Data quality problems may be as old as the hills but companies still haven’t grasped the issue, according to new research from Royal Mail Data Services, which shows each year UK companies lose 20% of their customers due to out-of-date contact information.
In the new report, Life Events: The Hidden Marketing Key to Solving Customer Churn, in association with Data IQ, 45% of UK marketers say recruiting new customers to fill this leaky bucket is their biggest challenge, while the other 55% struggle to retain and upsell to current customers.
Yet, as they attempt to meet these dual challenges, 70% of marketers say their efforts are thwarted by out-of-date and incomplete customer contact information, the study shows.
This is perhaps not surprising, given that less than half (46%) of brands automatically verify customer contact information collected online, and 22% of companies never verify their customer contact data at all.
Marketers say that poor-quality data most impacts their effectiveness in maintaining accurate customer contact information (ranked 3.74 out of 5), as without accurate contact information businesses cannot gain additional insight about their customers. Data also affects marketers’ ability to target and analyse their customers (ranked 3.63 out of 5).
Despite these issues, and marketers recognising that accurate customer information is the lifeblood of an effective marketing effort, less than half (49%) of brands supplement their customer data with third-party data to gain more complete understanding of customers and prospects, such as their purchasing behaviours and life events.
More interestingly, 70% recognise that life-events, such as moving home, a new addition to the family or an intention to move abroad, gives brands a reason to engage with customers and prospects.
However, just half of marketers recognise these moments of major change as new sales opportunities, and only 44% gather life-events data from their consumers to enhance their customer contact information.
Given this disconnect between opinion and action, it is not surprising that marketers still feel that a change of email address is the most critical type of life-event customer data they can collect (ranked 3.98 out of 5). This is also reflective of the popularity of email, with 87% of companies relying on it its low-cost accessibility to attempt to reach customers and prospects.
Royal Mail Data Services managing director Jim Conning said: “Reaching a consumer with a relevant message at a key moment in their life enables marketers to build customer loyalty and re-engage.
“With average annual churn rates standing at 20%, businesses are having to spend twice to regain lost customers and stop others from leaving them. Brands must find new ways to harness better the power of their customer data if they are to understand not only who and where their customers are, but also when and why they need a specific product or service.”
Royal Mail Data Services maps customer data and purchasing behaviours against comprehensive UK consumer life-events information, including its Home Movers database, to help brands reach customers with relevant messages at critical moments.
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