Why Your Ability To Scale Depends on the Quality of Your Data 

We live in a data-obsessed world, and for good reason. Data is the only way to make objective decisions about anything, especially when it comes to scenarios like business. It is only with good data that a business can sustain the growth process, which can often be surprisingly risky. 

This is because growth, by its very nature, involves a multiplication of data. More customer records, more finances to track, and more variables that affect your business. What’s more, sales and marketing, two aspects critical to growth, heavily rely on good data.  

In this article, let’s find out why data is so important and why securing good data is worth investing in. 

Data Actively Affects Your Finances

Newer entrepreneurs may not understand the impact that bad data has on a business because it’s not immediately obvious. The truth is that data affects a huge percentage of companies, often putting them into serious financial loss. 

According to one report by IBM, 25% of organizations lose over $5 million annually due to poor data quality. What’s more, 7% of organizations suffer losses of $25 million or more. As a result, 43% of COOs cite data quality as their top priority. 

How does this happen? Well, think about it. Poor data in the context of insights means that sales and marketing teams would waste time chasing the wrong leads. Their strategies would fail, or, in the best-case scenario, be seriously underoptimized.  

Likewise, poor data quality in operations ends up causing issues like billing errors, mispricing, and eventually, customer churn. As CleanSmartLabs explains, the cost of dirty data compounds, and every month without cleanup, the damage gets worse.  

Poor Data Leads To Growth Blind Spots

Any good entrepreneur knows to ensure that certain key questions are always asked. In the context of data, one question is ‘How to clean customer data?’ The reason this is such an important question is that it addresses the blind spots that dirty data creates.  

One article by TechRadar highlights data that suggests 92% of valuable insights are outside a company’s CRM. In fact, 37% of companies acknowledge that their productivity is affected by trying to reconcile scattered information.  

Essentially, fragmented data is a massive problem and creates a distorted view of each customer’s profile. This creates a domino effect where workers are wasting time trying to verify information, and decisions start being made from partial information. Worst of all, bad data is worse than no data because, unless you run an audit, you trust it to be legitimate.  

This can lead to false confidence in areas like your growth metrics or customer satisfaction. [ADDED] In fact, many businesses don't realize how much stale data is costing them in missed business opportunities until the damage is already done. You can imagine how this blows up in your face when you begin scaling, trusting the data.  

Good Data Is What Gives You the Win in super-competitive situations 

Perhaps there was a time when you could get by without relying so much on data. However, today, relying on intuition and gut feeling is no longer a viable option. In many fields, competition can be quite cutthroat, and even diminishing returns are chased for the tiny advantages they bring. 

If good data means even a 1% advantage over the competition, businesses will pay well for it. It’s not surprising, then, how steadily the data market is growing as a result. According to Business Research Insights, the global data quality tools industry is set to be worth over $5.27 billion this year. It is also projected to grow at a CAGR of 12.6% to reach a valuation of over $15.54 billion by 2035.  

Data is what allows businesses to identify new trends that they need to cater to. It’s data that allows accurate personalized service, which customers have proven to appreciate.  

Likewise, any efforts at automation or integrating AI tools all require good data — and understanding how to prepare and structure data for AI is quickly becoming a core business competency. No wonder it helps so many businesses gain the edge over their rivals.  

All things considered, there’s no rule that says you can’t try to grow your business with bad data. However, you’ll probably regret doing so when everything seems to be crashing and burning. In a sense, good data is very much like steel rebar for a skyscraper. It’s what your business can rely on even when strong winds blow. 

You also have to remember that scaling a business creates a period of vulnerability. Every hidden weakness becomes visible for a moment, whether that be your poor marketing results or retention rates. Data then becomes the arm you can hold on to start addressing problems so that your business doesn’t collapse in its attempt to grow bigger.