For any business, good data is like gold dust. It’s critical to uncovering the biggest opportunities in your customer base and making decisions that move your business forward. But gathering that data, ensuring its accuracy, and keeping it up-to-date doesn’t happen by itself.
Enter data enrichment, an important practice for businesses that want to understand customer preferences and plan for success. Let’s take a look at the definition and benefits of data enrichment, how it works, and how you can get started.
What is data enrichment?
Data enrichment is the process of turning raw data into valuable and actionable insights by putting it in context and making sure it’s accurate. This is achieved by supplementing data with relevant information that makes it more valuable.
Think of data enrichment like solving a jigsaw puzzle: After checking that you have the pieces you need, you then put them together to form a clear picture of your audience and use that clarity to build meaningful customer relationships.
Types of data enrichment
You can carry out data enrichment on any of your existing data, including:
- Contact data like phone numbers and email addresses, so you can reach customers directly
- Geographic data such as country, region, or city of residence to inform your location-based campaigns
- Demographic data including age, gender, or marital status, which is particularly useful for personalized B2C campaigns
- Technographic data such as a customer’s device type, usage habits, or tech stack for more effective targeting
- Behavioral data from view duration to search history, helping you understand your customers’ individual patterns and plan accordingly
- Firmographic data like a company’s industry, size, and revenue—all of which are especially important for reaching decision-makers with B2B campaigns
Internal data sources vs. third-party data
Data enrichment relies on 2 types of data:
- First-party data comes from internal data sources within your own business, like your customers’ purchase history, survey responses, or website analytics.
- Third-party data refers to information gathered from external sources, like data brokers or aggregators.
Since first-party data comes straight from your audience, you have full control over its quality and accuracy. On the other hand, third-party data can offer information your internal sources might miss. The key is combining data from your internal and external sources for a more comprehensive picture of your customers.
The difference between data enrichment, cleansing, and appending
These terms are often used interchangeably along with data enrichment, but there are some key differences to keep in mind.
- Data cleansing is the process of removing outdated or inaccurate information from your database, like inactive email addresses, duplicate entries, and even typos that could confuse your Sales and Marketing teams.
- Data appending is about filling in missing fields in your existing data, like going through a list of contacts’ email addresses and adding their phone numbers.
Just like data enrichment, data cleansing and data appending are important practices that help you maintain great relationships with customers—which in turn helps you drive sales and retention.
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How will enriching data help your business?
With richer, more reliable data, you can focus on your most valuable prospects and make more strategic decisions. Here’s how data enrichment makes it all possible.
Reach and retain the right customers with enriched data
Let’s say you make winter weather gear. You’ll have an easier time making sales by using enriched data to home in on people living in cold places, rather than targeting those in tropical countries. Or, if you offer software for remote project management, your best prospects are businesses with multiple offices and scattered teams, as opposed to single-site companies—and your enriched data sources can point you in the right direction.
It’s not just about acquisitions, either. Customer data enrichment helps you understand how your customers’ needs grow and change over time, so you can tailor your messages and keep your audience coming back for more. Raw data may tell you a company’s size, but enriched data could show you its rate of growth over time, putting you in a position to offer the company upgraded services and help it scale at the right moment.
Personalize your campaigns for better engagement
Generic messages will never have the same impact as those that come with a personal touch. With enriched data, you can segment your audience more effectively and deliver campaigns that feel personal and relevant—making customers feel like you’re speaking directly to them.
Take discounts, for instance: They’re nice on any day of the year, but surprising a customer with a discount on their birthday creates a moment of joy they’re less likely to forget. You can also recommend accessories or upgrades to go with their past purchases. Even little touches like adding a customer’s name to an email subject line can significantly boost engagement.
Save time and costs
Email bounces and invalid phone numbers aren’t just frustrating for your Sales team—they’re costly for your business. Poor data quality can drag even the most effective campaigns down, wasting resources that could be better spent on qualified prospects. With the right data sources and data cleansing techniques, you can ensure your messages land in the right places.
Not to mention, as any business with a large database to manage will know, data storage isn’t cheap. Removing unnecessary data points and cleaning up your system can help reduce your data management costs while improving your overall data accuracy.
Make the most informed decisions
Good strategies are built on visibility. When your data is clear and accurate, you’ll be able to easily identify trends and opportunities—and act on them at the right time to amplify your sales.
Let’s say you sell sports gear, and your data analysis reveals that customers who buy gym clothes in January often buy protein powder soon after. You could bundle these items together in a “New Year, New You” campaign and boost up-front sales. Or if you notice your software as a service (SaaS) products getting really high engagement during free trials, you could roll out targeted offers based on each user’s most-used features and encourage them to convert.
When should you enrich your customer data?
Better data integrity is beneficial for any business, but the following points identify some moments where data enrichment is especially important.
You need to improve existing data quality
Whether you’re looking at incomplete records or missing customer details, if low data integrity is stopping you from strategizing with the full picture, it’s time to enrich your data. And if you’re struggling to reach customers due to incorrect contact details or duplicate information, data cleansing can help you keep your communications on track.
You’re preparing a major campaign
When you’ve got big news to share, like an exciting product drop or a new branch opening, you don’t want customers to miss it—especially if you’ve invested heavily in your campaign’s creation. Enrich your data first to ensure you’re reaching the right people in the right way.
You need to increase engagement
If your campaign performance starts to dip, you might have a data problem. This is especially noticeable if your email or newsletter list is growing, yet you’re seeing a drop in open rates or click-through rates. It’s a signal that it’s time for you to reassess your personalization and segmenting strategies, guided by customer data enrichment.
How do you pick the right data enrichment tool?
One of the most important aspects of data enrichment is the tool you choose to do it with. This tool plays a vital role in validating your existing data sets against external data sources and helping you fill in any gaps.
But not all data enrichment services are equal. With so many options out there, here’s how you can pick the right one for your business.
Choose a data enrichment tool that matches your goals
As with any tool, you’ll see the best results when it’s purpose-fit for the job. Take the time to find data enrichment tools that match your business goals. Some tools are better at gathering certain types of information than others and enrich data in different ways.
Consider what kind of data is most valuable for your business. For example, if you’re running an e-commerce site, perhaps you need behavioral data for personalized offers. Or, if you’re more interested in deliverability, find a tool that specializes in building out contact data.
Make sure it integrates with your CRM system
Your customer relationship management (CRM) system is the backbone of your customer relationship strategy, so it makes sense for your data enrichment software to integrate smoothly with it. Once your data can flow smoothly between platforms, you’ll be able to keep your CRM system’s customer data up-to-date and accurate in a couple of clicks.
Check if the tool meets data governance regulations
Above all, your customer data platform needs to follow data governance regulations, especially major regional standards like GDPR or CCPA—it’s the best way to ensure compliance across your marketing campaigns. Customer data is extremely valuable for your business, but it’s critical that you keep it safe, especially when it comes to personal information.
Ask for a demo
Don’t just rely on customer reviews—it’s always good to try before you buy. Once you’ve narrowed down your search for data enrichment services to a handful of top contenders, get in touch with their Sales team to ask for a guided product demo. That way, you can get a firsthand look at the tool, explore its data enrichment techniques, and make sure it fits your goals before you commit.
How should you get started with data enrichment?
Data enrichment may sound complex, but it begins with a few straightforward steps. Approaching the process systematically will land you the best results.
Run customer surveys
Sometimes the simplest way to gather customer data is to just ask. Surveys can produce valuable qualitative data that isn’t available from external data sources, like direct feedback on your products or services. You could even offer your customers an incentive to encourage more responses, like a discount or exclusive content.
Maintain good data hygiene
If your existing datasets are flawed, it’ll impact your sales and marketing efforts down the line. Make sure to practice good data hygiene by regularly updating and cleansing your customer data. And if you have multiple data sources, be sure to link them up in a single data management platform. Campaigns built on accurate, well-organized customer data will always produce better results.
Regularly review your data enrichment process
Data enrichment isn’t a one-and-done task—it’s an ongoing process that delivers more value the more you invest in it. Revisit your data enrichment process as your business grows, and ensure your tools and strategies are still the best for you.
Measure your results as you go
Like any strategy, you won’t know if your data enrichment efforts are paying off unless you establish clear benchmarks and measure your results. Set key performance indicators (KPIs) like email open rates, customer acquisition cost, or conversions, and monitor your progress toward them.
If it looks like you’ll fall short of hitting a KPI, audit your enrichment and data cleansing process to see where you can improve. There may be other data enrichment solutions that suit your business better, or you may need to gather more data to maximize your campaign performance.
Enrich your data, connect with customers, and increase sales
Knowledge is power, and data enrichment is one of the best ways to build your team’s knowledge of your customers. Use the data enrichment techniques we’ve covered to fine-tune your targeting, make better strategic decisions, improve your customer experience, and get more out of every sales and marketing campaign.