Is Data Cleansing a Cost or an Investment?

A 2015 survey conducted by Royal Mail Data Services has highlighted a startling statistic – that less than 40% of businesses take clean data seriously! Well, that’s what I take from the stats anyway – read on and tell me what you think…
The survey, conducted throughout this year, has shown that 63.3% of UK businesses reported holding out-of-date customer information within their client database. Even then, of the 37% or so who do hold up-to-date information, over 60% of those admit to having blank fields within the database, i.e. incomplete records!

Data Cleansing is Good Business Practice

Why? Well, notwithstanding the potential issue of compliance under the Data Protection Act, in my mind, not taking data cleansing seriously is, to coin a phrase from the film Pretty Woman – “Big mistake…big…HUGE!!!” Here’s why:

1- Of those companies that continue to grow year on year when their direct marketing activities are reaching just 37% of their customers, imagine how much more they’d grow if their direct marketing efforts were reaching that missing 63%

2- Of those companies that aren’t growing and, instead, are possibly struggling, the key to survival is staring them in the face
It stands to reason – if you use good, clean data, your results are bound to be better than if you don’t. Rubbish in = Rubbish out.

You Do The Math…

Data cleansing need not be an expensive exercise and in many cases, when compared to the alternative – working with unclean data – avoiding the perceived “cost” of data cleansing is counter-productive and, in some cases, nigh on insanity. Put into simple terms, data cleansing is an investment, not a cost. Let me give you an example:

Scenario 1 – ABC PLC has a budget of £1,000 and for that budget, sends a mailshot to its 1,000 customers. Of those 1,000 customers, 370 receive the mailshot and 630 are returned “Gone Away”. Of the 370 received, 5% take up the offer – 19 customers. They spend an average of £100 with ABC PLC, bringing in revenue of £1,900. After deducting costs, the profit is £900 and they have a database of 370 to continue marketing to.

Scenario 2 – With the same budget, ABC PLC spends £250 on cleansing its database. After cleansing, it has 750 “Good” records to send its mailshot to (some businesses have closed or can’t be matched etc). It sends 750 mailings (for £750) and all are received. 5% take up the offer – 38 customers. They spend an average of £100 with ABC PLC, bringing in revenue of £3,800. After deducting costs, the profit is £2,800 and they have a database of 750 to continue marketing to.

It’s a No-Brainer

OK, so the above example is simplified and focuses on a mailshot only, but it does highlight the false economy that many companies place on spending to cleanse their database pretty well, I think. And yes, the cost of data cleansing may differ – that depends on the quality of the database to start with. That said, since we offer free data cleansing audits, the first step of the cleansing process is very simple – a “No-Brainer”, you could say.

The example also transposes to telemarketing very well, since you also have to factor in a cost for wasted time calling dead lines, asking for people who aren’t there any more (then going through the process of finding out who does that job now etc), increased number of calls etc. As for emailing, there’s nothing more disheartening than sending a broadcast and getting a 40% bounce rate reported back – and the time taken to manually update all those records even if only removing the email address, rather than finding the correct new one (which would be done for you during a cleansing process).

So, if you find that your marketing activities are often met with an increasing volume of returned mailings, or an incredibly high number of email bounces, maybe it’s time you gave thought to getting your database audited and updated…

Joanne Clayton

If you are looking for new customers, I can help.

I help companies to get more new business by providing Business Data for Direct Marketing campaigns such as Postal, Telemarketing & Email broadcasting campaigns.

If you need any information, call me on 01274 965411 or visit http://databubble.info

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