All businesses rely on data.
Whether you’re a legal company selling services to growing brands or a SaaS business specializing in accounting software, the right data will help you beat the competition. That’s because gathering information about your industry, consumers, and market position helps you to make more intelligent decisions for your venture.
The only problem? Not all data is good.
If you’re collecting huge amounts of inaccurate, repetitive, or otherwise poor-quality data, then you’re wasting time and money on a business strategy that’s just not going to pay off. Here’s what you need to know about the risks and challenges of poor B2B data management.
1. Bad Data Leads to Poor Decisions
One of the main reasons companies use data today is that it helps them make informed choices about where to spend money.
A B2B brand can use their website analytics to determine whether their PPC marketing strategy is driving the right number of conversions when they bid for a certain keyword. By looking at the amount the company spent on that advertising strategy, and how much they earned back from customers, they can see whether the ROI makes sense.
Unfortunately, if the data is bad, then the same company might end up attributing purchases that have nothing to do with that PPC campaign to the keyword strategy. This might lead the company to spend money on a strategy that doesn’t generate any additional revenue.
Whether data is inaccurate, poorly sourced, or just inaccurate, the result is always the same: results that you can’t trust. When companies are using data to make vital decisions, accuracy is key. Better data management can reduce the risk of erroneous data, repeated numbers, and other mistakes.
2. Poor Data Management Causes Compliance Issues
Most of the industries that B2B companies work in today have some requirements for safe and compliant data management.
If you’re working with businesses in the EU, then you’ll need to ensure any information collected is compliant with the rules of GDPR. If you’re in the financial industry, you may have specific requirements to follow on the data you should collect for each transaction.
A good data management strategy helps you set up a suitable governance plan for your chosen industry. You can ensure that the data you store is maintained in data centers that align with the regulations of your niche and avoid any storage problems that might lead to problems with security and privacy.
Some data management solutions even come with tools that team leaders can use to notify team leaders instantly when there may be a compliance issue. This can be particularly useful in an environment where more teams are working remotely.
3. Bad Data Creates Inefficient Processes
To develop strategies for successful business operations, most companies look at historical data. They learn how certain supply chain strategies and policy guidelines can improve efficiency, productivity, and even employee safety in the manufacturing line.
Even the way you price your product and make profits heavily relies on data on your targeted buyer persona and their purchasing habits.
Unfortunately, without high-quality data, it’s hard to know which activities are helping your business to thrive and which are holding you back. The wrong readings recorded in an automated system and passed onto a team member could lead to dangerous actions on behalf of someone working with large pieces of machinery.
Alternatively, you could end up advising your staff members to follow a specific procedure and notice that your productivity levels suddenly plummet instead of rising.
A good data management plan gives business leaders and supervisors a complete overview of all the steps involved in taking a B2B product from the initial idea all the way through to purchase and customer success management. Only with this accurate end-to-end view of the production lifecycle can companies begin making changes to optimize their processes.
4. Poor Data Causes Missed Opportunities
In the past, sales representatives had to use their gut instinct to determine which clients they should chase with which deals and upselling efforts. Unfortunately, that often meant wasting a lot of time on leads that were never going to convert.
Today, we don’t have to waste time or money on guesswork thanks to solutions such as CRMs that enable sales representatives to stay on top of all customer interactions.
With the correct data management strategy, you can score your leads from the first moment they interact with your business, using previous historical data to determine which clients are most likely to convert.
Provided that you and your team keep customer data up to scratch, it’s easy to use data sets from previous customers to predict the actions of future leads.
The result is less time wasted on opportunities that aren’t going to pay off, and more focus is given to the people who show a genuine interest in your business.
5. Bad Data Harms Business Reputation
Today, everyone knows that you need to base your choices on good data if you want to make good business decisions. If you use the information you have to better understand your customers, your competitors, and what you need to do to delight leads, you’ll end up with a better reputation.
Predicting and understanding the needs of your consumers makes you instantly more appealing.
Unfortunately, this also means that if you use the wrong data, you could harm your reputation too. Making decisions based on flawed data sets tells your audience that either you don’t utterly understand them or that you can’t solve their problems.
Inaccurate data could push you to spend all your money on one method of customer service while your consumers are telling you they want something entirely different. This misalignment could be what sends your most valuable potential leads to your competitors instead.
Don’t Risk Data Quality
Data might be the most valuable asset a company can have – but it’s only really beneficial when you know that your information is accurate. Having the right strategy for collecting, managing, and leveraging your data ensures that you can make informed and intelligent decisions every time you look for new ways to serve your customers or build your brand. Don’t underestimate the power of high-quality data.
Joe Peters is a Baltimore-based freelance writer and an ultimate techie. When he is not working his magic as a marketing consultant, this incurable tech junkie devours the news on the latest gadgets and binge-watches his favorite TV shows. Follow him on @bmorepeters