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U.S. Business Losing Revenue Through Poorly Managed Customer Data29 March 2006
Organizations around the world estimate that they lose six percent of annual revenue due to poor management of customer data, according to a survey into global data quality published today by QAS, a division of Experian's Marketing Services Business. In comparison, businesses in the United States admit to losing 7.3 percent of revenue.
"Now, for the first time, we can assign a number to ineffective, siloed data quality initiatives in American corporations," said Mark Parise, president, Experian Marketing Services. "A 7.3 percent loss is a figure that forward-thinking business leaders can use to influence their companies to take action to solve this pervasive problem."
Globally, 75 percent of commercial businesses believe that they are losing money through missed business opportunities because they are unable to quickly and effectively profile customer and prospect data due to data quality issues. In the United States, this figure is above average, with 77 percent of companies admitting that shortcomings in data quality are having detrimental effects on their bottom lines.
In the public sector, 60 percent of organizations worldwide believe that inaccurate data costs them money in terms of wasted resources and lost productivity. One in ten of these organizations believe that more than five percent of their annual budget is wasted in this way. The main problem stems from duplicated data and incorrectly addressed mail.
The financial effect of poor data management is examined in the second phase of an international research project conducted by Dynamic Markets on behalf of QAS. First stage findings issued in July 2005 revealed an endemic lack of best practice when managing customer data. Today's findings examine the impact this has on revenue and profitability within organizations across the U.S., UK, Europe and Asia-Pacific; and in industries including financial services, retail, telecom, utilities, leisure and the public sector [Table 1 below].
Table 1: Global view of the financial impact of inaccurate data
Sector Potential revenue lost Potential revenue lost
through wasted resource through missed business
and lost productivity opportunities
% Yes % Yes
Financial services 73% 71%
Leisure, tourism, travel 56% 65%
Retail 75% 80%
Telecom 79% 75%
Utilities 76% 85%
Public sector 66% -
"The effect poorly managed data has on global organizations goes beyond the financial repercussions created by missing business opportunities," said Joel Curry, vice president of business development, QAS. "Poor data quality affects how consumers perceive an organization's brand, and makes compliance with government regulations more difficult. Businesses must nurture a data integrity culture from the ground up so that each individual recognizes the value of customer data and the importance in maintaining its integrity."
QAS provides a suite of industry-leading data hygiene products that not only cleanse existing data, but also provide real-time verification of new customer data, including name, address, and other details, whether data is provided via phone, over the Internet, or at point-of-sale.
"Accurate data exists," added Parise. "Now there is simply no excuse for companies not to take the simple step of checking their own data against official records, especially when you consider what is at stake."
Plans to invest in data integrity:
QAS' research highlights that the outlook over the next 12 months for investment in improved data management is positive. Compared to their commercial relatives (average 60 percent), organizations in the public sector are less investment minded (25 percent) [See Table 2]. QAS suggests that this is due to the fact that the majority of public sector organizations have well established and dedicated database management resources and that the primary focus in this sector is on the citizen experience rather than financial profit.
Table 2: Organizations worldwide plan to invest versus percentage with
data champions
Sector Planning to invest in Dedicated database
better data management? manager
Financial services 59% 35%
Leisure, tourism, travel 61% 42%
Retail 60% 33%
Telecom 64% 39%
Public sector 25% 62%
Utilities 59% 26%
"The research shows that, on a global scale, more than 50 percent of organizations are planning to invest in better data management practices in the next 12 months," Curry added. "For profitable companies, three quarters plan to invest, while over a third of those breaking even or making a loss also plan to invest. This shows the firm commitment to improving standards in data integrity across organizations worldwide."
A new white paper, entitled "The impact poor data management has on your organization" is available from http://www.qas.com/impact .
About the research
The research was conducted in June 2005 to establish the levels of accurate customer data held within organizations and how important this data is perceived to be. Dynamic Markets was commissioned by QAS to speak to 550 respondents in large public and private organizations across 10 countries around the world.
Countries represented by the sample include Australia, Belgium, France, Germany, Luxembourg, the Netherlands, Singapore, Spain, UK and the U.S. Sectors represented by the sample include banking, insurance, finance, retail, telecom, utilities, leisure, tourism, travel and the public sector.
This press release can be found on http://press.experian.com .
About QAS
With more than 9,000 customers, QAS is a leading supplier of address management solutions. Our QuickAddress suite of software helps organizations capture accurate address data and conserve integrity over time. The flexibility of QuickAddress means it can be tailored to suit any industry- specific requirements and business processes.
QuickAddress brings tangible business benefits to organizations by enhancing and maintaining their most important asset -- their databases. Any company that holds data on customers, suppliers, employees or distribution networks will benefit from the efficiency gains and cost savings achieved with QuickAddress.
Based on data secured from national postal authorities such as the U.S. Postal Service(R), QuickAddress captures, cleans and maintains name and address records.
Award-winning solutions from QAS are a result of a 14-year investment in technology development to ensure QuickAddress delivers the highest level of functionality and service support. QuickAddress supports more than 9,000 customers worldwide across all industry sectors. QAS is a wholly owned subsidiary of Experian(R), the global information solutions company. Visit us on the web at: http://www.qas.com .
About Experian(R)
Experian is the global leader in providing value-added information solutions to organizations and consumers. It has an unrivaled understanding of individuals, markets and economies around the world.
Experian provides information, analytics, decision-making solutions and processing services. It assists organizations in understanding their markets and customers and helps them find, develop and manage profitable customer relationships to make their businesses more profitable.
Experian promotes greater financial health and opportunity among consumers by enabling them to understand, manage and protect their personal information, helping them control financial aspects of key life events and make the most advantageous financial decisions.
Experian works with more than 50,000 clients across diverse industries, including financial services, telecommunications, health care, insurance, retail and catalog, automotive, manufacturing, leisure, utilities, e-commerce, property and government. A subsidiary of GUS plc with headquarters in Nottingham, UK, and Costa Mesa, Calif., Experian employs 12,000 people in 31 countries who support clients in more than 60 countries. Annual sales exceed $2.5 billion.
For more information, visit the company's Web site at http://www.experian.com .
The word "Experian" is a registered trademark in the EU and other countries and is owned by Experian Ltd. and/or its associated companies.
Source: prnewswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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