Customer Data Hygiene: Overcoming Marketing Roadblocks

Customer data hygiene might conjure up unpleasant images of sitting in a dental chair and getting your teeth scaled. But in fact, it’s a critical aspect of marketing performance.

In a data-driven world, companies are inundated with insights that can help them better connect to their core customers. However, data acquisition can be costly, especially for companies that are eager to reap the benefits of marketing as quickly as possible.

A recent Fundera study reported that 47% of small business owners handle marketing efforts on their own. With so many taking a DIY approach to their marketing efforts, it’s imperative that you focus on building a strategy that will yield a strong ROI, not wasted marketing spend.

Achieving a strong ROI all begins with customer data hygiene and intelligent data segmentation. Here are some best practices for small and scrappy businesses that want to take their marketing campaigns to the next level.

Data Hygiene Is 100% Mission Critical

Customer data hygiene is one of the most important pieces in your marketing puzzle, and it should not be overlooked. Many companies often downplay the importance of data hygiene simply because they don’t have the time or resources to parse through and amend it. Data hygiene is crucial for business growth, as you may end up spending more time and money in the long run if you avoid this process.

If you start to see a performance drop in your marketing program, this could be a sign that you’re working with dirty data. Here’s how you can be proactive with your customer data hygiene and avoid a lag in your campaign performance:

Set up a process for data governance: You may want to give someone within your organization this responsibility and hold them accountable for keeping the data as up to date as possible. Ensure that all parties involved are aligned on what needs to be done to keep the data accurate and how often this task should take place.

Set the baseline and understand state of data quality: Be sure to build confidence scores and use this as an opportunity to determine what you need to be sure about the data that you’re using. If you’re using emails as a delivery method, all email addresses should be deliverable and active. For home addresses, ensure that the consumer still resides in the address that you have on file and quickly update Return to Sender profiles when appropriate.

Develop a process for ongoing data quality improvement: Data hygiene is not as simple as just giving it to a vendor once a year for a mass cleanup. It needs to be thoughtful and strategic.

Remember, data in and of itself will never be 100% correct, and it goes deeper than having a valid email or home address. Without accurate names or even genders, you run the risk of creating a poor customer experience which has a much longer lasting impact on your revenue than the upfront investment.

Quality over Quantity with Data Segmentation

After you’ve taken the necessary steps to cleanse your data, the next priority is data segmentation. Particularly for businesses that invest in large lead lists, you may want to segment this data into smaller categories to ensure that your messaging aligns with the recipient.

Some best practices include segmenting active and inactive consumers. For example, an active segment will include those actively engaged with your brand. From there, you can narrow down even further based on identifiers such as demographic, behavior, income and ZIP code.

With so many identifiers that make each consumer unique, it’s possible to get in the weeds and have too many segments. It’s all about balance! Some signs that you may have too many segments can include:

  • You can’t confidentiality say “this is what my best customer looks like”
  • You log into your CRM or other systems and become overwhelmed with the number of segments
  • Your campaign isn’t performing at the intended rate

In marketing, sometimes less is more, and this axiom absolutely holds true when considering the number of segments to utilize when building your marketing campaign. Additionally, ​​data segmentation allows you to understand what has worked in the past and optimize it appropriately. By segmenting your customers and prospects, you can message better and optimize your specific channel strategy. If you do a spray-and-pray approach, you won’t learn anything in the end.

It’s also a good practice to experiment. Be sure to evaluate what segments worked well and which ones have less impact. These learnings will help you iterate on what you’ve done with previous campaigns and use those insights to improve your strategy moving forward.

Companies that make customer data hygiene and segmentation a top priority in 2023 will find success. Every company tries to demystify how to attract, acquire and retain business. Often, good data hygiene and intelligent marketing strategies are the best starting point for success.

Anthony Pauley is Chief Revenue Officer of Speedeon