Take Out the Garbage | BTalk Australia

Is poor quality data costing you money? Most businesses in Australia believe so but almost half have no idea just how big the problem is.

Today on BTalk Australia Phil Dobbie talks to Matt Glasner, General Manager of Experian QAS for Australia and New Zealand, about how you can improve the quality of your contact database.

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• Today’s Transcript

Dobbie:  Hello, I’m Phil Dobbie. Inaccurate data is costing your business. That’s today on BTalk Australia. The question is, of course, how much is it costing your business? Matt Glasner is the general manager for Experian QAS in Australia and New Zealand. Matt, what sort of data is it that we’re talking about first of all?

Glasner:  We’re talking about contact data, typically the organisation; the data organisation is captured to manage and maintain communications with their customers. And also the same data that they’re measured on from a compliance perspective. And they use for day-to-day business transactions such as billing, invoicing and marketing campaigns.

Dobbie: Now having that data as unclean data I guess is costing businesses because you’re making the wrong decisions based on that data, or is it more direct costs like you know sending mail shots out to the wrong people? Or a bit of both?

Glasner: I think it’s a lot of both actually. There are a whole range of issues relating to poor contact data. One is on the marketing side, so lost revenue opportunities, miscommunications and associated dead mail costs. The other is potentially legal exposure from a compliance perspective, which was an interesting finding from our recent global data quality survey.

Dobbie: Right, so in that survey, you quizzed a whole lot of business owners and did you get an idea of how much it’s costing business?  Were you able to put a figure on it?

Glasner: Yeah, it’s interesting because it tends to cost organisations different or it tends to appear to cost organisations different amounts depending upon industry. But if we took a broad sweep across the 2,078 organisations we surveyed globally, across the board about 19 percent of revenue or funding is wasted due to bad data. This is up from 6 percent when we last conducted the survey in 2005.

Dobbie: How does it work in relation to compliance then?  I mean are you liable legally if you’re holding inaccurate data?

Glasner: In certain industry sectors yes, absolutely. There are significant compliance requirements in things like telecommunications and banking and finance industries. And there are government regulations that specifically require organisations to comply to contact data quality specifications.  Interestingly enough, compliance is one of the areas that we’ve seen confidence in contact data decline over the last couple of years. So when we surveyed a similar size sample in 2005, 37 percent of the businesses we surveyed believed they were compliant from a legislative perspective. And that’s compared with just 27 percent of the businesses we surveyed in this recent study.

Dobbie: So why do you think that is?  Because people are more aware of the need to comply?  Or is data quality actually on the decrease?

Glasner: I personally believe it’s the former rather than latter. We’ve seen a significant uplift in the number of organisations that recognise poor contact data as an issue to their business. So that’s gone up specifically in Australia from 73 to 96 percent across those two surveys. However, we haven’t seen such an uplift in the number of organisations that actually have a documented strategy. So still, only a little over half of the organisations we surveyed actually have a formal strategy in past to manage contact data quality.

Dobbie: So is the problem with gathering the data or is it how it’s processed or is it just kept for too long without being checked?

Glasner: That’s two significant points that you made there. The first issue is one of data capture. We find that somewhere around 40-45 percent of organisations actually validate any of the information that comes into their door. There’s a lot of information being captured that at the point it’s going into the database is either inaccurate or incomplete. So that’s the number one problem.  The second issue comes to currency of data. And also the fact that many organisations are holding data across multiple databases, which leads to duplicate records which in its own term poses a whole range of business issues.

Dobbie:  That’s when you start getting four letters from the same organisations in your mailbox.

Glasner: Phil, I’m sure you’ve been as frustrated by that as I have in the past.

Dobbie: Now validating data, I mean it’s easier if it comes from one source, but of course like a call centre for example, but most businesses operate in a multichannel environment these days. So isn’t that where the problem starts? And is there really a solution to that? Where you might have a lot of data coming in from different sources. And that’s probably where a lot of your duplicate records start.

Glasner: Exactly right — and it’s why you need as an organisation to take a comprehensive approach to contact data management. So it’s an interesting point you make there because a lot of organisations now in contact centres are validating components of contact data. So things like address and post code are validated by about 61 percent of the organisations that we surveyed. But significantly fewer are validating any of the information that comes in across the internet. Now, part of that has been because historically it’s been a very hard channel to monitor or manage. And part of it comes down to perception and organisations believe that individuals will put the correct information in their database coming in through the website. But we’ve found during our studies and what we’ve been doing over the last 10 years here in Australia that even though people are putting their own name, address, date of birth, drivers licence number, etcetera into a website, they’re still making mistakes.  And largely it’s due to the information fields that they’re prompted to enter data into. And they’re often ambiguous. So there are a range of ways you can tackle that now and we have a suite of tools that validate address information coming in over the internet against trusted source.

Dobbie: And it’s important to validate down to the actual household isn’t it?  Because post codes are pretty large areas in Australia.

Glasner: They are very different to the UK where a post code represents maybe up to a maximum of sort of 16 houses or 16 properties. Here in Australia it can represent numerous suburbs and many tens of thousands of properties. Quite often the issues we uncover with businesses pertaining to address information is lacking things like apartment numbers or unit numbers or what we call sub premise information. So organisations are very good at getting post codes correct now and suburbs correct and in a lot of instances they’ll get the street name right or a small misspelling won’t have a huge impact. But if you’re missing an apartment number, it’s very difficult to get a targeted piece of mail to your customer.

Dobbie: Now you mentioned having a strategy to get yourself out of this problem.  I mean where would you start?

Glasner: The first place to start is to really get a good understanding of the scope and scale of the issue. So it’s important to take an audit of your data and get a real clear understanding of what your problems are.  So are your problems incomplete or inaccurate information? Are they duplicate records? Or is the issue broader than that still in that you have a lot of disparate systems across your organisations that don’t communicate effectively with each other? So that’s the first point of call. The second point of call is to take an organisation wide approach to this and really get buy in from the board level. Still only about half of the organisations we surveyed believe that data quality as a corporate issue resides with someone at the board level. And that’s a big problem if you don’t have board level approval and board level support.  It’s very difficult to implement an organisation wide solution. And I think you mentioned earlier Phil that there are many channels through which data and information is captured and brought into an organisation. And unless you have high level support it’s very difficult to bring all those business units together to provide a consolidated approach.

Dobbie: But if you want to get that buy in from the board, you’ve got to do a fair amount of ground work.  So there’s got to be an element of expense. I mean you’ve got to audit the data to try and find out how clean or unclean it is.

Glasner: Absolutely. Absolutely. There is an investment in time and an investment in resource in understanding this is an issue. And therein is one of the challenges. Ninety-six percent of the businesses we surveyed recognise that there’s an impact for full data contact on the bottom line. And as I said, only a little over half of them actually have a strategy in place. So there’s a lot of businesses out there who are sticking their head in the sand for want of a better expression, and really ignoring a problem that they know exists. And in challenging tough economic climate that we’re entering into at the moment, contact data is the life blood of your business. And it’s worth, I would suggest, a significant investment in understanding what your issues are and how you can go about resolving them.

Dobbie: And presumably, it’s becoming a more important issue as we move more into channels like the internet and more one-to-one marketing.

Glasner: Absolutely. With the internet, you will increase your level of control internally over the data that’s captured and you’re relying on your customers to provide you with accurate information. And marketing as you suggest has become more and more sophisticated.  But you know 90 percent of the businesses we surveyed still don’t think they’re using the database to its full potential. And the real question with that is why? And I believe the answer to that is that marketing divisions and marketing departments don’t trust the data that they’ve got.