Data Quality Impacts Firm Performance
With all the talk about Big Data, data quality sometimes gets lost in the shuffle. The fact is, if your database is not of high quality, there will be a number of serious consequences to your business. I recently gave a talk at eMetrics in Chicago on Organizing for Customer Data Management. As part of my presentation, I spoke about how to organize your company for data quality and the fact that customer data quality leads to better firm performance.
Are B.D. Zahay and D.Z. Blatz the Same Person?
If you are skeptical, let's look at an example below. I recently received two credit card offers from the same company, two different names. Let me explain that I was Debra Zahay and then upon my marriage four years ago, I became Debra Zahay Blatz. I changed my name legally with the DMV and social security administration.
How Come I Get a Better Offer if You Don't Know Me?
Like any marketing professional with roots in direct marketing, I enjoy analyzing my mail offers. Perhaps the most interesting mail recently was this set of offers. The offers were to the same address, but two different offers to two different names, one person. The first offer was to my real name, Debra Z. Blatz for a credit card I hold, with an offer for 0% promotional APR for balance transfers until 6/1/2014. Since I don't really carry balances on my card, this was not a very interesting offer or relevant to me.
The second offer was to someone called Blatz D. Zahay. Apparently in some computer systems,upon marriage, the woman retains her maiden name, but takes the man's last name as her first name and makes her old first her middle name. Blatz D. Zahay got a really good offer for a credit card with 0% APR on balance transfers AND purchases for 21 months, not just until 6/1/2014. The card also offers travel rewards.
As I look at these offers I can see that the company though that B.D. Zahay was a new customer and made a better offer to her than D.Z. Blatz, a current customer. If you know anything about data cleansing and data quality, most merge/purge processes would have picked this up because the address was the same. I am guessing that what really happened is that my name got mixed up on some list or other and that this list was purchased by the company for prospecting purposes. Most companies still tend to treat new customers better than their current customers, even though it is customer retention that leads to profitability.
Poor Customer Data Quality Can Impact Customer Relationships
The negative aspects of what happened to me could be that I realize that the company doesn't know who I am and that I would get a better offer if I were a complete stranger. This realization could lead to my seeking credit card relationships elsewhere. This data management strategy also leads to the wrong offers going to the wrong current customers. A little research would have shown that I don't really carry card balances on my personal credit card accounts. Being smart about customer data quality means not making offers that have no relevance or might anger the customer.
Being smart about data quality also requires patience, good processes in the organization and good support from upper management. The focus can't just be the current bottom line but what will happen with the customer relationship. Maybe the company has figured out that it doesn't matter if it makes a few people re-think their relationship with the company. That is not a chance I would like to take but I do understand that the firm may have analyzed its bottom line and realized that some customer opinions and reactions don't have that much impact on performance.
Learn How to Organize for Customer Data Management.
You can look at my Slideshare for the presentation on how Organizing for Customer Data Management, leading to data quality in the organization and better firm performance. Int the talk I ask if everyone knows that customer data quality is important, why isn't everybody doing it? The answer to this question is because data quality is difficult to achieve and maintain and requires top-level involvement. I will be exploring various aspects of this presentation over the next few weeks. My talk covered over ten years of research with over 400 firms so there is a lot to explore and discuss. I look forward to your comments.
By Debra Zahay-Blatz.
You can find Debra on Google+ and Twitter as well as LinkedIn.