Covid set to fuel 34% decline in customer data quality

Covid’s effect on the marketing and advertising sector has been well documented but as the market bounces back, there are fresh fears that a rapid decline in the quality of customer data will see many firms’ data-driven marketing performance suffer and sales hemorrhage.

So says the 2022 State of CRM Data Health Report from Validity, which quizzed over 1,200 CRM users and stakeholders across the UK, US and Australia.

For most businesses maintaining high quality data remains a challenge, yet at the onset of the survey over three-quarters (76%) of respondents still characterised their CRM data quality as either “good” or “very good”.

However, they later revealed that poor CRM data quality is actually costing their company new sales, with the same number of professionals (75%) stating inadequate outreach driven by poor data lost their company customers.

In fact, nearly half (44%) of respondents estimate their company loses more than 10% in annual revenue due to poor quality CRM data.

Heightening this tension between confidence and reality are the effects of the Covid pandemic, with 79% of respondents agreeing that data decay has accelerated at an unprecedented rate as a result of the pandemic.

A major concern with data decay is a lack of acknowledgement and remediation-focused support from company leadership; only one in five (19%) respondents said CRM data quality is a high-priority initiative for management. Meanwhile, 25% said bosses are aware of data quality issues but support no specific data quality initiatives and 14% said they are oblivious to data quality issues.

Unfortunately, 95% of respondents report data quality issues seriously impair their ability to fully leverage their CRM system and respondents estimate their CRM data quality will degrade by 34% by the end of 2022 if their company does not invest in improvements.

And, as most marketers recognise, poor data integrity trickles down to all levels of an organisation and can quickly snowball into overarching unethical data practices that hurt brand reputation and customer trust.

In fact, three-quarters (75%) of respondents admit employees fabricate data to tell the story they want decision makers to hear. Meanwhile, 82% say they are asked to find data to support a specific story, rather than provide accurate data. This means that overwhelmingly, leaders are making important business decisions based on manipulated and inaccurate data.

Low-quality data also has the potential to impact relationships among co-workers, the study claims, with 67% of respondents saying poor data quality creates tension between the CRM maintenance team and the marketing department, jeopardising employee satisfaction in an already difficult hiring climate.

These trends also extend to current CRM employees, who have less patience for low-quality data and usability roadblocks that make it difficult to do their jobs.

However, all is not lost as many companies are planning to address these issues with increased budgets and full-time staff.

Some 57% expect their company to increase data management budgets in 2022 while 56% of those who do not currently have full-time employees dedicated to CRM data quality have active plans to make hires in the next six months.

This fills a much needed gap as organisations globally have been relegating “mission critical” CRM work to intern and temp workers, the report claims, with a “whopping median” of 20 intern and temp workers for each organisation.

Validity SVP of marketing Kate Adams said: “Everything an organisation does starts with, and relies on, accurate CRM data – from marketing campaigns to sales development activity to providing an excellent customer experience and beyond.

“While the findings of this report may initially be bleak, there is hope. As the initial shockwaves of the pandemic ebb, many organisations are realigning their budgets and planning to invest in the betterment of their data health and quality.

“The upward trends of companies dedicating a portion of their budget to hire a full-time CRM data quality employee, and taking data quality more seriously in light of Covid-19 related data decay are highly encouraging.”