In business, smart leaders know that waste eats into profit. From day to day, project to project, the best way to improve your bottom line is to slash unnecessary expenses from the business’ budget.
When we think of expenses, we think of cutbacks in equipment, or hiring fewer staff. How many of us consider the affect that bad data has on the business? Many businesses underestimate just how much this could cost them.
In business, smart leaders know that waste eats into profit. From day to day, project to project, the best way to improve your bottom line is to slash unnecessary expenses from the business’ budget.
When we think of expenses, we think of cutbacks in equipment, or hiring fewer staff. How many of us consider the affect that bad data has on the business? Many businesses underestimate just how much this could cost them.
Understanding the Half Life of Data
In this article, we’ll illustrate the longevity of data using a scientific analogy. Let’s just take a second to explain it.
Radioactive substances have a half life. The half life is the amount of time it takes for the substance to lose half of its radioactivity. Half life is used more generally in physics as a way to estimate the rate of decay.
We can apply exactly the same principle – the rate of decay – to business information. Like natural materials, data is subject to deterioration over time.
In science, the half life of a given substance could be milliseconds. It could be many thousands of years. The half life of data has been measured, and it may be shorter than you were expecting.
Data Decay: the Facts
B2C
In the UK, there are around 63.2 million people living in 26.4 million households.
Looking at the population, in a typical year:
- 5.1% move house
- 1.3% are born
- 0.9% die
- 0.2% divorce
Some individuals will go through many changes. For example, they may marry, move house and have a child within the space of a couple of years.
Already, we can see that B2C data is very vulnerable to decay. Businesses are storing static data about living, breathing individuals who rarely stay still for long.
B2B
Now, turning to B2B, we have a whole new set of challenges to face. In additional to personal data decay, we have decay associated specifically with business.
There are 4.93 businesses in the UK. 0.6 million are dormant; the rest actively trading. Among the businesses that are active, there are thousands of changes every day. Addresses change, bank accounts change; businesses go through a constant process of evolution and growth. In terms of the workforce, people are constantly changing jobs, changing their names, switching departments, setting up their own companies and taking on second jobs elsewhere.
Why It Matters
The impact of data decay cannot be underestimated. There are four main areas where a business feels its effects most.
Financial Impact
- Each year, UK businesses waste £220 million sending mailings to the wrong people. If someone has moved house or passed away, that mailing is a complete waste of money.
- The same applies if your database contains duplicate data. If the same customer receives mail multiple times, that mail will be thrown away.
Marketing departments can easily increase response rates and show better return on investment; simply suppress the inaccurate records and your rate goes up.
Brand Impact
- Multiple mailings can harm credibility. If the customer feels they are being bombarded with extra catalogues, or if they are being sent someone else’s post, they are bound to view that company less favourably.
- Sending mail to a deceased person can be a serious cause for distress to family members. Any brand that does not cleanse its database could risk upsetting relatives and friends.
- When people move house, the last thing they want is someone else’s mail. Persistent misdirected post can become a real irritant.
Compliance Issues
The Direct Marketing Association issues guidelines as to the conduct of its members. When you don’t maintain your database, you risk violating the terms that the DMA sets out.
There are a couple of more serious problems that can occur:
- Customers can register their telephone number with the Telephone Preference Service to avoid receiving unwanted calls. Contacting someone who has registered is illegal.
- The same laws exist for direct mail. Sending mail to a registered member could be illegal.
Environmental Issues
Cutting your carbon footprint is a major factor in maintaining an eco-friendly position. Customers are increasingly looking for partners and suppliers who prioritise green credentials.
Cutting waste has the additional benefit of reducing paper waste, helping the business to puts its environmentally friendly policies into action.
Taking the First Steps
You are reading this article because you are interested in data quality. Don’t make the mistake of assuming that you are a typical employee. Most people have yet to encounter data quality as an important challenge; they may not agree with your position and desire to act.
DQ Global’s data quality solutions have been designed to suit the needs of every part of the business. Across every workstream, from top down, there is a data quality solution that fits the bill.
Perhaps the biggest bonus is the ability to scan across databases, matching and merging data and cleaning up mistakes. DQ Studio™ is a tool that can perform six key operations:
- Classify: is the data what you expect?
- Compare: how similar is the data?
- Format: are the fields holding data they should be holding?
- Generate: DQ Studio™ can create tokens that help it match record for record, even if the written information is not exactly the same.
- Transform: DQ Studio™ can convert data from one language to another, making it useful for businesses working globally.
- Validate: The software automatically checks that data is in the right format and is usable in its current state.
With DQ Global, you can implement data quality tools that actually integrate with your existing systems, meaning less training and fewer mistakes.
Conclusion
The half life of your data is probably shorter than you think. If you don’t act, your data will decay to the point that it’s next to useless. Can you afford for that to happen?