What is data cleaning and why is it important?
Chances are that your business is sitting on a ton of customer contact data – chiefly phone numbers and email addresses. But how much of that data is useable? And how much of it is compliant? Welcome to the world of data cleaning and why it matters.
What is data cleaning?
Data cleaning, also commonly called data cleansing or data scrubbing, is a process that businesses undertake to ensure that important customer data is up-to-date, valid, and accurate. This is achieved by identifying and correcting any inaccuracies, duplication, formatting errors, or incomplete data entries.
Businesses of any size can collect data from multiple sources. This can unfortunately lead to duplicates, inconsistent, or misplaced data – which leads to dirty data.
What is dirty data?
Dirty data is best defined as any data that either can’t be reliably used by businesses, or, arguably worse, data that distorts reports.
Incomplete data is any record entry missing crucial information. An example of this is a customer profile missing a last name.
Formatting errors can be a serious obstacle towards satisfying even the most basic customer experience demands. An example is an incorrectly formatted phone number that makes it impossible to send customers shipping updates on their purchases.
This can be incredibly frustrating for customers and businesses, since mistakenly entering a wrong or incorrectly formatted phone number can lead to missed deliveries. Or an invalid email address can result in a nurtured lead failing to convert.
What’s more, customers move, change phone numbers, and sometimes even change their email addresses. Whenever these changes happen, your customer data is no longer up to date. Usually customers will update this information during their next interaction – but between the change of data and their next interaction, you could risk sending proactive customer service messages to invalid destinations.
This brings us to why clean data matters and why data hygiene is so important.
Why is clean data important?
Clean data is important for several reasons – one of them being accurate reporting for improved forecasting. This is because businesses rely on accurate data to make well-informed decisions.
Maintaining proper data hygiene provides businesses numerous important benefits:
- Boost customer acquisitions: Having clean data is a prerequisite for your omnichannel strategies to succeed. Gain more customers by using more accurate data for personalized outreach.
- Increase sales and revenue: It still costs considerably less to keep existing customers than to acquire new ones. Having data that’s up to date helps you create personalized and conversational customer experiences that loyal customers respond to.
- Informed decision making: Clean data is accurate data, and the only way to make well informed decisions is by basing decisions on reliable data.
- Optimized productivity: Automated interactions rely on clean data. Chatbot automation improves customer satisfaction, accelerates time to first resolution KPIs, and allows human agents to focus on high-priority, high-value customer service interactions for increased productivity across the board.
- Improved ROI: Marketing costs money. But when you target only valid customer addresses and numbers in a clean database, your ad spend goes down, while open, read, and conversion rates go up.
- Lower costs: Businesses can reduce costs by rooting out invalid emails and numbers from their databases, and the costs associated with sending to invalid destinations.
By taking steps to ensure data cleanliness, businesses optimize costs while improving customer engagement – and make smarter decisions. One smart decision that doesn’t rely on clean data is to get started on data cleaning. But how?
How to perform data cleaning
The first step to data cleaning is the simplest – data de-duplication. Making this your first step to data cleaning reduces the number of records you’re dealing with, allowing for more focused cleaning in the subsequent steps.
Duplicate entries are very common when dealing with customer databases populated from various sources or departments. Duplicates can be merged, prioritizing records of a newer date. Doing this can help to eliminate any potential missing data from other entries.
Next, another quick fix is to take care of structural errors. In data, structural errors like typos, missing capitalization, formatting, etc. can lead to mislabeled categories, which hurts your data accuracy.
After this, deal with any leftover missing data. Audit records with missing data and sort them by data priority – i.e., any records missing critical data can be dropped or flagged pending corrections; or if the missing data isn’t as critical to your database, you can choose to keep it and populate any missing data as it is made available.
Once you’ve gone through these steps, all that’s left is validating records. Validating records can be a tedious task involving rooms full of agents emailing customers and waiting for replies, or calling numbers. Or, you can automate this process using email validation and Number Lookup.
What is email validation?
Email validation is the process of ensuring that email addresses are genuine, up to date, and reachable. This is important since natural subscriber attrition for email as a channel is around 22% per year, invalidating nearly a quarter of your records each year.
There’s a quite a bit that goes into validating email addresses, and we have a dedicated blog on what email validation is, as well as some best practices.
What are the benefits of email validation for businesses?
Email validation benefits businesses in a few ways:
- Database cleaning: Email validation lets businesses automate bulk cleaning invalid email records, or validate entries in real time. Whether older email records naturally attritted or were incorrectly entered, email validation can help with both invalid record types.
- Cost optimization: By cleaning databases and ridding them of invalid or unreachable email addresses, businesses avoid the cost of sending to invalid addresses – and with yearly list degradations of nearly one quarter, the savings are easy to calculate.
- Reputation: Sending to invalid email addresses negatively impacts sender reputation. A lower sender reputation results in emails hitting spam boxes and can even end up getting senders blocked by email service providers (ESPs).
- Fraud prevention: Real-time email validation helps protect against sign-ups by bad actors by identifying patterns in naming, address age, and domain validity. Through timely identification of potential fraudulent actors, businesses can protect themselves and their customers.
These are just a few of the most basic benefits for any business. But it’s not just email addresses that businesses should be validating. Mobile phone number records also need to be refreshed at least as often.
What is Number Lookup?
Number Lookup is Infobip’s number validation service that checks the status of phone numbers in real time against operator records or regularly refreshed databases.
We describe in more detail what Number Lookup is and how it can used for number validation in this blog.
The information available through these checks provides information on real-time number validity, i.e., whether a number is available. And there are several definitions of “available”, here, and they’re contextual.
For example, a customer can be unavailable because they’re in an area with poor coverage, have turned off their phone or had their battery lose charge. Or they may be denied service over an unpaid bill.
But Number Lookup provides detailed information on number statuses in real time, and this benefits businesses in several ways.
Number Lookup benefits for business
Getting number status information in real time benefits businesses in a few critical areas.
- Database cleaning: Number Lookup can be used to remove dead numbers from databases, root out incorrectly formatted numbers, or validate numbers in real time to ensure data hygiene at signup.
- Cost optimization: When targeting large databases of numbers, businesses can reduce overall costs by using Number Lookup to message only numbers that are available, and avoid the costs associated with messaging any invalid or inaccessible numbers.
- Fraud prevention: Bychecking numbers in real-time for important transactions, i.e., cash withdrawals from ATMs abroad or account sign-ins from different geographic locations, businesses can protect their customers and themselves by requesting customers to authenticate these actions.
While Number Lookup helps with more than just cleaning data, it shouldn’t be overlooked as a very effective data cleansing tool.
Clean your data – and more – with Email Validation and Number Lookup
Data cleaning is important for many reasons. With benefits including increased conversions, improved customer satisfaction, accurate reporting and forecasting, which leads to smarter, data-driven decisions – data cleaning is a quick and easy win for any organization.
Using Email Validation and Number Lookup solutions from Infobip helps you clean existing databases, validate new data entries in real time – helping improve the quality of new sign-ups and conversions. And both solutions also help protect your business and your customers from potential fraud.
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