What is data hygiene and why is it important?

Just like your house, customer data gets outdated, redundant, and disorganized over time if left to its own devices. While no one will sue you if your house is dirty or overflowing with outdated appliances, the same can’t be said about business data.

Yes, old and messy data can get you into legal problems. So other than the operational efficiencies to be derived from data hygiene, there are crucial compliance benefits as well. Poor quality data is expensive — it costs the US economy alone in excess of 3 trillion dollars annually.

But first, what is data hygiene?

Database hygiene definition

Data hygiene involves the data management practices organizations deploy when regularly reviewing their databases to ensure all information is relevant, current, and of high quality. It’s a set of processes that ensure the removal of irrelevant and outdated data. The end result of data hygiene is information that is complete, correct, and consistent.

Hygiene is the action. Cleanliness is the end result.

Think about the strict hygiene protocols that must be put in place for a biomedical research laboratory. There will be checklists and procedures that detail what anyone walking into or working within the laboratory needs to follow, from decontamination and disinfection to washing and scrubbing. Much like laboratories, clean rooms are also helpful for marketers— data clean rooms, that is. Database hygiene practices have the same objective for your database.

Why is data hygiene important?

Data hygiene is important for multiple reasons. We’ve already hinted at some of these, but let’s drill down further into some of the most important reasons for maintaining data hygiene.

1. Quick, precise targeting

Your ability to reach the right audience at the right time with the right message is directly tied to the accuracy of your business’s data. Correct information makes it easier to identify sales-qualified prospects, thus shortening your sales cycle.

Quicker and more precise targeting leads to more conversions and more sales, and ultimately delivers a higher return on your marketing spend.

2. More efficient use of funds and other resources

In the worst-case scenario, inaccurate, irrelevant, and outdated data can lead sales and marketing campaigns in the wrong direction. In the best case, such data chaos would see your use of funds and resources failing to realize an optimal return.

An Experian Data Quality study found more than three-quarters of companies surveyed believed their bottom line was affected by incomplete and inaccurate contact data. The same survey saw respondents estimate that an average of 12% of revenue is wasted due to poor data.

Data hygiene routines help you avoid financial and resource loss by handing your organization teams the data accuracy they need to achieve success.

3. Minimized compliance risks

The EU’s GDPR, California’s CCPA, the UK’s Data Protection Act, and other recent privacy and data protection laws around the world have given new urgency to data hygiene efforts. The cost of inaccurate data and mishandling customer information has become too costly to risk.

Even if your organization doesn’t currently fall under the jurisdiction of these new data protection laws, it’s only a matter of time before it does. You’re better off developing a data hygiene routine early.

4. Same version across the organization

Data consistency is a major challenge in large organizations. Different parts of the business may not necessarily work with the same data.

Data hygiene ensures each department is interacting with the same business and customer information. Consistent data leads to better customer relationships and higher lead conversion.

5. Better forecasting and decision-making

Analytics can be a powerful tool that helps you identify opportunities whose existence you were previously unaware of. You get to see where it’s best to invest future marketing and product development budgets.

That said, analytics is only helpful if it is underpinned by correct, up-to-date information. The more accurate your data, the more accurate your data analytics. And if your data analytics is accurate, your decision-making and forecasting will be too.

6. Customer satisfaction

Imagine calling up a customer and asking them questions that no longer apply to them because the information in your database is outdated. They wouldn’t be too pleased with you—nor would they be very confident in your business practices.

On the other hand, when customers feel that your company always has their most up-to-date information, they will be more likely to keep doing business with you.

Get a data hygiene solution that works

The ability to harness data and analytics to improve enterprise outcomes is one of the most important competitive advantages a business can have. And such success is only possible if the company has embedded data hygiene practices into its everyday procedures.

Don’t have the capacity to run data hygiene or don’t know where to start? Get in touch with us and find out how Lytics can make it happen.