As more marketers report concerns with the quality of their customer contact data, new European legislation threatens to increase the costs of poorly-managed data
A year after the European Union’s General Data Protection Regulation (GDPR) came into effect, nearly three in five UK marketers (58 per cent) surveyed by Royal Mail Data Services have concerns over the compliance of their in-house customer data, and a similar number are shying away from using third-party data because they don’t trust that it will comply with the EU’s new, tougher data-permissioning standards. Designed to harmonise and strengthen data protection laws across the continent, UK and multinational businesses now have less than 12 months to prepare their data for the tough new GDPR standards, which take effect in May 2018.
Along with compliance concerns, Royal Mail’s research reveals that UK organisations estimate poor-quality customer data is costing them an average of six per cent of their annual revenues. So how can marketers and data experts finally clean up their customer data to improve overall operational efficiency and campaign effectiveness and comply with data protection regulations?
Today’s marketers’ data dilemma
Nearly all marketers (91.4 per cent) say their organisations are plagued with data-quality issues that drive down campaign effectiveness and leave their businesses vulnerable to non-compliance with GDPR standards. The myth that resolving data quality is a one-time fix is partially to blame.
With such a dim view of the state of their data, it’s clear that in 2017 marketers must make big changes to improve data management and ensure their current customer data is compliant with new privacy and permissioning standards.
So what can organisations do to ensure their customer data is accurate, compliant, and properly permissioned ahead of this looming deadline?
Mapping data flows
Getting ready for the GDPR means better orchestrating the complex and growing number of sources that capture customer data in an organisation every day. Digital marketing (websites and mobile web), sales (retail and e-commerce) and direct customer contact (face-to-face or contact centres) provide organisations with new customer information daily. The responsibility for managing that data is often shared across multiple functions without consistent processes for data collection, validation and cleansing. While marketing leads data strategy and collection in most organisations, CRM functions, customer service, sales and e-commerce also play parts in managing incoming customer data. For some organisations, centralised data management operations or IT take on this role.
Mapping incoming data flows allows the organisation to see how its customer information is managed and cleansed at all touchpoints. This will give data and compliance experts the insight they need to break down siloed working and ensure all customer data is treated with the same scrutiny when it comes to accuracy and permissioning.
Seeking customer consent
Today, nearly half of all marketers (48 per cent) either have no plans to or do not know whether they will seek fresh permission from their customers. Businesses should have confidence that they will be able to gain the consent necessary to continue effective customer communication, but understand that repermissioning needs to start sooner rather than later.
While the GDPR brings changes to rules around consent, with the proper permissioning strategies and data management practices in place, business and marketing operations shouldn’t be too badly affected. First, it’s important to make the distinction between marketing to existing customers by using first-party data, and marketing to new prospects by using third-party data.
Marketing to existing customers under the GDPR is defined as being in the “legitimate interest” of the company and its customers. This means that in most cases and for most channels, businesses just need to provide current customers with a clear opportunity to object when their data is used or collected. A simple and well-worded “opt-out” message across all communications should suffice.
When it comes to marketing to new prospects by using third-party data, clear, affirmative consent must be gained before the company can engage in new communication to prospects. This can be difficult and ambiguous when dealing with bought-in contact and address data. Working in partnership with a trusted third-party data partner able to provide GDPR-compliant contact data is no longer a ‘nice-to-have’ – it’s a ‘must have’ if marketers are looking to increase new customer acquisition in a post-GDPR world.
However, customer data that was not captured with a process or privacy statement that complies with the GDPR doesn’t necessarily have to be discarded. Businesses in doubt can set up systems to automatically contact those individuals again to request appropriate consent, thereby repermissioning customer data for marketing purposes.
Once existing customer contacts are permissioned, and the business has established a formal system for cleansing and permissioning all incoming customers, the next step is to establish formal, continuous data-cleansing and enhancement processes to keep customer information accurate, up-to-date, permissioned and compliant over the long term. A third-party analysis can help companies identify any compliance concerns in their new practices, and establish the ongoing processes that will ensure compliant and permissioned customer contact data moving forward.
Toward more effective customer engagement
GDPR-compliant data is necessary to meet new regulatory standards, but forward-thinking businesses will see their new data-processing protocols as an opportunity to improve the overall effectiveness of their customer engagement strategies. Enhancing internally-collected customer data with GDPR-compliant, third-party data sources will allow marketers to reach new customers while ensuring their internal contact data is up-to-date as customer information changes.
Marketing mail, such as direct mail and door drops, is particularly good for reaching new customers under the GDPR, as door drops and unaddressed direct mail target postcodes rather than individuals. Traditional direct mail campaigns are a great way to cut straight through to prospective customers, and proven to drive online interaction. In fact, as a result of receiving direct mail, 92 per cent of people were driven to online activity, 87 per cent were influenced to make online purchases and 54 per cent engaged on social media.
Building effective customer engagement for the future
In today’s crowded media environment, marketers rely on good-quality contact data above all else to ensure their messages reach customers and prospects. Yet despite reporting data quality as having the biggest impact on campaign response and conversion rates, we know that too few businesses today have control over the quality, accuracy, and compliance of their customer information.
Improving data quality will take an organisation-wide approach that starts at the top. Looming GDPR deadlines give marketers a mandate to educate leaders on the true costs of their existing approach to data management and make the necessary investments to overcome persist data quality challenges.
To learn more, download Royal Mail Data Services’ full research findings here