UK businesses are being urged to harness the full financial potential of their data on the back of a new study which claims firms are missing out on more £8bn in untapped revenue.
According to independent research by Experian QAS, only 44 per cent of UK businesses are investing in data quality with a view to generating revenue.
If UK organisations with 250+ employees fully harnessed the revenue generating potential of their data by better managing information, the total financial boost to UK PLC would be at least £8bn, claims the study. For an individual organisation, this could improve the bottom line significantly, with an average revenue generating potential of between £431,000 and £9.3m over a two-year period, depending on the size of the organisation.
These financial returns are delivered through a better understanding of who and where customers and prospects are, ensuring better quality sales leads, encouraging longer term customer relationships and prompting repeat purchases.
Efficiencies are also gained by reducing the significant costs attached to inaccurately addressed or ill-targeted direct mail and other communications. All of these returns are directly related to improved data management practices.
While the majority of businesses have not fully seized the revenue potential of good data management, it has nevertheless risen up the board’s agenda as businesses take advantage of its ability to increase their efficiency (66%) and reduce costs (50%).
Despite more recognition of the importance of data, this is yet to translate into practice, as 90% of UK organisations suspect that their customer and prospect data is not completely accurate. The potential for revenue generation through better management of data is considerable, but the research suggests that antiquated data quality methods are holding companies back. For example, a staggering 42% of UK organisations carry out data analysis using Excel spreadsheets to detect data quality issues.
The over reliance on manual methods is exacerbating poor data quality, with 50% of businesses that lack complete trust in their data blaming human error for poor data hygiene and inaccuracies. The result is that resources are wasted and brands are damaged due to misdirected customer communications.
In the UK in the past three years, over a third of companies have sent mailings to the wrong address and 27% have mistakenly sent multiple mailings to the same postal address. The research suggests that many companies are investing precious financial, staff and material resources in direct mail activities that may actually result in negative brand perception and poor customer service; ultimately resulting in lost sales.
Although only 44% of UK businesses are investing in data quality with a view to generating revenue, in the last two years 81 per cent of UK organisations have made improvements to the way they manage their customer and prospect data by upgrading their data management systems.
According to the research, 43% use dedicated point-of-capture software that guides data input and verifies contact information as it is being entered. Some 39% also use dedicated back-office software to clean contact data after it is submitted into the database.
Experian QAS UK managing director Joel Curry said: “We are living in a digital world from all touchpoints. The research clearly shows that UK organisations are increasingly seeing the importance of data management, but too many are using old fashioned methods to solve a complex modern problem.
“This is a missed opportunity and businesses need to invest in the right tools to improve the quality of their data to embrace the financial rewards, improved customer service and brand perception that great data quality can bring.
“Above all, the customer interface of these products and services should be simple and deliver against organisational objectives.”
The study is based on interviews with over 1,300 IT decision makers in seven countries – of which 303 were from the UK.
