Data Rot: What is it, and how much is it costing you?

Data Rot: What is it, and how much is it costing you?

What is data rot? As explained on, B2B data decays or rots at a rate of 2.1% per month. This equates to a third of your business data becoming outdated each year, which can impact your marketing efforts, lead generation activities and customer relationships. Here we explain why preserving data quality should be a top priority for your business…

Data rots because the world is constantly turning. People marry, move houses and change jobs. In the B2B market, businesses merge, change email conventions, open up new offices or close down. Consequently, without an effective data management strategy, up to 30% of your contact data can become outdated each year.

How does data decay affect your CRM system?

CRM systems provide a central location for you to store customer and prospect data. You can then use this information to build a more accurate picture of your customers and approach them with the right message at the right time. Maintaining your CRM data will aid your business’ success, allowing you to improve customer relationships, drive sales and increase retention.

Unfortunately, many businesses neglect to maintain their data. Thus, their CRM system becomes full of old and inaccurate contact records, resulting in emails bouncing, mail being returned and phone numbers not reaching the correct person. Inaccurate data leads to wasted time and money spent on marketing campaigns that are not targeted correctly, as such trust in your data will be lost and your CRM system will become underutilised.

The effects of data rot

Wasted money

Data inaccuracies affect the profitability of your organisation, limiting your ability to reach your customers and prospects effectively. According to research, UK businesses waste £220 million a year sending out promotional mail to incorrect addresses.

Loss of competitive advantage

By ignoring the issue of data rot and decay you will not be able to compete effectively against those that do have data management processes in place.

Hefty fines

The Information Commissioner’s Office (ICO) can issue monetary penalties of up to £500,000 for a serious data breach such as contacting customers registered with the Mailing (MPS) or Telephone Preference Service (TPS). Every day in the UK 1,800 people register with the MPS and 3,000 with TPS, which is why it’s imperative you stay on top of any changes to avoid unnecessary fines.

How can you improve your CRM data?

Cleanse regularly

Your CRM data should be cleaned on a regular basis, allowing invalid or false information to be updated or removed. For time saving, use address validation tools that can check and correct your customer records in real time or on an ad-hoc basis. If your data hasn’t been updated for a few years, outsourcing data cleansing to a third party can save you vital time and money, allowing you to focus on what matters the most – your business!

Ensure data quality at the point of origin

If you buy data from data providers, check how they build and maintain their information – can they prove the rights to use this data? It’s also important to understand how frequently information is updated and how you can use it. Some companies sell data for multiple uses, whilst others may grant a single-use licence.

Implement a rigorous data maintenance strategy

Introducing processes and standards outlining how to capture and maintain your CRM data will allow you to prolong the life and usefulness of your information. This should include everything from the point of data capture to validation regime to ensure everyone within your organisation knows how to record it and where to store it. Depending on the volumes of data you hold, you might want to nominate a data ambassador who will ensure data quality is given the focus it deserves.

The longer you ignore your data quality, the worse it will get. Research by Experian Data Quality shows inaccurate data has a direct impact on the bottom line of 88% of companies, with the average company losing 12% of its revenue as a consequence. With so much at stake, it’s time to implement data-driven initiatives and combat data rot for good!

CRM Insights helps businesses attract, win and retain more customers. Whether you need to improve your existing CRM system, commission a new one, or convert more of your leads, we give you friendly, cost-effective advice and support. From our base in Peterborough, we’re in easy reach of Huntingdon and Cambridge, and work with a wide range of clients across eastern England.

Contact us here or give us a call on 01733 902340 if you need help planning and implementing your CRM strategy.