Understanding Data Enrichment and Managing It Effectively
Data is growing increasingly important for the world, and today’s businesses rely on data to formulate marketing, sales and customer service strategies. Companies all around the world leverage new and advanced techniques to make use of data that is available to them.
Why do they use data? Here’s a fact to prove the sudden trend in businesses using data: by using and managing big data, the healthcare industry alone can cut down its costs by up to $300 billion annually. Think about global savings when all businesses integrate big data.
To Use Data, You Need Neat Data
It is imperative to know here that no one can use randomly selected data to do its best without being sorted, filtered and classified into logically developed compartments. In short, you need to have a data strategy to make use of the data you have.
You need to have easy-to-understand and actionable data to obtain any benefit from it. Did you know that by 2020 organizations might have to pay a toll of nearly $3.3 billion because of obsolete and redundant data? It is not to say that data is not benefiting businesses intrinsically, but unless you assort and arrange your data in a neat form, it will be a hindrance instead of an asset.
Introducing Data Enrichment
Data enrichment is what ensures that you are able to benefit from the data you have at hand. Data enrichment is a set of processes that an organization applies to make its data transform into intelligence. Organizations need to continuously clear, trim, filter and classify data to formulate strategy and facilitate growth.
Your data enrichment techniques add more value to your data. In most cases, data enrichment is synonymous with refinement of the data available to you. However, sometimes it might also involve importing of external data and blending it with the existing data to make the most of it.
Data enrichment, at its basic level, could be as simple as correcting the mistakes in the data before loading it into your database. For example, an organization looking to move to a new CRM solution might use a tool to correct the typos in its database content before moving it to the new platform.
Benefits of Data Enrichment
- Cost Savings
A detailed report from Global Databerg shows that a medium sized business with a database consisting of up to one petabyte of information would end up spending around $650,000 every year on data that’s not critical to it. Therefore, the first critical benefit of data enrichment is you saving money on saving information that your business does not need. This frees up resources that can be invested in mission-critical data to expand and grow your business.
- An Unprecedented Customer Insight
Customer insight is essential for the success of any marketing strategy. Today’s marketing strategies are more than slathering attractive posters on the roadsides or running attractive TV commercials. Today’s strategy is digital and customers demand personalization when businesses approach them.
The author of a perennial classic Duct Tape Marketing, John Jantsch, says that a company that only personalizes its marketing to the point of calling the customers with their name does not fully understand the importance of personalization in marketing.
Whether you are creating banner ads, a social media promotion or an email marketing campaign, you must know your customers a lot more than just their names. Take the example of how Experian approaches consumer data enrichment.
The tools they design for data enrichment allow companies to add, correct, and refresh their customers’ names, ages, ethnicities, interests, shopping habits, lifestyles, triggering events, etc. Once you have these details, you can design a marketing campaign with a full-on impact on every potential lead that receives your message. However, the success of your campaigns rests on your data enrichment strategies.
If your customer data is incorrect or incomplete, full of errors and unreliable, you could infuriate your customers rather than convince them to do business with you.
- Removal of Redundant Data
Many business owners can confuse data backup with redundant data. Backups are good but redundant data is bad. It is duplicate data that appears in your database over and over. It might seem harmless but redundancy of data causes confusion and inefficiencies.
An Experian Data Quality research shows that redundant data could be secretly costing a company up to 12% of the revenue that it loses. Moreover, it can also damage the reputation of 21% businesses. You can get rid of redundant data with the use of data enrichment tools. You must realize that it is not just your money that’s going to waste by storing duplicate data, you will also lose customers. Data redundancy will cost businesses a huge $3.3 trillion within the next two years. Experts agree that a repeating problem with most mid-sized organizations is that they don’t know which data to save and which to let go. They get into the habit of data-hoarding and end up spending their resources on data that will never bring them any value and revenue.
- Better Cross and Up-selling Opportunities
The benefits of data enrichment are not limited to attracting prospective customers and hot leads only. In fact, organizations can benefit hugely from their existing customers if they have the right data at hand. Data enrichment allows you to segment your customers into a variety of categories that lead you into creating personalized marketing and sales strategies.
When you know your customers inside-out, you can expand by introducing cross-sell and up-sell offerings. You can reap the benefits of up-selling and cross-selling when your customers are loyal to your business. The success of your sales strategy will show you how good your connection is with your customers.
Steps for Implementing Data Enrichment
- Hiring a Chief Data Officer
You could talk about a hundred different things that can help you implement and benefit from data enrichment, but there is nothing more important than having the right person on board focused on managing it all.
A Chief Data Officer acts as the center figure for all your data-centric strategies, operations and campaigns. This is the person who lays down the foundation of a system from which your organization can benefit in years to come. You know that data is flowing into your servers at all times, and so you need a strategic approach to collecting, enriching, and analyzing it across the organization.
While the cost of hiring a CDO can be high, the on-demand chief data officer from Cruz Street Digital is a perfect solution for all small and medium sized organizations looking to leverage data as an asset that will drive growth.
- Creating the Right Data Enrichment Strategy
The utmost requirement for implementing the right data enrichment strategy is to pick the proper tools. It is vital for you to know that every business benefits from data enrichment in a different way. The tools you at your organization may be completely different from those that some other organization uses.
That’s because different businesses have different motives behind enrichment of their data. While you might be trying to get rid of the typo errors in your database, some other organization might be working on getting rid of redundancy. Make sure your records meet the completeness, consistency, accuracy and integrity protocols. Anything that doesn’t meet the standards should be kept out of the system of record until criteria is met.
- Ensuring the Security of the Data
When planning an enterprise data framework in 2018, data security must also be a priority. Some big changes for organizations that handle sensitive customer data are coming in 2018 in the shape of regulation, including GDPR.
The Cybercrime Report released in 2017 estimates internet crimes to result in loss of $6 trillion every year within the next three years. Cyber security experts have all agreed that 2018 will be the year when protection of data for companies will be among the top concerns for organizations all around the world. All your data enrichment endeavors could end up in smoke if you don’t have the right security system in place for your data.
Five Leaders in B2B and B2C Data Management/Enrichment Services
Whether you are looking for a B2C or B2B data management services, you now have several options to choose from. Make your selection process thorough and well-informed because implementing a poor solution will result in undesired business losses.
B2C Data Sources
B2B Data Sources
Data Cleansing and Hygiene Sources
When you have these many options available to pick from, the selection can be challenging and time-consuming. A better route for you and any business to take is to hire the right professional who understands data, data companies and the methods to implement their solutions effectively e.g. Cruz Street Digital.
Once you have the right talent on your side, a Chief Data Officer for example, you can be rest assured that he/she will take care of vendor selection and proper implementation from start to finish, devising a successful data-driven strategy for your business.
Today’s digital landscape makes the role of a Chief Data Officer more crucial than ever. A fortified system in which data is safe, complete, and insightful is the foundation of a successful data enrichment strategy. Small and medium business have historically been less concerned with data strategy compared with large enterprises due to lack of resources like time and budget, the best path forward is to prioritize resetting your data strategy and look to experts in the space to make your vision a reality.