Businesses need to take a long-term view when it comes to data

There's more to the customer data journey than collecting an email address, writes Validity Inc manager customer success APAC, Nhan Tran.

Preventative maintenance is a necessary (if not particularly exciting) part of life. If you don’t service your car or go to the dentist, the results aren’t great. It’s the same with customer relationships, however in this case, the oxygen that sustains the lifecycle is good quality data. And despite what some businesses might like to think, getting your customer data in order is far from a once-off, set-and-forget activity.

Consequences of taking a short-term view 

The consequences of not prioritising data are far-reaching and most businesses don’t realise how significantly it can impact revenue. Validity’s State of CRM Data Management report found that 44% of businesses estimate poor quality data is costing them between 5% and 20% in revenue. That’s huge.

Take a business that suspects it has issues with its subscriber data because it’s experiencing high bounce rates. They take action to address this by implementing a tool that validates email addresses in their database and removes invalid entries. This is a great start, but often they won’t take this any further by adopting an ongoing maintenance plan. This means that they’re opening the back door for more dodgy email addresses to potentially enter their database as they’re trying to push invalid addresses out the front door.

Just because information is valid when it enters a business’ database doesn’t mean it will stay that way forever. Subscribers may switch to a different mailbox provider, their interests or preferred means of communication change, or they switch jobs and their work email is deactivated. Without long-term action to keep your data up to date, the effectiveness of essential communications and marketing campaigns will be seriously impacted, which in turn drags down ROI, and ultimately the business’ bottom line.

Benefits of taking a long-term view 

Many marketers understand the need to take a long-term view, which is why they’re increasingly using Customer Lifetime Value (CLV) as the primary measure of success for their programs. CLV goes up when customers increase their average spend, frequency of transaction, and remain customers/subscribers for longer. And taking a long-term view of data helps to achieve all these outcomes.

While marketers understand this, getting the C-suite and other decision makers over the line can be a little trickier. To help them see why data requires a long-term outlook and investment, it’s helpful to remind them that not only are they in competition with their direct competitors, but that they’re also competing with businesses of all types in subscribers’ inboxes. In fact, the subscriber experience they offer is as important as their products and services.

To know what subscribers want and to provide a great customer experience, businesses need to build a long-term strategy that allows them to capture enough relevant data about their customers and then apply segmentation and personalisation to create bespoke communications that will resonate. This creates trust, and trust creates loyalty – meaning positive impacts for long-term customer lifetime value.

Taking action

To better leverage your business’ customer data and to help your clients do the same, an important first step is identifying all the potential data touchpoints in the customer lifecycle and ensuring you have steps in place to gather information at each of these. These range from the acquisition stage when a customer subscribes or first makes a purchase, each time you interact with them ongoing, and even at the end of a customer relationship by asking for feedback in an exit survey.

In addition to collecting customer data, businesses need to implement regular maintenance processes to keep their data in good shape — i.e. only keep valid email addresses, no duplicates, missing details, incorrect abbreviations, etc. Fortunately, there are lots of great programs that can do this automatically, freeing you and your team up to be creative about how to provide value to your customers.

The benefits of taking a long-term view when it comes to data are numerous and significant. Treating data as an administrative task to be undertaken on an ad hoc basis means you’re likely allocating your budget based on outdated and inaccurate insights – a sure way to limit results and revenue. The more you know about your customers and subscribers, the better equipped you are to create communications and marketing initiatives that will resonate with them. This information simply can’t be collected overnight though, it requires planning and ongoing investment.

It’s businesses that dedicate time and resources ongoing to collecting and maintaining customer data that reap the benefits of their investment many times over.

Nhan Tran is the manager customer success APAC of Validity Inc.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.