Customer Engagement starts with clean data

Scott Logie, Chair of the DMA’s Customer Engagement Committee, and Customer Engagement Director, REaD Group, discusses why SMEs must start prioritising clean data in order to improve their customer engagement.

Here at REaD Group – as a provider of data cleaning services to businesses across multiple sectors and from the very small to the very large – we are always keen to find out what the needs of our clients are. As such we conducted a survey into small- to medium-sized businesses (SMEs) to look at what they knew about GDPR, how they hold and manage their customer data and what they do to keep it clean and up to date. Our feeling was that lots of work is done to support bigger businesses, but that SMEs are often forgotten.

How clean is your data?

Our survey covered 1,110 SMEs and was conducted in June this year. The good news is that 85 percent of SMEs in the UK are familiar with the General Data Protection Regulation (GDPR). Some credit has to go the DMA here for pushing promotion of GDPR prior to May 2018 and also subsequently. However, more than half of the SMEs we surveyed are still not cleaning their data and therefore not adhering to the GDPR’s legal requirements.

We find this is a common issue: many businesses still see data cleaning as being directly related to contacting customers and, as such, only clean names and addresses if and when they want to send something out. The GDPR law is very clear – if you hold customer data, you must make an attempt to keep it up to date.

Data storage and management

It also revealed that only 40 percent hold their customer and prospect data in a CRM or other database: a surprisingly low figure given that businesses need to maintain contact with their customers for sales and marketing purposes, and never more so than over the past 15 months. As Chair of the DMA’s Customer Engagement Committee, I am obviously keen to ensure that the link between good quality data and building long term relationships is clear.

Irrespective of the format it is held in, centralising the customer data a company holds into a CRM or database is important, because it makes the storage, management and upkeep so much easier and, as a result, any marketing processes so much more efficient and effective too. Customer engagement – which we see as a combination of data, creativity and tech – relies on the ability to interrogate, analyse and select data to contact customers and build ongoing relationships.

Over the last 18 months, as face-to-face engagement has declined, this has become ever more important. We have seen many companies come to realise that they don’t hold their customer data in a manageable way, that they need to keep it up to date and then that they need to use it to communicate with their customers and prospects. The companies that have done well during this period have created relationships with consumers, as well as making it easy for those customers to buy from them.

Our local gym owner, for example, kept in regular contact via email and social, ran online classes and one-to-ones and now has a good set of customers to bring back into the gym. He only keeps his data in Excel but he manages it well.

A greater need to keep data clean

Our survey showed that 25 percent of those with a CRM do not run data cleaning or update processes: this rose to 61 percent of SMEs overall. As mentioned above, the GDPR requires all customer data to be clean and up to date in order to be compliant and legal.

Of those with a CRM or database, only six percent were not familiar with GDPR, meaning that the majority of those who hold customer or prospect data are familiar with the regulations governing storage of that data. Eighty percent of all respondents were aware that GDPR requires data to be kept clean and accurate or be deleted: although this still leaves one-fifth of SMEs who were not.

Direct mail still has a role to play

Direct mail remains a popular form of marketing with 42 percent of all respondents confirming they use physical mailing for communicating with and/or marketing to their customers. Sixty percent of SMEs with a CRM carry out physical mailings, while 30 percent of those without a CRM also carry out physical mailings: it is likely that these communications are not well targeted.

We have seen both an increase in mailing and an increase in response rate from mailings during the pandemic. This shouldn’t be just larger companies that benefit so it is great to see this being embraced by SMEs as well.

Customer engagement is vital

No matter what size the business, customer engagement is vital. If you don’t have a plan to keep relationships with customers going then there could be problems further down the line – like when a crisis hits! Customer engagement rests on good quality data and keeping it clean and updated. Not only that, but it is also a legal requirement. It seems that most SMEs are aware of this but aren’t necessarily acting on it.