How data quality is holding brands back from achieving customer loyalty

Take a dating site. If the information about the people signed up is not correct, up-to-date and in the right format, the consequences can be dire in terms of bad matches, miserable first dates and shattered romantic dreams. The website gets that awkward ‘it’s not you it’s me’ chat from disgruntled customers, who dump it for its hot young competitor.

This fact is not lost on eHarmony UK’s managing director and head of marketing Romain Bertrand. He admits that the business model is fundamentally dependent on having accurate customer information. “For us, data is not just a tool, it is at the centre of everything that the product, marketing, matching, trust and safety teams do,” he says.

Anyone signing up to eHarmony UK completes a lengthy 150-question survey and then data on how they behave on the site once they have joined, and whether each date arranged has been successful, is collected and analysed.

“When eHarmony enters a new country it researches specific issues such as culture and religion to find out exactly what people are prepared to share. We need to know if people match at different levels but also do they actually want to talk to one another?”

With burgeoning customer expectations brands must take action to improve their data management and thereby its accuracy, an increasingly challenging proposition as Experian Marketing Services points out that 90% of the world’s data has been created in the past two years.

Experian’s annually published Global Data Quality Research Discussion Paper this year reveals that CIOs believe their business could increase profits by an average of 15% if their data was of the highest quality and available in the right formats. However, the number of organisations who suspect their data might be inaccurate in some way has increased from 86% to 92% since 2014.

The volume of inaccurate data is also rising. On average, respondents think that 26% of their total data may be inaccurate, compared to 22% last year. There is a growing recognition of the cost implications that data errors have, with 23% of businesses saying that revenue has been wasted as a result, up from 19% last year.

These numbers come at a time when 90% of organisations are taking advantage of data and data quality to optimise their customer and prospect experience through better targeting or personalisation. And 95% feel driven to use data either to understand customer needs, find new business or increase the value of each customer.

In response, 84% of the respondents to Experian’s survey plan to make some sort of data quality solution a priority. This could include investing in new technology or recruiting more data specialists.

Of course, another reason for some of the inaccurate data brands have to cope with is the deliberate self-censoring by consumers of information they decide to share.

Research by Symantec reveals that one in three UK consumers admit to providing false data to protect themselves. Its State of Privacy research found that 49% of UK consumers are worried their data is not safe, with 59% claiming they have experienced a data protection issue in the past.

This is a worrying trend for marketers and advertisers because it comes at a time when impending EU data protection legislation could have a crucial impact on organisations, especially on small businesses.

The new data protection laws being considered by the EU would change the rules on how people consent to their details to be used for marketing purposes.The proposed new General Data Protection Regulation should harmonise data protection law across the whole of the EU. The legislation has been passed by the European Parliament but is still under discussion in Brussels (see data feature for more analysis).

Mike Gardner, head of intellectual property at law firm Wedlake Bell LLP, says the marketing industry should be particularly wary. “Although some of the more onerous obligations in the draft laws are intended to apply only to organisations employing more than 250 people, of which only the larger marketing businesses will be affected, the bulk of the proposed changes apply more widely throughout the industry,” he says.

He believes the most contentious issue with the new laws for SMEs could be the proposals on how people must give their explicit, informed consent to have their personal data processed for a specified purpose. “A failure to obtain the required consent before using the information could amount to a breach of the Regulation, giving rise to the possibility of large fines or even legal action by the individuals affected.”

In any small business data can be badly affected by a number of factors, including staff changes or inherited IT and data systems following a merger or acquisition. One SME investing significant sums in boosting its own data accuracy is venue-booking website HireSpace.com, backed by the founders of online restaurant booking site Toptable (now rebranded as OpenTable).

Hire Space head of content Ed Poland says the venues it works with need to understand the importance of clean, accurate and up-do-date data. The site has even produced a digital marketing content series to explain to venues the importance of consumer data and how this links to good customer service.

He says the website algorithms automatically give a search ranking boost to those venues that respond quickly to enquiries and gather positive feedback. In addition, the site’s marketing department has an internal feed of these venues, which it uses to shape its social media and content marketing strategy.

“Venues who always respond within about one hour to enquiries through the Hire Space website get the bulk of the exposure and, as a result, have made seven times more revenue in 2015 than those venues which engage less frequently,” says Poland.

His team also studies the terms used to inform keyword strategy and gathers data on click-through rates for venues within the site to build content marketing campaigns. “There isn’t much that we do from a marketing perspective which is not based on data-driven learnings from previous or existing customers so the information has to be accurate and cleaned regularly,” says Poland. “Our venues appreciate this and there has been a 26% increase in venues responding within 24 hours since we implemented the changes.”

Building on the link between accurate data and better customer service, and subsequent loyalty, should be part of many brands data management strategy in the immediate future. It will build trust and reduce the level of inaccurate data deliberately provided by consumers who are worried about privacy.

High street bakery Greggs is one brand that understands the link between data quality and customer loyalty. It recently introduced a loylaty shceme, driven by the fact that customers can be quite fickle in the food-on-the-go market.

Greggs knows that the data it holds on the 75,000 people who have already signed up – with 15,000 having a ‘live’ balance – must be up-to-date and correct to ensure offers are relevant. It is using technology from digital engagement company Eagle Eye, which stores an individual’s points balance and calculates the rewards a person is entitled to. Eagle Eye also works with Tesco, Asda, M&S and JD Sports.

The system provides Greggs with real-time data about who is buying what and when. The brand also has profiling information so it can send targeted rewards such as birthday treats, and the scheme allows data-led market research to help with new product development, something that can make all the difference in this market.

“We had a new hot dog which we gave away free to members. We asked them what they liked about it and asked those who did not redeem the offer why they chose not to. Was it just a product that did not appeal?” says Greggs marketing manager Moray Twaddle. “We also incentivised members who hadn’t yet loaded funds to load within a 14-day period in return for the reward of a sandwich. Effectively, we needed to use the data to segment those who had loaded from those who hadn’t loaded and send out different communications to each group.”

Whether you are selling a sausage roll or a Rolls-Royce, companies must take ongoing action to clean and update their data and find new ways to exploit the insight it provides. Daisy Group sells communications systems to businesses, and group marketing director Kate O’Brien says that unless data is clean and up-to-date even the best CRM system will just be “churning out rubbish”.

“If your customer intelligence is correct, technology can dramatically improve B2B analytics,” she says. “We can now find patterns within customer data that can be used to predict future behaviour and can really drive organic growth, in particular cross and up-selling and improved customer retention.”

She says developments like ‘voice of the customer’ feedback systems allow customers to describe their experiences in their own words and this can then be analysed to provide highly-detailed and structured data.

“Good data should provide the platform for making both strategic and tactical decisions in all areas of a business – from marketing to customer service. If you’re not all over it, your competition down the road certainly will be,” says O’Brien.

Having incorrect, unclean and out-of-date data costs brands money. At the same time consumers and regulators are becoming frustrated and intolerant of brands that get things wrong. The evidence is building that those who do invest in an effective data management strategy will boost consumer loyalty and revenues.