Organizations rely on data for various reasons, but only a small percentage of them actively address data quality. Whether it’s ensuring the accuracy of invoices or the integrity of customer addresses, ensuring effective and reliable data use can boost a brand’s intrinsic value. Therefore, all business enterprises must assign importance to data quality.
All data sources potentially include errors and missing values – data cleaning addresses these anomalies. Not cleaning data can lead to a range of problems, including linking errors, model misspecification, errors in parameter estimation, and incorrect analysis leading users to draw false conclusions.
Data cleansing is the process of spotting and correcting inaccurate data. Improving data quality can eliminate expensive processing errors, manual troubleshooting, and incorrect invoices. Business enterprises can achieve a wide range of benefits by cleansing data and managing quality, which can lower operational costs and maximize profits. This post will explore the top 5 benefits of data cleaning.
1. Improve Decision-Making Processes
Data is the foundation for effective decision-making in a business. Data in an average business-to-business (B2B) organization doubles every 12-18 months, according to Sirius Decisions, and even if the data is initially clean, errors can creep in at any time. Data quality decay is a constant in nearly all businesses where data quality is not managed. Duplicates may be created as new records are added. Things outside your organization, such as customers moving and changing email addresses and phone numbers, will degrade data quality.
Despite this, most businesses fail to prioritize data quality management or even recognize that they have a problem! Many of them didn’t even track when their customer’s data was last subjected to quality control. They frequently discard or ignore data they believe is of poor quality and make decisions using other methods. Data quality is a significant stumbling block to digital transformation and business intelligence, let alone every company’s desire to become more data-driven.
Decision-making requires accurate information and high-quality data. Clean data can help with analytics and business intelligence, allowing for better decision-making and execution. Accurate data can aid business enterprises in making better decisions that will contribute to their long-term success.
2. Improve the Efficiency of Customer Acquisition Activities
Cleaning data regularly can help businesses significantly improve their customer acquisition and retention efforts. Due to its high throughput, filtering, cleansing, and enriching accurate data are critical to the prospecting and lead process’ effectiveness. By following data quality routines regularly, businesses can ensure that their data is clean, up-to-date, and accurate throughout the marketing process. Because encountering outdated addresses or missed deliveries is very low, clean data can also ensure the highest returns on email or postal campaigns. Multi-channel user data can also be managed seamlessly, giving the company the ability to run successful marketing campaigns in the future because they’ll know how to reach out to their target audience effectively.
3. Streamline Business Practices
Getting rid of duplicate and erroneous data can help businesses streamline their operations and avoid wasting money. Data cleansing can also aid in determining whether specific job descriptions within the company can be changed or if those positions can be relocated. The market performance of a product or service can be easily assessed if reliable and accurate sales data is available.
Data cleansing and the right analytics can also assist a company in identifying a market opportunity for new products or services at the right time. It can highlight a variety of marketing options that businesses can pursue. Decisions are made daily in almost any other business process, some big, some small. Individual contributors benefit from the systematic push of high-quality information down the chain of command into their hands, which helps them improve decisions made at all levels of the organization. It’s known as Operational Intelligence, and it’s mostly used for quick lookups and to inform the thousands of decisions made every day within the company.
4. Increase Productivity
A well-maintained enterprise dataset can assist businesses in ensuring that employees are making the most of their time and resources. It can also help enterprise staff avoid contacting customers with outdated information or creating invalid vendor files in the system by allowing them to work with clean records, increasing their efficiency and productivity. When payments or refunds are initiated, high-quality data helps to reduce the risk of fraud by ensuring that the staff has access to an accurate vendor or customer data.
5. Increase Revenue
Businesses that work to improve the consistency and accuracy of their data can see a significant increase in response rates, which leads to increased revenue. Clean data can significantly reduce the number of returned mails for businesses. Suppose the company has any time-sensitive information or promotions that they want to directly communicate with their customers. In that case, accurate information can assist them in doing so in a convenient and timely manner. Another aspect of data cleansing that can be effectively eliminated is duplicate data. The financial impact of duplicate data, according to Sirius Decisions, is directly proportional to the time it remains in the database.
Duplicate data can deplete an organization’s resources by requiring them to spend twice as much on a single customer. If a customer receives multiple emails, for example, they may become irritated and lose interest in the company’s products and services.