s customer-centric world where email marketing is so critical to maintain a brand’s community strength. The time and money spent from not engaging CRM data effectively or from extracting useful information from unstructured content undermines an organization’s ability to do what it needs to do best: make decisions; interact with clients, customers, and stakeholders; and work strategically to advance profitable and sustainable business objectives.

A 2018 survey by DemandLab, for instance, found that marketing decision makers are clearly looking to their data (including that held in a CRM) to do more for them in coming years. When asked to rate the top priorities for an effective marketing data and technology strategy, their list is a compelling predictor of the need and value of data cleansing and data hygiene as a business priority:

  • 53% noted using data analytics for decision-making as a top priority
  • 42% marked streamlining marketing with technology and integrating data across technologies
  • 39% indicated that improving data quality and accuracy was a priority
  • 38% said that generating reliable and relevant data is key to moving forward.

Interestingly, three of these areas were also seen as challenging barriers by the same companies: streamlining marketing with technology (43%), improving data quality (40%) and generating reliable data (33%).

Important, too, is the reality that both dark and dirty data pose a significant and potentially costly risk in such areas as:

  • Data governance and information regulatory compliance
  • Potential litigation
  • Record keeping and data management
  • Data privacy, anonymization, and security, most notably in sectors like healthtech that continues to deal with aggressive new legislation and post-secondary education where the threats of cyber-extortion are on the rise.

As the first generation of data-focused technology passes in the rear-view mirror, at Transformania we see that the road ahead is rich with opportunities driven by confidence in data and CRM integrity as well as in an organization’s ability to make intelligent decisions based on data that leaders can trust. Data hygiene can no longer remain a wish-list or future-state item.

Our Transformania clients already identify that data hygiene is and will continue to be a distinct and powerful competitive advantage for them as they are willing to invest the time, money, and imagination in order to set a path for long-term success. And they realize that every touchpoint with a client that is based on great data quality, whether via email marketing or a phone call, amplifies their ability to generate sales and strengthen the relationship. Ultimately it leads to a marketing sizzle, and not a contact fizzle.

Matt Siegal

Matt Siegal

Matt Siegal is the founder and chairman of Transformania LLC, a marketing technology startup whose software automatically detects and corrects problems in marketing lists, thereby improving open, clickthrough, and conversion rates and reducing bounces and spam/abuse reports.