The data-quality dilemma

Rather than make the costly investment in acquiring new customers, many retailers are tapping their customer databases and using shopper data to increase targeted marketing efforts among existing consumers -- a strategy they hope will spur additional sales. Approximately 50% of companies, however, don’t completely trust the quality of contact data they have on hand, an issue that could jeopardize customer retention and sales efforts.

This message was revealed in “Contact Data Management: The Wise Investor,” a study conducted by Experian QAS, Boston, that reports organizations’ attitudes regarding data quality. The study is based on responses from 2,020 participants, including CEOs, VPs, directors and administrative staff who use data management across a variety of corporate functions.

These executives require top-notch, accurate data. Yet, only 50% of respondents reported they have a good level of trust in their contact data and believe it is clean, accurate and current. Fairytale Brownies, Phoenix, is one of these companies.

“Two times a year we do a ‘National Change of Address’ update, de-dupe our database and purge contact data, giving us a high level of confidence,” said David Kravetz, the company’s co-founder, and catalog and Web team leader.

Accurate data is more important than ever in the current economic downturn. Realizing it is expensive to acquire a new customer, retailers are working hard to exploit existing shopper relationships.

Companies may be focused on customer retention efforts, but only 45% of participants currently analyze their best customers’ shopping patterns to influence these marketing strategies. This task is only getting harder, as one in four organizations are not able to list their top customers, the study said.

According to the study, duplicate information causes the biggest problems in these quests, since it can distort reporting and make a customer appear to be of more or less value to the business.

Since clean and consolidated records are prerequisites to profiling data, the study urges companies to invest time and resources in data quality initiatives. The effort made sense to participants, but 55% of companies reported they either don’t have a strategy in place or were unaware of one at their organization.

Fairyland Brownies, a retailer of gourmet brownies, is one of the 45% of companies with a documented data-quality strategy, and it strives to continue improving its customer information. Feeling its demographic data could be stronger, the direct-to-consumer retailer recently embarked on a program to comb through customer ordering patterns to understand why and when shoppers make purchases.

The initiative will help the retailer strengthen direct marketing efforts and ultimately support Fairytale Brownie’s anticipated loyalty program. “We hope to use a point program to encourage re-purchase and targeted promotion e-mails that could spur sales around the holidays,” Kravetz reported.