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The disadvantages of dirty data

Database management is critical to a successful bottom line and strong customer relationships.

Businesses know the importance of maintaining strong customer relationships. Without good interactions on a regular basis, companies would struggle to sell their goods and services and increase their revenue. Organizations have a variety of methods they utilize to store and manage their consumers’ information, but many opt for a digital database. This resource enables executives and employees alike to access materials relating to people’s address, preferences, contact information and more.

While databases are extremely helpful, poor management of the information can cause serious problems for businesses. Badly maintained data helps no one and companies can feel the consequences. SFG has a closer look at the disadvantages associated with dirty data. But first, what is dirty data?

“Duplicate information or incomplete records fall under the umbrella of dirty data.”

The definition
Company leaders may have heard the term in the past, but be unaware of what dirty data truly entails and the negative effects it has on their bottom line. According to TechTarget, database records that contain errors – whether via duplicate information, incomplete or outdated materials or troublesome transferal from other systems – are considered dirty. Understandably, consumer information that cannot be used can cause issues for organizations. Here are four negative situations businesses face when dealing with dirty data:

1. Lost revenue
Organizations depend on their consumer base to purchase their goods and services, keeping revenue moving – and hopefully, improving. When the data these companies use to get into contact with their current and prospective clients is dirty, however, their bottom line can take a serious hit. Failing to be able to communicate with people can result in lost revenue. That money can add up over time, especially depending on how long it takes businesses to clean up and manage their databases.

According to Experian Quality Data, the average company wastes 12 percent of revenue due to inaccurate information in their records and despite increased knowledge about this problem, the figure has not changed since 2007.

2. Wasted marketing efforts
Organizations’ social media and marketing teams are constantly thinking of ways to better engage their audience and encourage first and return purchases. These experts use various forms of outreach: email newsletters, Facebook posts to company pages and targeted promotions and coupons. Marketing leaders rely on data to be correct and without duplication to fuel their efforts and the sales that accompany that work, according to Digitalist magazine. When vital consumer information is wrong, the time, money and dedication these employees put into their outbound strategies is wasted. If businesses continue to squander their hard-earned resources using materials that are inaccurate, all parties will be negatively affected.

“Smart, data-driven decisions are impossible when company records are incorrect or out of date.”

3. Misinformed decisions
Over the course of their careers, executives will have to make a number of very important decisions regarding their businesses. Since data is so readily available these days, company leaders no longer have to rely on their intuition paired with guesstimations about their organization’s past and current performance.

It is challenging for businesses to gather helpful details surrounding important statistics and metrics if their records are all over the place. Data-driven decision making is a smart way for companies to make large-scale choices, but it’s impossible without accurate information. Comprehensive reports and forecasting rely on clean information to truly showcase how organizations can improve in terms of efficiency and effectiveness. Misinformed or under-informed decisions can be dangerous and leave businesses scrambling to compete within their industry, Business 2 Community said.

4. Poor customer experience
Outdated or incorrect consumer information doesn’t just affect company executives and employees, but their customers as well. When clients interact with a business they’re interested in purchasing from – or have in the past – they want the experience to be as easy and stress-free as possible. People expect organizations to have a handle on consumer accounts, and be able to pull up necessary information and history when customers call in, email or live chat a representative.

When dirty data is an issue, it’s not difficult for consumers to realize the frustrating problem. People can lose patience very quickly if something is wrong with their information, causing the interaction to become strained. As business employees attempt to save the experience, clients become more and more discouraged. As a result, customers may ask to unsubscribe to a newsletter, be taken off a communications list or not to be contacted in the future. A diminished client experience can be very detrimental to organizations, affecting relationships negatively over time, according to IT Business Edge.

Dirty data is a problematic issue for companies of all sizes and industries. It’s crucial for business leaders to be cognizant of the steps they have in place to maintain organizational records and ensure materials are up to date and correct for future marketing as well as inbound and outbound communications use. Managing databases can be a challenging task for companies to complete on their own. SFG is a third-party service provider that offers an integrated database management solution, among other tools. Essentially, SFG will provide not only the record-keeping software, but the management expertise to ensure information is as clean as possible.

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