Data hygiene may not be the most exciting topic, but its impact on your bottom line can be riveting — or horrifying — depending on how well your organization does it.
ZoomInfo statistics show just how costly dirty data can be. Up to 25% of B2B database contacts contain inaccuracies, causing 40% of business objectives to fail. What’s more, it costs $100 per record if nothing is done to correct the inaccuracy! In fact, bad data costs U.S. businesses more than $611 billion each year. That’s a high price to pay for lack of data hygiene.
Despite the scary numbers associated with bad data, it’s often difficult to convince executives to get on board with implementing data management programs. When this is the case, creating a compelling story for why data management is critical to your organization’s growth and success involves putting a dollar sign on dirty data.
How One BDO Digital Client Justified the Need for Data Management
Recently I helped a client determine the cost of dirty data. They were experiencing poor results in several areas and believed that data issues were the root cause. The D3 Methodology teaches us that data is arguably the most valuable asset of any organization, yet so often companies make an inadequate investment in maintaining its integrity and hygiene. However, convincing management to launch a data management program had been an uphill battle.
I saw the problem clearly: My client was basing his argument on the dangers of missing data, not on the cost to the business of having dirty data. Realizing that a cost-based analysis would garner more attention from top execs, we switched gears. We created a compelling argument to justify the need for data management by identifying four areas in which the business was leaving money on the table:
1. Lead Scoring. The client had no lead scoring in place. As a result, only 10% of the leads Marketing sent to Sales over the previous six months converted to pipeline. Of those, $1 million was closed. According to Aberdeen Group, best-in-class companies using lead scoring average 28% conversion. Applying that metric, the client could have added $1.8 million more in revenue to the business with a proper lead scoring model in place. But dirty data makes creating a workable lead scoring model impossible, because doing so requires rich, accurate data. The cost to the business: about $900K per quarter.
For a marketer seeking budget justification for data management, the possibility of $900K additional revenue per quarter is a much more compelling story than reporting on missing data. What would your executive team care more about: “15% of the database has no job title,” or “we can add $900K in revenue if we have accurate data”?
2. Lead Management: The client had been assigning leads through their CRM based on geographic territory, but poor data quality was making rules-based lead assignment impossible. As “time is the enemy of all deals,” a 30-day gap between lead routing and follow-up was having a major impact. Clean, accurate data could cut that delay in half, enabling the right rep to access the lead before it cooled off. That’s a softer metric, but if you can correlate shorter cycles to larger deals, you can demonstrate true financial impact, even if only a portion of those slow-moving leads can be accelerated.
We discovered that 32% of the qualified marketing leads had no owner, which was critical information for the client. Even more compelling were the potential efficiencies and incremental revenue made possible by cleaning up the data.
3. Lead Nurturing: Depending on where the lead is in the buyer’s journey, nurture programs can provide key education about your solution or even help the lead justify selecting your product. According to Gartner Research, lead nurturing can potentially save 80% of your direct mail budget and bring a 10% or greater increase in revenue over 6-9 months.
At this firm, the data needed to hone messaging for target audiences — industry, product interest, stage in the buyer’s journey, and so on — wasn’t always available. As a result, nurture campaigns were in a one-size-fits-all format and not converting.
The client had been using low field completion rates as an argument for data management, but a better approach is to show a direct impact on budget and a direct tie to revenue. How much can you save if you reduce direct mail costs by 80%? How much revenue is a 10% increase every six months? Calculate those numbers, and you’re sure to grab the executive team’s attention!
4. Useless Data: We estimated that dirty and incomplete data made 35% of the client’s database potentially useless. Calculate 35% of your current contract with your marketing automation provider – that’s money wasted. Either renegotiate your contract or work to replace useless leads with new potential business.
The Next Step
My client secured approval for moving forward with a robust data management program. By examining each of the topics mentioned and tying actual costs to them, she demonstrated that a lack of data hygiene was having a significant impact on revenue. As a bonus, she developed some target KPIs that she can use to demonstrate progress achieved by implementing the new plan.
Could your CRM database or MAP benefit from any of these efforts? Do you need to make a business case for fixing your dirty data? BDO Digital can work with you to design a phased roadmap that focuses on the initiatives that deliver the biggest financial return, in the shortest amount of time.
Contact BDO Digital today and get rid of the dirty data that’s costing you.
Gaea Connary serves as Manager of Agile Transformation at BDO Digital. She is continually fascinated by creativity and agility in developing marketing technology, and has helped many organizations revitalize their marketing efforts with hands-on guidance and innovative tech applications.
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