For the second year, good quality customer contact data was cited by respondents as having the greatest positive impact on campaign response and conversion rates.

More than a third ( 37%) of businesses lack any formal process for cleansing their data and 19% do not validate customer contact data at the point of data capture.

The Royal Mail Data Service report  surveyed 272 senior marketing, data and analytics practitioners. It was conducted by DataIQ among its registered members in September 2016.

Respondents estimated the financial impact of poor quality customer data on the annual revenue of their business which led to an average of 5.9%.

It also found that duplicate data, incomplete data and out-of-date data were the biggest issues and all of which were becoming more of a problem for organisations.

Average annual churn rates were 20% and 52% organisations said customer acquisition this is their biggest challenge.

Jim Conning, managing director, Royal Mail Data Services, said: "Our study has revealed that poor-quality customer contact data directly impacts the bottom line. Especially as one in five customers need to be replaced each year. Marketers need to work harder to build value in the minds of their customers and stop them from moving on to a new brand or provider. Good-quality customer contact data is critical to tackling both these challenges."