What is the true cost of bad data?

NewtonX Insights Team | April 2, 2021

Data is the currency of market research, yet the majority of research firms bring their clients data sets riddled with low quality information that must be discarded for one reason or another.

When it comes to market research, finding the right respondents is the only path to quality data. Without a targeted approach guided by a human hand, market research firms waste their clients’ time and money just to deliver bad data.

In fact, IBM has estimated that poor quality data costs the U.S. $3 trillion each year.   

What is good vs. bad data?

In B2B market research, there is simply no room for poor quality data. There are many definitions of what makes market research data high quality, but they boil down to four core traits. Good data is:

There are a lot of boxes to tick here. NewtonX is the only B2B market research leader that has the processing power to achieve each quality goal.   

Common pitfalls in market research

A lot can and does go wrong when other companies conduct market research. Data can be bad because the person you’ve targeted simply doesn’t meet the right criteria. Companies that work from panels end up using old email databases and surveying people they know nothing about, whose credentials and experience are never verified. While the participants may be able to pass a screener, they often and easily do so by lying. This leads to fraud that may never be identified until it’s too late.

In most cases, selected participants actively try to scam surveys for the financial reward. If a stay-at-home dad impersonates a neurosurgeon to make a few bucks from a survey, he obviously won’t be able to answer the questions in any meaningful way. When fraudulent participants make it into a survey, they pollute the data with irrelevant or nonsensical answers. Companies that fail to monitor response quality pull in bad data from the very beginning. This has severe consequences for their clients down the line.

The compounding costs of bad data

Businesses lose 30 percent or more of their revenue to bad data, to the tune of $9.7 million to $14.2 million on average each year. The more specialized data needs are, the more a business loses — which is why B2B companies must find a reliable and efficient research partner from day one.

Bad data is at the very least a huge waste of time, and we all know that time wasted is revenue down the drain. Many market researchers sell clients on the fact that they don’t have to pay for respondents removed, but that approach puts the burden of data validation in the hands of clients who aren’t equipped to properly strip out the poor data.

When bad data makes it past the research firm and into the hands of a client, losses continue to compound. Not only has the client paid for poor information, they will use that information to make poor business decisions.

If, for example, a software development company wants to build a project management platform for cloud architects, they need the insight of managers with demonstrated experience. If their market research partner hands them survey results of people who don’t actually have the necessary level of seniority or expertise, who haven’t used the competitor’s product or who haven’t worked in the right industry — or who might not even be employed at all and are pretending in order to take the survey — the company won’t be able to address the right pain points and may even build in a variety of useless features.

When this happens, the effect is threefold. First, the company finds it has wasted countless dollars throughout development. Second, the product won’t sell. Third, the company may suffer substantial reputational loss that affects their ability to remain competitive in the long run. Companies can avoid this cascade of consequences altogether by sourcing clean data in the first place.

How NewtonX provides clean data

NewtonX skips the dragnet method. We don’t put out a mass call for responses from a large pool of anonymous people who were not ID-verified. Rather than weeding out the wrong respondents, we precisely target the right people in the first place. We know who they are before we even send them a survey. Our rigorous selection process allows us to find verified professionals who meet any number of specific criteria. As a result, we’re proud to promise zero fraud in our data.

NewtonX is taking action

The NewtonX Custom Recruiting method provides our clients with the data they need, when they need it. Here are three examples of how NewtonX has delivered top-tier research.

1. Fielding quality data

NewtonX stepped in when a leading tech firm had to discard 55 percent of a sample they received from a leading market research company. Of that 55 percent, the market research company discarded 35 percent, and the client themselves discarded 20 percent after a manual audit. When we re-fielded the study, we only had to scrap 3 percent of the data.

2. Pinpointing niche data

Not only is our process accurate, relevant and timely, it’s highly efficient. In one case, NewtonX was able to save a global management consultancy’s project by sweeping in to reprogram the entire survey and find a sample size of 400 highly niche algorithmic traders who used a specific source of financial data — all in just 10 days.

3. Sourcing data quickly

For one due diligence survey in the finance sector, we achieved 300 completed surveys across three continents and four segments in 10 days. No other company could find enough professionals to meet the required criteria.

Sometimes, companies just need to find one true expert. When a client’s former research partner spent a month trying and failing to find an expert on an emerging technology, NewtonX found the right fit within 48 hours.

We’re just getting started

In 2020, NewtonX proved we are the premier source of custom B2B market research. In that time frame we delivered:

NewtonX Business Results: 40,000 completed surveys each year, 3,300 completed interviews each year, 75 projects delivered monthly, 24 hour turnaround time

We even delivered 7,000 completes from a single client in two months. With numbers like these, it’s no surprise that 96 percent of our clients return to us for a second project, and 55 percent refer us to one or more colleagues.

If your company needs a market research project, you can expect swift action from NewtonX. We can wrap expert consultations in one or two days, get quick survey results in a week, get in-depth surveys run in a month or follow a longitudinal tracking survey for a year. Contact us to find out more about how our efficiency and accuracy benefits your bottom line.

For more on this topic, check out our infographic visualizing the cost of bad data for an organization.

 

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