Today more than ever before, data is critical to businesses as the driving force behind decisions. Yet many companies unintentionally rely on inaccurate data that leads to costly mistakes, missed growth opportunities, and paralyzing inefficiencies.
Bad data goes beyond correcting a typo in a field. The compound effect of data affects everything from forecasting, compliance, and collaboration to customer and stakeholder relationships. Bad data costs companies $12 million on average.
If your company is making decisions based on bad data, you're flying blind. Understanding the true cost of poor data quality in revenue loss, inefficiencies, legal consequences, and relationships, and how to address those, should be a top business priority.
The Cost of Bad Data
Revenue Loss
Data informs everything businesses do and plan. When we don’t have accurate or complete data, it affects historical and future planning and reporting.
Bad data affects how businesses interpret demand and interest. Followup on opportunities may be missed, or forecasted revenue may be incomplete.
If multiple leads are incorrectly categorized as not converted, companies lose out on a potentially valuable source of potential deals. Incorrect or duplicate records could lead to wasted ad spends and marketing budgets on the wrong people for the wrong reasons.
Even outside of potential earnings, bad data can cost businesses big time. Gartner estimates businesses lose $12 million on average due to bad data. This involves potential revenue and the resources to identify bad data, clean data, and implement processes to ensure accurate data moving forward.
Inefficiency
Bad data inevitably affects team productivity. Teams have to spend valuable time and even money to verify, clean up, and reconcile data that should have been accurate in the first place.
Even generating meaningful business activity wastes time if it involves bad data. Selling with no or bad data wastes 27.3% of a sales rep’s time, or about $20,000, per year.
60% of outbound calls reach the wrong person because of bad contact information, the person is no longer with the company, or the lead isn’t qualified based on business priorities and ideal customer profiles.
Compound the time it takes to clean and update that data, and you have a sales rep that is almost half as productive as they could be and will take twice as long to achieve their goals. That means bad business for their morale and your bottom line.
Incorrect data has downstream effects on automations and workflows. These can affect teams internally or other aspects of the business, such as customer service and operations.
For example, inconsistent data can lead to either overordering or running out of stock. This costs time and money to manage stock, manage backorders, manage customers, and warehouse storage, just to name a few.
Regulatory and Legal Consequences
Poor data can expose your business to possible fines, legal trouble, and eroded trust with stakeholders and clients alike, especially in certain industries.
Strict data regulations govern what data is collected, how it’s stored, and what can be done. Mishandling or miscollection can result in fines, legal action, and loss of industrial compliance.
Inaccurate medical information could lead to denial of claims and possible legal repercussions.
Data and Relationships
Data even drives relationships. Consumers and clients use data to measure trustworthiness and if a company is worth their time, resources, and referrals.
This indicator can take many forms, such as evidence-based results, brand identity and alignment, or stewardship. Now more than ever, customers expect companies to deliver on their promises. How do they know a company has done that? Data.
We’ve all gotten the emails that begin as “Dear {First Name Field}”. Whether we acknowledged it or not, that made the company, in our minds, appear as careless and sloppy. Dirty data will dirty your company’s reputation.
How a company stewards data matters. If a business sends out inaccurate information or isn’t aware of past interactions, a customer’s trust in that company will disintegrate. Even worse, that lack of stewardship may go viral, damaging even potential relationships
Other stakeholders rely on data to determine if the business is accomplishing its overall goals. Boards and other committees use it to determine what is working, what isn’t, and what. Poor data erodes stakeholder relationships and confidence in the business investment over time.
Why Good Data Should be a Business Priority
Better Decisions
Better data leads to better decisions. Strategy and direction are no longer gut instincts but confidently backed by experience and context that guide decisions.
These decisions affect investments, resources, and trends within the industry.
Good data means we can also make better decisions faster. No longer does leadership have to question if data is correct or teams spend time cleaning up data before the end of the quarter.
Companies are more nimble, allowing them to respond to and lead the market quickly compared to their competitors.
Better decisions have compound benefits as companies continuously iterate. As businesses make more and more decisions based on good data, it’s easier to either gradually move toward business goals or correct the trajectory when needed.
Better Customer Experience
Data helps improve and personalize the customer and stakeholder experiences. This leads to more effective and productive interactions that contribute to revenue and mission rather than detract from it.
The more data you have about someone, the more you know them. The more you know them, the more you can market to them. You know their preferences, decision making schemas, and what motivates them.
In turn, you know about their interactions with your business and what about you resonates with them. You know the products that they’re most likely to buy, the locations they visit, the services they’re interested in.
Combined with unsiloed data, this can be very strategic for businesses. Using the entire customer persona and experience creates a relationship between your business and your customers. You can then leverage this relationship to find, win, and keep more and more customers.
Better Collaboration
Data is the glue that holds teams together and ensures they’re rowing in the same direction. Siloed, inconsistent, and outdated data causes miscommunication and strategic inefficiencies, slowing collaboration and outcomes.
Integrating data is key to making sure all teams are working together effectively. Making accurate data available across silos reduces conflicting information, duplicate efforts, and inconsistent customer experiences.
The intersection of sales and marketing is one of the most crucial cross-functional collaboration relationships. If marketing targets existing customers but their sales data is wrong, they may be targeting the wrong customers, wasting their budget, and falling short on their goals.
Arming both teams with the same good data is essential to improving lead qualification, nurturing, conversion, and customer experience. Reducing friction in this process directly affects business revenue.
Data is an Investment, not an Afterthought
The difference between leading your industry or lagging often comes down to the quality of your data. Companies that prioritize data accuracy, integration, and governance unlock faster, more informed decision-making, stronger customer relationships, and more efficient operations.
Clean, reliable data enables teams to work together seamlessly, helps businesses personalize customer experiences, and ensures compliance with regulatory requirements. Most importantly, it gives leadership confidence that their decisions are based on truth, not guesswork.
If you want to protect your revenue, strengthen your reputation, and drive long-term growth, treating data as a strategic asset is essential rather than optional. Are you making decisions with data you can trust?