In Validity’s State of CRM Data Management report, 44% of businesses estimate poor quality data can mean losses of 5% to more than 20% in revenue. A vicious cycle develops, with lack of trust in the data reducing CRM adoption, which in turn drives down productivity.
The report also considers positive factors—for businesses managing data quality really well, full-time responsibility of a cross-functional team is a regular underlying theme. An obvious example is marketing, which has evolved into a primarily data-driven function, with many companies now hiring marketing technologists to combine IT and marketing skills to deliver high-performing programs.
Of course, marketing technology is powered by data, which poses questions around how marketers think about their data quality, and how it impacts the effectiveness of their programs. To learn more, we’ve collaborated with the DMA to conduct new research, with thought-provoking results:
- The majority of marketers monitor their data quality (77%) and have KPIs for this (61%).
- Most have defined budget for data quality (84%), usually as part of their marketing budgets (51%). It’s a significant allocation too, at between 16-23% of the total budget.
- However, only 14% consider their data quality practices to be “excellent” when measured against established practices, while 33% report themselves as “average” or “poor”.
The type of data platform being used reflects differing approaches to data quality. Here’s the breakdown.
- Customer Relationship Management (CRM) system: 53%
- Email Service Provider (ESP) platform: 50%
- Customer Data Platform (CDP): 33%
- Note: These responses aren’t mutually exclusive – businesses could be using two or even all three of the solutions in conjunction with each other. Read our article on the “Rise of the CDP” here.
CRMs remain the most popular solution, and names like Salesforce, Microsoft Dynamics, Zoho, HubSpot, and SAP Sales Cloud are recognised around the world. When it comes to data quality, there are specific trends we see from these users.
- More Likely to Monitor Data Quality: 84% of CRM users monitor their data quality (1.1X higher than the report benchmark), and 72% have data quality KPIs (1.5X higher). The size of investment in these solutions means this isn’t surprising. One new client has spent the past two years preparing his data for migration into their new CRM platform. In his own words, ”We absolutely didn’t want to populate it with bad data!”
- Data Acquisition: Businesses using CRMs are more likely to source new customers from “In-person/Virtual events” (44%—1.3X higher). In UK/Europe, e-receipts (from in-store shopping) are now the single biggest driver of acquisition, and the ability of CRMs to integrate with point-of-sale (POS) solutions means these businesses are well placed to harness this opportunity.
- Compliance: ”Compliance with legislation and industry standards” is more likely to be reported by CRM users as a data quality best practice (51%—1.2X higher). Data governance will be strongly enforced at these businesses, but it also reflects a degree of pragmatism. GDPR effectively wrote many established data best practices into law, and DMA analysis shows 68% of marketers have reported increased conversions since then.
- Customer Engagement: “Engagement rates” (37%) and “Conversion rates” (31%) are commonly reported as data quality metrics by CRM users. They understand the relationship between good data and responsive customers, and that data needs to be correct and complete. CRMs are more likely to collect additional data like demographics and interests, building a fuller picture of their customers enabling more accurate targeting, and greater relevance.
- Return on Investment: Unsurprisingly, CRM users report better average Return on Investment (ROI) from their programs (1.1X higher). Their strong focus on data, ability to generate greater responsiveness from prospects and customers, and accuracy in calculating important financial outcomes like CPA and LTV means these businesses are well-positioned to maximise their ROI.
We also couldn’t help noticing CRM users are significantly more likely to use “Deliverability monitoring/3rd-party solutions” as part of their programs (32%—1.5X higher than benchmark). These businesses invest significantly in best-of-breed solutions like Validity’s DemandTools suite to deliver their data quality objectives, and our Everest email success platform to measure and fine-tune program performance.
These businesses understand great data builds great relationships, and they are clear on the benefits they gain from this. Want to be like them? Contact us today to learn more.