Successful business owners can’t deny that good data serves as the cornerstone of their growth. From guiding strategic decision-making to tailoring customer experiences, data is the major force behind not only better bottom lines but also innovation and customer loyalty.
So, what’s the problem?
Businesses can only benefit from the positives that data has to offer when their data is up to date. Despite all our technological advancements, businesses still don’t have an easy way to indicate bad data in their databases. Yet according to the Harvard Business Review, 84% of CEOs are concerned about the quality of the data they’re basing their decisions on.
Today, we’ll discuss how businesses collect and use data, the hazards of outdated data, and what your business can do to avoid the problems it presents.
Update, verify, and enrich your data with Exact Data services. Start optimizing your marketing campaigns today!
How Businesses Collect and Use Data
Your business likely collects data for both potential and existing customers. Collecting information can be done digitally, such as with a submission form. An example might be signing up to receive a discount on your products or services.
Data collection can also be done in person. Think of a time you made a purchase in a store and were asked for your name, birthday, and email address.
You can also purchase a list of targeted prospects from a site like Exact Data that contains information like phone numbers and email addresses.
You might think that this data never changes, but it can! Names change, people move, hobbies and interests change—the list of reasons why your data changes goes on. So, the question isn’t, “Will my data become outdated,” but rather, “When will my data become outdated?”
And that can lead to a whole host of problems, including:
Ineffective Marketing Campaigns
Chances are, your business has collected contact information from customers and used it to contact them via marketing campaigns. From phone calls informing them of upcoming sales to emails with a special birthday discount to a postcard mailer encouraging them to come to check out what’s new, every business uses marketing campaigns to encourage customer interaction. This means that outdated data poses a major risk to marketing campaign success, including misguided targeting efforts and ineffective messaging strategies.
For instance, consider a retailer focused on people in their early 20s. Someone in their 30s might not have shopped there for years, but they’re still receiving marketing from the retailer—which wouldn’t happen if the retailer’s data was up to date.
This type of misalignment not only leads to wasted budget spending but also undermines the relevance and effectiveness of marketing messages.
Poor Customer Experience
On the flip side, you could have an incredibly loyal customer base. In this case, you want to make sure their information is accurate so that you can stay in touch with them and personalize messaging. Using outdated data can lead to things like undelivered direct mail or email campaigns and wrong phone numbers for call campaigns, resulting in unhappy customers.
If your business has a loyal customer base, they expect to hear from you. Not connecting with them has the potential to result in lost sales or even negative word of mouth as customers turn to competitors for solutions.
Additionally, a poor customer experience can result in missed upselling or cross-selling opportunities. When outdated data doesn’t reflect a customer’s current needs or purchase history, businesses can miss their chance to recommend relevant additional products that the customer could find of value. This can lead to poor customer experience.
Don’t believe us?
Think of the last time you purchased a shirt online. You may have received a pop-up notification or a note at checkout suggesting a complimentary product. This could have been a pair of earrings or even a belt. These suggestions are informed by algorithms that are created to analyze purchase data traits and offer recommendations based on the behavior of other customers.
Compliance Issues
Understanding and adhering to data protection laws is crucial, yet many businesses don’t realize it. Some states even have specific regulations regarding data and privacy.
It’s always important to investigate the regulations within your state before contacting your list of customers or prospects. At the time this blog is being written, the following states have individual privacy laws concerning their citizens:
- California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA)
- Virginia Consumer Data Protection Act (CDPA)
- Colorado Privacy Act (ColoPA)
- Utah Consumer Privacy Act (UCPA)
- Connecticut Data Privacy Act (CTDPA
Additional compliance issues may arise if you’re not familiar with the Do Not Call Registry, which empowers individuals to opt out of telemarketing calls. Adhering to this regulation demonstrates respect for consumer preferences and helps businesses avoid penalties.
Similarly, the CAN-SPAM Act governs commercial email messages, mandating clear opt-out mechanisms and truthful sender information.
Businesses that do not follow these guidelines can face fines for non-compliance.
Security Issues
You probably already know that data security breaches pose a significant threat to businesses, although you may not understand why.
One major concern is the unintentional exposure of personal information within outdated datasets. Over time, data accumulates, including details that may no longer be relevant or necessary for business operations. However, retaining this extra data increases the attack surface for hackers, providing them with additional avenues to exploit during a breach.
Also consider that outdated data management practices can contribute to weaknesses in password and access controls. For instance, businesses might retain old user accounts or access credentials. Yet these forgotten accounts can become easy targets for hackers who want access to sensitive systems and confidential information.
Of course, let’s not forget the possibility of human error causing security issues within a business. How? As data becomes outdated, it’s more challenging to manage and track effectively. This tends to increase the likelihood of confusion and oversight. While it might not sound like a big deal, companies have accidentally sent out sensitive information to the wrong recipient or misplaced or improperly imported important data due to a lack of clarity on processes or even storage locations.
Wasted Resources
Your business wants to make money—not lose it! Yet outdated data can lead to wasted resources across a variety of departments, including:
- Marketing: Bad data can cause significant harm across sales and marketing departments, from spending on campaigns that don’t reach your intended audience to inaccurate personalization and watered-down messaging.
- Inventory Management: In retail and manufacturing, outdated data on product demand or sales trends can lead to overstocking or understocking of inventory. This can result in wasted storage space, product obsolescence, and even lost sales opportunities.
- Human Resources: Inefficiencies in payroll processing, benefits administration, or training programs are just a few of the issues this department can face. Not to mention bad data can also create confusion and frustration for the employees dealing with these inaccuracies!
- Facility Management: Outdated data on building occupancy or energy usage can lead to inefficient allocation of resources. For example, a company might continue heating or cooling unoccupied spaces, wasting energy and money.
- Supply Chain Management: Disrupting production schedules can lead to big delays in supplier lead times and product availability. Outdated data can also lead to inaccurate supplier information, poor planning and forecasting, and inefficient logistics. Ultimately, this also puts you at risk of increased costs and damaged relationships—two things no business wants to deal with!
- Research and Development: From research efforts that are misdirected to ones that don’t address current needs, outdated data in this department can prove a waste of not only time and money but also intellectual resources.
Identifying Outdated Data
So now that you’re aware of the dangers that outdated data can cause, let’s talk about how to identify outdated data. There are several ways you can do this internally if you know what to look for and have the right processes in place to reduce the likelihood of human error.
It starts with monitoring Key Performance Indicators (KPIs). In marketing, when you track metrics like bounce rates, open rates, click-through rates, conversion rates, and unsubscribe rates for marketing campaigns regularly, you have a better idea of which customers are engaging, versus which ones aren’t. Having processes or systems in place to sort customers by these KPIs can also prove beneficial to your long-term marketing efforts.
You’ll also want to pay attention to potential red flags. These may include high complaint rates about inaccurate information, low customer engagement, or even a sudden increase in unsubscribes. Remember: Data isn’t random. If there is a negative trend, it’s worth paying attention to. Customer feedback and complaints regarding inaccurate information or outdated communication methods are merely information—nothing to be afraid of or offended by!
Creating a system to track data duplication rates, identify missing or conflicting information across records, and recognize when data was most recently updated will also help your business more easily identify outdated data. Technology and software can play a big role in this. CRM (Customer Relationship Management) systems, for instance, are a great tool that enables businesses to manage interactions (including sales data) with both current and potential customers. A CRM can also help to organize, automate, and synchronize sales activities, making it easier to identify duplicate leads, nurture leads, track communication, and monitor progress at every stage of the sales cycle.
A CRM can also make it easier for businesses to break down data silos across departments. In doing so, companies can implement data integration solutions that ensure information synchronization and streamline data access controls and retrieval procedures across teams. For example, marketing may identify high-value customers and share insights with sales. Sales then uses this customer data to personalize outreach and close deals faster, leading to a win-win for both departments.
Of course, an effortless way to ensure the accuracy of your data on file is to use data hygiene services such as those offered by Exact Data. Data hygiene involves matching your data against external databases or reliable sources to identify inconsistencies and outdated information within your records.
Remedies for Outdated Data
Let’s say you think your business may have some outdated data. You’ve identified a few issues based on an audience sample, and you’re sure there’s more. What do you do? It’s not like you want to delete your whole list and start over!
You don’t have to. Data services such as data enhancement exists to help you keep your list healthy so it can maintain a nice, long life and:
- Identify and correct typos and errors found within your list
- Match your list against up-to-date email-change databases
- Scrub your list and remove outdated contact information
Regularly refreshing your data helps ensure that insights and, ultimately, decisions remain current. This can enhance the accuracy of your analyses and strategies, which contributes to growth. Not to mention, you’ll gain a deeper understanding of your target audience’s behavior and preferences.
Additionally, using data verification services helps your business to mitigate risks like errors, duplication, and inconsistencies. This can help streamline your workflows, saving time and resources that would otherwise be spent on rectifying errors.
Verification services can confirm the accuracy of contact information for marketing leads generated through online forms or other channels. This helps sales teams focus their efforts on qualified leads and avoid wasting time on bad data.
Benefits of Using Accurate Data
Using accurate data can make or break your success as a business owner. Here are some of the biggest benefits you’ll encounter when using accurate data within your business.
1. Improved ROI: By ensuring that your customer data is free from inaccuracies and redundancies, you can easily target your audience segments, tailor messages, and optimize marketing channels. This precision translates into higher conversion rates, reduced acquisition costs, and, ultimately, a better return on investment for your marketing endeavors. Learn more about improving your ROI.
2. Enhanced customer relationships: Enabling personalized interactions and targeted communications, good data offers a clearer understanding of customer preferences, behaviors, and demographics. This can help businesses nurture stronger connections with their audience and increase brand loyalty.
3. Increased sales and lead generation: Verified and up-to-date information allows sales teams the ability to identify and prioritize high-quality leads, resulting in more conversions and revenue. Additionally, accurate data supports more effective sales strategies, such as cross-selling and upselling, further boosting sales performance.
4. Improved operational efficiency: In processes like inventory management, order fulfillment, and production scheduling, even minor errors can lead to big problems like delays, inefficiencies, and increased costs. Accurate data helps minimize these risks and ensure smoother operations.
5. Better decision-making: Whether it’s establishing resource allocation priorities, improving project planning, or streamlining workflows, having confidence in the integrity of your data empowers you to make informed choices that drive growth and innovation.
Final Thoughts
Great data offers businesses many benefits, including strategic decision-making, personalized customer experiences, and even innovative approaches to products and services. So, it’s not too much to claim that good data ultimately serves as the cornerstone of growth and success for businesses!
That said, the hazards of outdated data are numerous and can range from ineffective marketing campaigns and poor customer experiences to compliance and security issues and wasted resources. But the good news is that by understanding these risks and implementing the remedies we discussed above, your business can ensure improved data accuracy, which is essential for its long-term success and competitiveness. If you’re curious as to how Exact Data can help ensure your data is up to date, learn more or connect with us today.
