With GDPR one month away, Jim Conning, managing director of Royal Mail Data Services, looks at the challenges marketers face when it comes to data.

In many ways marketers should be entering a golden age. New channels, such as mobile, are providing them with much more data on customers and prospects, while offering the opportunity to deliver personalised, engaging experiences that drive greater loyalty. However, managing this data brings its own issues, as a new study, The Use and Management of Customer Data, from Royal Mail Data Services (RMDS) demonstrates. Our research with UK brands and agencies uncovered three key challenges for marketers:

Complying with the GDPR
Due to its imminent implementation date, one month from today, and wide-ranging impact, the General Data Protection Regulation (GDPR) was unsurprisingly the number-one concern for marketers – 29 per cent of respondents listed GDPR compliance as their biggest worry, up from just 12 per cent in the 2016 study.

Breaking down the responses, over one-third of agencies (35 per cent) cited it as their biggest challenge, compared to one-quarter (25 per cent) of brands. This implies that agencies handle a wide range of data about consumers acquired from third parties, which can be much more difficult to check for relevant permissions, or that they potentially have better awareness of the implications of the GDPR.

The study highlighted a mixed picture of how ready marketers actually were for GDPR. The positive news is that 78 per cent of all respondents were either “very” or “reasonably” confident that their internally-held customer data complied with the new regulation, although worryingly, 11 per cent were not confident, including 2 per cent who didn’t know if they were compliant or not!

However, when it comes to third-party data, the levels of confidence drop dramatically. Just 43 per cent of respondents were very or reasonably confident when it came to compliance, which demonstrates the difficulty of gathering evidence that the right permissions are in place when data has come from other sources. Only 9 per cent of brands said they were very confident in their data compliance, which shows that there is plenty of work to do ahead of the 25 May GDPR implementation date.

Using customer data effectively
When asked what was holding back their use of marketing data, 24 per cent of respondents pointed to analysing customer data as their biggest issue, a figure that rose to 28 per cent for brands. This demonstrates a clear need for greater analytical skills and capabilities, particularly for brands.

Perhaps reflecting the fact that they already had analytics skills, the biggest area for improvement that agencies flagged (29 per cent) was access to better-quality customer data. Brands also struggled to embed data cultures within their businesses. More than one in five (21 per cent) said that better understanding across the organisation of the importance of good-quality customer data would improve performance.

When it comes to driving successful campaigns in terms of response and conversion rates, marketers agree it is all about data and how you use it. On a scale of one to five, the four top success factors reported were quality of contact data (4.6), segmentation and targeting (4.6), personalised content (4.4) and timing (4.3). In comparison, creative design scored just 4 out of 5. These top-four factors all rely on good-quality data and analytics in some way, and marketers reported that they had all increased in importance dramatically since 2016.

Ensuring good-quality data
18 per cent of marketers said that poor-quality customer data was their biggest challenge. The main drivers of poor-quality data were basic errors – specifically out-of-date information and incomplete data. This was above factors such as duplicate data, spelling mistakes and data in incorrect fields.

Marketers understand that data is a living entity and quickly becomes out of date. This is leading to their focusing on more formal, regular data cleansing – 22 per cent said they did this daily or continuously. However, 33 per cent still had no formal processes in place to clean customer contact data, although this had dropped from 37 per cent in 2016. This means a sizeable minority are putting themselves at risk of data-quality issues – and potential GDPR investigations over non-compliance.

There is a direct link between data quality and the bottom line – marketers estimated that the average cost of poor-quality customer data was 6 per cent of annual revenue. For major brands this is measured in millions of pounds – and potentially excludes fines for GDPR non-compliance, which can be as much as 4 per cent of global turnover.

Marketers face increasing pressures to use their customer data wisely if they are to be effective. As the Royal Mail Data Services research shows, this means overcoming key challenges around the GDPR, data quality and analytics if they are to successfully engage with customers, ensure compliance and drive greater revenues.

You can the report in full here: https://www.royalmail.com/corporate/marketing-data/trends-innovation/industry-research/research-report-use-management-customer-data