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Data decay and the consequences for your business

Software and technology may sound exciting, but its investment in data that will deliver powerful results, writes Mike Pulvertaft, director at Conduit.

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Frighteningly, business data is currently decaying at a rate of 27%. The result of this can be seen in the wastage caused by mailing incorrect information.

Consider out of the £1,233m spent in 2001 sending business-to-business mailings, a staggering £220m was wasted targeting incorrect people or companies. What should be more worrying for businesses is that this figure is growing year on year and, with the current economic climate and possible downturn within the marketing industry, this is a cost that many businesses can not afford to bear.

However, many companies still don't see the relevance of correct database management and it is often seen as a source of irritation. But should it really be this difficult? Most companies see the resolution through investment in expensive software, then you add your database and hey presto, profitable results? Sadly, it is seldom this simple.

The reality is that software sounds fun, whereas data is dull. Software

generates multi-coloured 3D graphs, performs lightening quick queries, digs down to identify the smallest of trends. But all the time the data is

hiding its selection of soul-destroying surprises. In fact, the data is what

really determines a campaign's success. An analogy could be building a house, and spending all your time and money on getting the latest and greatest building equipment and tools, and nothing on the materials and content.

The end result of this approach is that when companies specify requirements for database solutions, (which ubiquitously morph into CRM solutions), the main focus is usually on the functionality of the software. The few pence left over is then used in an attempt to get the information into a workable form.

Of course, the right software is important. However, companies must ensure that they have an understanding of the underlining aim; namely deriving clear, accurate and targetable information from the underlying data.

Obtaining the right software is only 20% of the solution. The use of

software should be seen for what it really is -- a tool that can

indeed help to bring radical improvements in business performance, but only if the core information allows it.

The data stakes are now a lot higher. The business environment is now far more competitive with relatively little differentiation between competing products; this being the case so it's often the quality of information you hold that gives you the upper hand as well as save the money. However, how do you ensure your customers stay loyal and you don't alienate them?

Data protection legislation has elevated the business person to the status of an individual with all of the associated rights. How do you stay within the law and still generate the new business you need to commercially survive? All these are issues that effective data-driven marketing needs to address.

The other side of the coin is the threat of not adhering to the Data

Protection Act. Monthly screening against the TPS (Telephone Preference

Service) list is feasible with a centralised database. However, trying to

perform the same process on 4,000 contact cards each month, in an attempt to identify the business 'individuals' that may or may not have registered on the TPS file in reality is very difficult.

In this case technology, while only 20% of the solution, can prove its

worth 100%. Whether database quality management is dealt with in-house or outsourced, technology now enables marketers to follow exactly how their data is performing. Using advanced database models and secure communication links, data "quality" can be maintained by organisations with the tools and knowledge at an affordable rate. The location and physical form of the data becomes transparent to the users, leaving them free to concentrate on the information within the data while having the confidence of it being accurate, "useable" and up to date. This "real-time" confidence in the data enables the ability to carry out timely mailing and telemarketing campaigns and ultimately leading to increasing sales.

As markets get more competitive and finding and keeping customers becomes increasingly important, the quality and availability of data becomes of even greater importance. Crucially marketers can harness this advantage to segment their target audience into distinct groups or clusters.

In this way different creative campaigns can be developed for each sector -- a more targeted approach leads to that all-important differentiation from competitors and is a key driver of sales and profits.

So technology is starting to add value to the data itself. If used to its

full potential, this could be the answer the industry is searching for to

reduce the amount of marketing budget that literally goes straight in the


There's no getting away from the fact that database management is a time-consuming and costly exercise, but it really can deliver incredibly powerful results. Companies need to realise that software is only part of the answer and if you don't invest in your data then the amount of wasted budgets each year is only going to keep increasing.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.

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