In the age of digital transformation, businesses and organizations lean on the customer data they collect to make informed decisions and drive successful outcomes. However, this data has a serious flaw because, unlike fine wine, a company’s data does not improve with time.
A report from Data Axle indicates that customer phone data decays at approximately 18%. When you add in email and addresses, the decay rate is nearly 30% per year.
This phenomenon is known as data decay (Research World), and it has a hefty price tag (6sense) and far-reaching implications across various sectors, including health insurance, political campaigns, and lead generation. Fortunately, today’s contact centers can implement proactive strategies to address the challenge.
Understanding Data Decay and Its Implications
Contact centers are the backbone of any customer-oriented business. The consumer data they gather enables them to evaluate customer preferences, create strategies to enhance the customer experience (CX), and build stronger customer relationships.
Contact centers are the vital bridge between businesses and customers in many industries, and that bridge is built on a foundation of accurate data.
For example, when insurance companies have up-to-date data, they can provide their customers with quality service and ensure compliance with regulatory requirements. But data decay in this industry leads to incorrect coverage information, claims processing delays, and missed renewal opportunities.
When agents have inaccurate or incomplete information about customers, they cannot provide timely and satisfactory solutions to their inquiries or complaints, often resulting in prolonged wait times, multiple transfers, or unresolved issues.
It is not difficult, then, to imagine how inaccurate contact data contributes to poor CX and increased customer churn rates in the insurance industry and others like it.
When companies fail to reach their customers due to outdated information, those customers often become dissatisfied and choose to switch to competitors. This churn results in lost revenue and the cost of acquiring new customers.
In the realm of political campaigns, contact centers need accurate voter data to help candidates target the right demographics, tailor messages effectively, and mobilize supporters.
Data decay in these contact centers results in wasted resources, unreachable contacts, and ineffective outreach strategies. Political campaigns that fail to address data decay struggle to engage with their target audience, influence voter behavior, and achieve campaign goals.
When contact information becomes outdated in many contact centers, including those of political campaigns, agents waste valuable resources.
They spend time on failed attempts to contact customers when their efforts could have been allocated to addressing the needs of other customers or engaging in more profitable activities.
When agents have inaccurate or incomplete information about customers, they cannot provide timely and satisfactory solutions...
Additionally, contact centers involved in lead generation rely on accurate prospect data to identify potential customers, nurture relationships, build segmentation strategies, and drive conversions.
The contact centers forced to deal with inaccurate data face disconnections, wrong numbers, and nonexistent contacts: all of which hampers agents’ abilities to generate leads and close sales.
However, data decay can result in reputational damage in any industry. Contact centers rely on accurate and up-to-date data to provide personalized CXs.
When customers receive irrelevant communications or are repeatedly contacted using incorrect information, it negatively impacts the company’s reputation.
This creates a loss of trust that is challenging (if not impossible) for a business to rebuild, and which affects their financial bottom line.
Furthermore, regulatory compliance is a critical concern for contact centers. Outdated data may expose organizations to compliance risks, especially regarding data privacy and protection regulations. In certain scenarios, failure to comply can result in hefty fines and reputation damage.
Unveiling Data Degradation Causes
There are a variety of causes behind the challenge of data degradation in contact centers.
First, the accuracy of a company’s data depends on the proficiency of the people entering it into the database. Errors during the manual input of data - such as typos, spelling mistakes, inconsistent formats, or poor handwriting - can all lead to instant data degradation.
Second, a company cannot guarantee the quality and consistency of its data without implementing well-defined data governance.
Without strict guidelines and rules governing data creation, storage, and use, data becomes vulnerable to degradation. Data governance ensures the data a call center collects is consistent across all channels and conforms to the company’s best practices.
Third, data decay often occurs over time due to inadequate data storage and retrieval systems.
A robust data storage and retrieval system that accommodates a business’s scale plays a significant role in maintaining the integrity of that company’s data. The system should be optimized for easy retrieval and analysis and have reliable backups in place.
There are a variety of causes behind the challenge of data degradation in contact centers.
Despite a contact center’s best efforts, several factors inevitably contribute to data decay. Over time, customers inevitably change their phone numbers, email addresses, or physical addresses without businesses’ knowledge.
Customers’ marital status and preferences may also change, such as their preferred communication channels or specific product interests.
Strategies for Combating Data Decay
In essence, contact centers serve as a frontline defense against data decay. They are poised to help organizations across various industries maintain high-quality data, improve operational efficiency, and enhance CXs.
When contact centers prioritize data quality and invest in verification solutions, they empower businesses to stay ahead of the curve, drive better outcomes, and adapt to the evolving data landscape.
To effectively combat data decay - and ensure the integrity of their customer data -, contact centers must first establish clear data governance policies and procedures to define roles, responsibilities, and processes for data quality management.
A company’s governance policy should outline data collection, storage, and usage procedures. It is also critical to ensure that all stakeholders understand and adhere to the guidelines in the policy.
Next, contact centers must stay current with and utilize the latest automation tools and data management systems. Integrating these supports can enable companies to collect, validate, and update data in real time.
Technology advances allow contact centers to verify the accuracy of contact information as it’s collected, ensuring its validity from the point of entry. When integrated into a company’s CRM platform, these tools streamline processes and ensure accurate information is readily available.
Regular data cleansing processes also help contact centers ensure their databases are free from outdated or inaccurate information.
This strategy involves verifying and updating customer contact details at regular intervals by scrubbing data to identify and eliminate incorrect entries, duplicate information, and inactive contacts. Periodic audits go a long way toward identifying and rectifying inaccuracies in a contact center’s database.
When contact centers implement a robust consent and preference management system, they allow customers to update their own contact information and communication preferences.
Contact centers can begin this process by setting up automated update requests to prompt customers to confirm or update their contact details regularly and whenever they interact with customer service.
They can also establish feedback loops with customers through surveys or service calls to gather updated contact information and preferences. This engagement not only helps maintain accurate data but also enhances customer relationships.
Additionally, contact centers can monitor engagement metrics such as email open rates and response rates to calls.
Low engagement is often a tell-tale sign of data decay. But tracking engagement information during outreach efforts enables businesses to identify and investigate potential issues with contact data.
Finally, contact centers must take time to provide their agents with professional development regarding the importance of data accuracy and decay.
Ongoing education and staff training can address the need for improved data quality and compliance with data protection regulations. When done well, this training will support employees as they do their part to maintain their company’s data.
Combating data decay in the contact center environment is a critical aspect of modern data management. Data quality is not a one-time initiative but an ongoing commitment to continuous monitoring, evaluation, and improvement.
Data decay leads to inefficiencies, poor CXs, wasted resources, and compliance risks that require proactive strategies such as regular data cleansing, enrichment, employee education, customer consent, and preference management to resolve effectively and efficiently.
The battle against data decay is complex, demanding a strategic response from businesses. It not only poses challenges across various industries, but it also presents the silver lining of offering an opportunity for organizations to correct and even strengthen their data management practices.
By embracing clear data governance, advanced technology, and proactive data cleansing, along with fostering customer engagement for data accuracy, businesses can lessen the impacts of data decay. This approach not only improves operational efficiency and customer satisfaction but also helps to ensure compliance and protects the company’s reputation.
Ultimately, investing in effective data management practices will empower contact centers to thrive and deliver exceptional customer service at every touchpoint.