Impact of Dirty Data


The Impact of Dirty Data

campaign performance

Your customer database is your most important business asset. You adopted your CRM system with the intention of becoming more efficient, making smarter decisions, receiving better analytics and increasing campaign performance. But the return on your investment depends on the veracity of your data.

The Problem

Consider that while 67% of businesses use their CRM data to target customers, and 33% have more than 100,000 records in their databases, 94% of businesses believe their customer database is inaccurate. At the same time, the size of customer databases doubles every 12-18 months.

Here are some other sobering statistics:


  • 60% of companies are using systems with unreliable data.

  • 62% of companies rely on marketing and prospect data that’s up to 40% inaccurate. 

  • 40% of all leads contain bad data.

  • 37% of email addresses change annually.

  • 43% of customers’ phone numbers change every year.

  • Up to 20% of all mailing addresses change annually.

  • 80% of organizations report their phone contact records are “risky.” 

  • 15% of leads contain duplicate data.

  • 10% of leads contain invalid information.

  • 8% of leads contain missing information.

  • 7% of leads contain invalid email and physical addresses.

Additionally, 30% of companies reported having no strategy to update incomplete or inaccurate records, and at least 33% allow this bad data to remain in their databases, leaving their sales teams with the task of continually updating records.

The Sources of Dirty Data

Experian estimates that more than 60% of dirty data results from human error, while 35% of inaccurate data comes from poor communication between departments. An insufficient data strategy also accounts for 28% of inaccurate data.

When multiple departments enter data, it introduces errors into the system. Records can be duplicated with different spellings of names and addresses. Making matters worse is the fact that dirty data can remain undiscovered for years, making it even more problematic to deal with. The sad fact is that 57% of businesses became aware of dirty data when it was reported by customers or prospects. This isn’t a good way to learn about these issues.

Many companies end up searching for and correcting dirty data manually. Unfortunately, this strategy tends to backfire, as different departments are responsible for their own data errors. In an attempt to rectify the situation, the same lack of centralization that created the inconsistencies introduces even more problems.

The Costs of Poor Data Quality

The data in your CRM system impacts every area of your dealership’s business, including sales, marketing, lead generation and customer relationships. It’s estimated that dirty data costs the average business 15% to 25% of revenue. According to IBM, bad data costs American businesses approximately $3 trillion each year.

Recent estimates suggest that as much as 32% of CRM data is inaccurate. If your dealership has 100,000 customer records in its CRM system, this means there are 32,000 inaccurate records in your database. If we apply the 1-10-100 rule, which states that it costs $100 per record if you choose to do nothing about bad data, the total cost to your dealership will be $3.2 million.

The Hidden Costs of Poor Data Quality

While it’s possible to determine some of the cost and loss of productivity caused by poor data quality, there are hidden costs that are more difficult to quantify. You may not see these hidden costs in your bottom line, but you may feel the impact in other ways. An annoyed customer or potential customer may take his business to another dealership. Your staff may become frustrated and find working with the database to be tiresome. This can lead to lower conversion rates and staff churn.

The Advantages of Cleaning Your Data

If your dealership makes maintaining accurate data a priority, you’ll see innumerable benefits. When you combine an effective technology solution with adjustments to your strategic process, it will allow you to view more meaningful data, which will enable the dealership to make better decisions relating to effective data management, storage and utilization. Accurate data for your customers and prospects will allow you to make better decisions.

Failure to clean data comes at a price. The cost of duplicate, missing and incorrect data increases over time as you add more customer records to your CRM database.

Next Steps

Unfortunately, ensuring that your dealership’s data is clean isn’t something you can fix once and forget. Like your business itself, your data must be managed on an ongoing basis to ensure it doesn’t create waste that will impact your dealership’s core functions and affect your bottom line.

Follow The 1-10-100 Rule