AUTHOR: David Brady, CEO of Vuture
Maintaining accurate marketing data may be the last thing on your to-do list, but it’s a practice these days that no firm can afford to ignore. Not only can bad data management lead to poor compliance standing and the financial penalties that come with it, but it could also cost your business hundreds of thousands in missed revenue. And the worst part is, you may not even be aware the problem exists until it’s too late.
The focus on data over the last decade has affected all businesses and is sometimes linked to the growth of complexity in an organisation generally. According to research by the Harvard business review, organisations set themselves six times as many performance requirements as they did in 1955. They go further to suggest that in the 20% of organisations that are most complicated, managers spend 40% of their time writing reports and 30%-60% of it coordinating and attending meetings. Many of these activities are driven by and indeed create more data in what can become a perpetual cycle.
How well a firm can utilise its marketing data assets to get more growth is a distinct sign of operational efficiency. When we consider that the probability of generating revenue from an existing client is 60%-70%, and from a prospective client is 5-20%, it is easy to understand how valuable even the most basic client data can be in driving returns. But how many firms have an accurate assessment of the value of the data they hold or know how to leverage it in the most effective way?
The problem is that many firms are beset by a perfect storm of too much data and not enough know-how or resources to deal with it. Client data, in the meantime, degrades rather quickly over time leading to more problems and less results.
At the 2020 Lawyer Marketing Leadership Summit, attendees were polled on the significance of data problems in their firm and asked to rank their experience with 1 being a low grade problem and 5 being high. Those scoring in the range 3-5 represented 91% of respondents whilst those scoring 4-5 making up 49% of respondents. This is a good example of how significant a problem it can be for many professional services firms.
The real destroyer of your marketing efforts:
If you want to identify the real destroyer of your data management efforts, you need only ask yourself one simple question about the data: Are you actually going to do anything with it?
If you do not have an actionable reason for collecting data, then you’re probably wasting your time, energy and resources, and as a result, hurting your marketing efforts. Data is not always a magic pill that can fill marketing reports with wondrous numbers and amazing insights. Sometimes, it is actually the opposite, and can work against your success. If you don’t start with an outcome, then the chances are you will be collecting the wrong data, too much data ,or simply relying on data which may have devalued due to lack of attention over time.
Clients are not static.
Why is this a problem?
Clients that receive inaccurate or irrelevant marketing communications will either unsubscribe or stop paying attention, or, worse, will find it annoying, meaning they will begin to find your firm annoying, too. Worse still, you are simply throwing away your budget, as well as losing possible opportunities. This is a hidden cost of poor data management that can be difficult to calculate.
Data can be boring, but success never is. The right data can drive success but the wrong data in the wrong hands can lead to disaster. Take some action now, even if just a single step and be alive to the consequences of the bad data management that may be secretly ruining your marketing efforts.