Despite the “instant gratification” that technology has trained us to expect in all aspects of our work lives, being competitive requires thought, strategy, creativity and a rather sizable and significant investment of time, energy and budget. In fact, Insider Intelligence predicted that U.S. B2B ad spend would reach $35 billion in 2023. That’s a 9 percent increase from 2022, and a 58 percent increase from 2020. This begs a few questions:
- Are you getting what you expected from the investments you made?
- Are your campaigns driving engagement, winning leads, and securing sales?
- Have your results, thus far, been a delightful surprise or a bit of a letdown?
If you’re like most savvy marketers, you find a kindred spirit in the description of Prince’s mom in the song, When Doves Cry – “never satisfied.” You know there is something more out there, something you can’t quite put your fingers on, or can you? In today’s blog, we’re going to talk about the role your data plays in delivering the kind of satisfaction that always seems so elusive, but in reality, is totally accessible.
Actions Have Consequences, As Does a Lack of Actions.
Think fast: if I scrubbed your data right now, would I find it clean, complete and well-connected throughout your martech ecosystem, or would I need to wear a Hazmat suit? While it may seem a small thing, something as simple as an outdated title, misspelled name, or wrong mobile number (all examples of poor data quality) can have far-reaching consequences. Here’s what happens when you don’t keep your data squeaky clean and ready for action.
- Bad Data Is a Financial Drain.
According to a study conducted by Sirius Decisions, B2B companies across the U.S. estimate that up to 25% of their marketing and sales budget is wasted due to poor data quality. Thanks to the good folks at Mezzanine we can easily put this into perspective:
“The rule of thumb for B2B companies is a marketing budget of 2 – 5% of gross target revenues. If your business is targeting $15M in revenue, a total marketing spend of $300,000 – $750,000 is the benchmark. This includes staff, programs, advertising, tradeshows, etc. – everything in your marketing function.” —Excerpt From A Marketer’s Secrets to Setting B2B Budgets
Thinking about the current state of your data, how comfortable are you with flushing 25 percent, or somewhere in the neighborhood of $75,000 to $187,500 down the toilet? Conversely, think about what your results might be if you were reaping all of the rewards from that money being well-spent, thanks to your ability to leverage your marketing data to make more accurate sales forecasts, identify new revenue targets and allocate resources more efficiently and effectively?
2. You Paid What for Who?
Back in the 1990s when Indecent Proposal was a top-ten film, there was an old joke going around whereby people would approach someone in a bar and say, “If I gave you a million dollars, would you go home with me?” If the target of the joke said no, you upped the ante till you found their price. Once they acquiesced, you came back one last time with something insultingly low, like a dollar. When the target protested, you would then deliver the punchline, “I’ve already established that you’re for sale, now we’re just haggling over the price.”
Poor Data Quality Means You Pay More for Less.
In a study conducted by the Harvard Business Review, it was found that many B2B businesses spend up to 25 percent of their marketing budgets on efforts that target the wrong audience, thanks to inaccurate data. When you are sending the wrong campaigns to the wrong people (one of the many negative consequences of poor data quality), it leads to higher customer acquisition costs, as well as a lower return on investment (ROI). This is also known as a lose-lose situation and sometimes a negligent and fire-worthy offense.
3. 25% Is a Magically Toxic Number for Poor Data Quality.
Speaking of paying more for customers, Gartner maintains that poor data quality is a major contributor to declines in customer satisfaction, which ultimately leads to churn. Before you reason that you can’t please everyone, the average percent of customer misery created by bad data is 25 percent, and let’s face it, everyone in marketing likes to believe they are above average.
Work It. Work It. Own It. Churn It.
So just how is this bad data working its toxic magic? Shapeshifter that it is, it shows up as essentially anything inaccurate in your customer information records, such as outdated contact details or an incorrect purchase history. This in turn leads to ineffective communication and poor customer experiences, which results in higher customer churn rates. And as if all of that weren’t enough, the real end result sucks the life out of both your revenue and profitability.
4. Q: Is Your Data Sandbagging Operations? A: Most Likely
Experian Data Quality recently shared that 94 percent of businesses report they face challenges due to poor data quality, and 29 percent of those businesses experience serious problems with inefficient operations. Here’s the deal, when you have inaccurate data gumming up the works, it leads to errors in orders, order fulfillment, inventory management, and logistics. This, in turn, results in a measurable increase in costs, as well as an equally measurable reduction in customer satisfaction.
5. Unlike Joan Jett, You Should Give a Damn About a Bad Reputation
Bad data is like smoking on the kindergarten playground, it firmly establishes you with a bad rep, whose stench you won’t be able to escape from for years, if ever. When we talk about poor data quality giving you a rep for being someone no one wants to hear from, we’re talking about being known for embarrassing gaffes, like sending sensitive customer communications to the wrong recipients, misspelling names, sending irrelevant campaigns inviting people to sign up when they already have. These are the kinds of blunders that not only lead to a loss of credibility among your existing customers, they also likely land you at the top of a lot of spam, opt-outs, and blacklists.
A Bad Reputation Gets Real Expensive, Real Fast.
It’s one thing to know the quality of your data is not up to par; however, it’s an expensive offense for those who push on blindly thinking that claiming ignorance will somehow help them escape FCC fines. Inaccurate and incomplete data makes it exceedingly difficult to meet data privacy requirements and ensure the security of sensitive customer information. When you have poor data quality, it’s like having bronchitis at the office picnic, you put everyone at the company at risk of being out of compliance with data protection regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
6. Shoulda, Coulda, Woulda, the Mantra of Missed Opportunities
When B2B customer and prospect data is inaccurate it has a bad domino effect. First it hinders your ability to segment your markets correctly. This makes it tough to identify new opportunities. And don’t even get us started on how you absolutely cannot personalize communications with bad data, much less products, services, and customer experiences. Consequently, businesses may miss out on potential growth and lose their competitive edge.
You Can Handle the Truth
Now that you see the significant impact poor data quality can have on your B2B business, your next step is to do what every ABC After School Special counseled you to do:
- Admit you have a problem.
- Reach out for help. We love helping folks put an end to dirty data issues.
- Clean up your data. Here’s a little blog we wrote to help you get that party started:
Marketer’s Guide to 7 Best Practices for Enhanced Data Cleansing