5 Ways Bad Data Can Harm Your Business

5 Ways Bad Data Can Harm Your Business
Bad data can harm your business in so many ways. Data is the strongest competitive weapon in the hands of any organisation, provided it is understood correctly and used appropriately.
Bad data leads to bad decisions making, not just with losses of time and money, but the impact it can have on critical business decisions. Information and data are the most strategic assets of an organization. It is critical to harnessing business data for effectual decision-making.

What is Bad Data?

Bad Data refers to information that can be misleading, erroneous, and without general formatting. Poor quality data prevents accurate customer profiling, hinders lead generation, damages brand reputation and could even lead to violations of data protection laws. Unfortunately, no industry, organization, or department is immune to it. If not acknowledged and fixed early on, bad data can cause serious coercion.
It can be duplicated, conflicting data, incomplete data, invalid data, or unsynchronized data – all equally damaging to your company. The chart below demonstrates what each is and some of the horrific possible outcomes!

How Does The Bad Data Occur – The Causes?

  • Wrong or inaccurate data – Information that has not been entered correctly or maintained.
  • Missing Data – Empty fields that should contain data.
  • Non-conforming data- Data that hasn’t been normalized as per the system of records.
  • Inappropriate data – Data that’s been entered in the wrong field.
  • Duplicate data – A single Account, Contact, Lead, etc. that occupies more than one record in the database.
  • Poor data entry – Misspells, typos, transpositions, and variations in spelling, naming or formatting.

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How Does The Bad Data Harm Your Business?

Bad data will cost you money

The most obvious consequence of bad data is the waste of money. Marketing assets are expensive to produce, and when your materials don’t even reach their intended audience, that means money out the window. It’s not uncommon for businesses to miss half of their contacts if their data quality is poor or to send duplicate messages to one person who is in the database more than once. Bad targeting also results in an incorrect demographic understanding of your clients. All in all, you’ve wasted half of your budget on marketing materials that were never seen.
Bad data can also harm the business of the government. According to Punch, the Federal Government of Nigeria paid N220bn to 103,000 ghost workers between September 2013 and May 2015.
In the US alone, poor quality data has an estimated cost to the economy of $3.1 trillion – per year. This is through lost revenue, poor decisions, inefficiency, legal non-compliance, unnecessary server costs and so on.
In the UK a report conducted by the Audit Commission revealed that the NHS was overpaying £162m per year to GPs for patients that did not exist. These so-called ‘ghost patients’ – still existing on books through a lack of data hygiene or fraudulently – cost the NHS £65 each, for 2.5m incorrectly registered patients.

Inaccurate reporting and less informed decisions

If you are planning on using your data to make informed decisions and forecast what you should be doing more of for future business growth, you need to make sure that your data is accurate, complete and duplicate free. Decisions based on poor quality data are no more reliable and accurate as those made on assumptions. Cluttering up your database with poor quality data will impact on your ability to make informed decisions about the state and future of your business.

Poor targeting and wasted marketing effort

Are you sending out multiple messages to the same person every time an email campaign is delivered? If so you may run the risk of annoying them so much that they refuse to open any of your emails. For a marketing campaign to be effective the right message needs to go to the correct person. When you have invalid email addresses, missing fields and other forms of outdated data this cannot happen.
Furthermore, without an accurate view of each customer and where they are in the buying process, it makes it difficult to segment properly. Sending out untargeted messaging can demolish open and click-through rates wasting your valuable time and money. Having accurate, good quality customer information can help you to provide more personalised interactions which make all the difference when it comes to winning customers and keeping them.

It hurts lead generation

Although B2C data regularly becomes outdated, frequent changes to job titles, phone numbers and email addresses, along with falsified records and unintentional mistakes at data entry, means business data becomes obsolete even quicker. According to a statistics published by The Drum, 40% of B2B leads generated will fail because of poor quality data. Maintaining this contact list, through regular contact and data enhancement is vital if you are to create correct customer profiles, identify what tactic might be most suitable for them and highlight those who are most likely to convert.

Bad data will reduce customers’ satisfaction and trust in your company

Businesses have a small window of opportunity to obtain and retain their customers. Once they betray their trust, those customers are usually gone for good. Whether it’s something as simple as a poorly-targeted email, or a more serious lapse, bad data can have a lasting, negative impact on the brand and customer experience.
For modern marketers hoping to create a customer-focused brand, keeping customers happy and loyal is the number one focus. They want relevant, personalised communications through the channel of their choice. Findings published by My Customer say 45% of customers would flee from a brand that communicated with them through a channel they had asked not to be.
Customer satisfaction with your brand can be severely eroded when bad data gets into the mix. Incorrectly titled communications or poorly targeted recommendations suggest a lack of knowledge about your customers that can leave a bad taste in the mouth, and duplicate emails and mailings will be perceived as spam. Failing to treat your customers as an individual will see a decrease in confidence and lead to many lost opportunities.

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