Data quality news

It starts with the data

Jonathan Hulford-Funnell, Global Managing Director for Experian QAS, explains why good quality data is key to customer retention.

As we enter 2009, data quality has never been so important. Businesses across all sectors have found that the current economic situation has tightened spending and put the customer firmly in the driving seat. In response, approaches to customer management have also started to adapt.

Retention strategies, rather than pure customer acquisition, are now viewed by many as a safer way to protect and grow revenue. This is a trend that was reinforced by research that we recently conducted (Experian QAS and Dynamic Markets: Global Data Quality Research 2009), where only 11% of organisations worldwide claimed that their main focus now, is customer acquisition.

It does make sense to focus on retention. We all know it costs less to cross-sell and up-sell to existing customers than to acquire new ones. Smart organisations, however, have recognised that it's a three step approach: identifying who the good customers are; encouraging them to stay with you; encouraging them to spend.

Data plays a crucial part in all three stages. If you don't have customer contact data right at the outset, then it's almost impossible to identify who the good customers are. It is important to get on top of problem areas such as duplicates, as these can distort reporting and make a customer appear to be of more or less value to the business than they really are.

When the data is clean and accurate, other external data, such as geo-demographic or business information, can be used to profile your customers. Match the profile of your top customers to other similar customers in your database and you have the perfect target list for cross-sell and up-sell campaigns.

Reducing risk and cost

Retention is one item on boardroom agendas at the moment, but so is reducing risk and stripping out unnecessary cost. Data can help with decision-making, so be prepared to support these initiatives, but make sure you are using data that you can trust. A statement that rings quite true to me is: "a booming economy washes over a multitude of sins". When the going is less smooth and more internal scrutiny is placed on an organisation, gaps in knowledge and data accuracy become glaringly obvious. At this point, it is often too late to make quick and significant changes. On the positive side, wise investments in data that are governed by a data quality strategy will pay off. So when the economy does improve, organisations will be ready to take advantage.

This article can also be found on the Data Strategy website.

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