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B2B Data Decay: The Achilles Heel of Marketing

Posted by John M. Coe on Wednesday, May 27, 2020

 

Stressed-looking worker stares gloomily at laptop while holding phone to his ear

B2B Data Decay Is Worse Than You Think

We’ve all had similar experiences – email or call a customer or prospect only to be met with a bounced email or wrong number voice message.

Obviously something has changed, and the question becomes not only where he/she went, but what else has changed?

If you were working from your company’s database or an outside list, the thought might also have crossed your mind: Hmm, wonder how many of these records are also wrong?

Several years ago, when working with a mobile apps developer, we purchased a list of technology managers in companies between 50-500 employees in specific NAICS codes and geographies.

The list firm specialized in technology managers, and promoted their list as accurate since they called their database each year – or that’s what they said. You guessed it, more than 60% of contacts on the list either had left the firm (one had left the firm more than two years ago) or had changed jobs within the company.

Why was this list so bad? Two reasons:

  •  The list firm didn’t call once a year as promoted (this was later confirmed)
  •  In the ensuring year from their last call many changes had occurred.

While you might blame the list company for the bad data, in their defense, much of the bad data resulted from changes in the last 12 months and occurred between their calls.

Several years ago, we performed an independent survey of 1,025 businesspeople. Our process was rather simple. When giving seminars (I spoke a lot back then) the audience was asked to pull out their business card, and check any data element on their card that had changed in the last 12-months.

All cards (with or without changes) were collected in return for the results of the survey. I also promised them no calls from me and that helped cooperation. The survey results:

  • 70.8% of the cards had one or more changes in the last 12-months. Yikes!

 Here’s the breakdown:

  • 3.8% name change (women still change their name upon marriage/divorce)
  • 65.8% title and/or job function change (same title/different assignment or new company and job)
  • 34.2% company name change (most changed jobs and thus companies)
  • '41.9% address change (changed jobs or company move
  • 42.9% phone number change (same)
  • 37.3% email address change (some had a g-mail address so no change)

We didn’t include fax numbers because this is a shared data element, and is seldom used anymore. In fact, many of the business cards didn’t have fax numbers listed.

Upon further analysis we were able to gather a few more data decay statistics. They are:

  • 29.6% of individuals changed companies (new job)
  • 4.6% of the companies changed their name (merger or rebranding)
  • 12.3% of companies or individuals moved locations, but same company
  • 41.2% of the individuals did not change companies, but something else changed within the company such as title or job responsibility, company name or address.

Surprised? Shocked? We were, and so is everybody else that has seen these results.

So What About European and China Data?

Several years ago I was giving a seminar in London, and there were about 100 people in the audience. I asked the same question, but before doing so I foolishly predicted that the change rate should be much lower in England since “You English are much more stable than us Americans” – muffled laughter (they are more reserved).

Well, the hands went up, and to everyone’s surprise and shock it was exactly 70% - the same as in the US! I guess they aren’t as stable over there as we think, and this was before Brexit.

On the other hand, in a Shanghai seminar I gave three years ago, with only 50 people in the group, the change rate was only 45%. Most of this change rate was due to new jobs fueled by growth. That will certainly change post Covid-19.

Several years ago, the Computer Intelligence division of Harte-Hanks (now Aberdeen) reported a change rate in contact level data of just over 60% in managers working in mid to large sized company’s technology departments. This is another validation of the B2B data decay rate.

Whatever the actual percentage – 60% or 70%, it’s high! What's yours?

Why is This SO Important in B2B?

Here are 6 compelling reasons

1. We sell people – not companies even though B2B stands for business-to-business.

2. Having stated the obvious, if we don’t connect with the important decision makers and influencers within the targeted accounts or customers we won’t sell anything!

3. Money and resources are wasted when communicating to the wrong or missing person

4. All the great marketing and sales technology doesn’t work with bad, inaccurate or incomplete data, and that includes the latest two new shining objects - ABM and AI

5. Relevant and personalized communications depend on an accurate database to craft the micro-segments, personas, messages and offers.

6. There are four major elements that impact the success of B2B database outbound campaigns. Here’s the relative impact on results of all four:

  • List and data that matches the target audience 50-70%
  • Offer or call to action for response 20-30%
  •  Sequence, frequency and cadence of contact media 20-30%
  •  Creative (typically copy lead) 10-20%

Clearly the most important element is data that matches the target. Yet, most money is spent on the other three elements. There’s an old axiom widely accepted in B2B;

“A great campaign sent to a lousy list will not do as well as a
lousy campaign sent to a great list”

Now do you see why Data Decay is the Achilles Heel of B2B marketing?

What Might Happen Post Covid-19?

That’s an interested and yet-to-be answered question. Some recruiters postulate that job security will be paramount, and people will stay put. Others project an even higher job change churn combined with an “out-of-business” segment. My take is; “it depends” – a consultant’s cop out!

Actually, in this case I think it does depend on whether or not the company and/or industry were significantly affected by this panic. The more impacted, the higher the change rate, if it had not already occurred. If you’re selling one of these companies and/or industries double down on data updating!

To Sum Up

The message is clear in B2B:

  • Data decay is much higher than typically assumed, and your house database should be audited for accuracy and completeness to set a benchmark.
  • Spend time and money on developing/obtaining the best lists and data possible, as the payback will be great.
  • The payback on accurate and complete data is very high in B2B as losing just a few sales can be significant in both revenue and margin.

Having accurate data becomes particularly important when using marketing technology or as some refer to it - “the technology stack”.

None of these technologies work to maximum value without good data. Nobody debates this - not even the technology vendor.

You should double check your data governance process and procedures for updating data. For the purposes of this white paper, let’s assume that you have also merged your data silos into a unified marketing database possibly on a customer data platform (CDP).

Now your job is to continually verify and update the contacts and company information – a very tough and important job!

The next blog in this series will tackle the subject of how to keep your B2B marketing database accurate. Stay tuned.

About John M. Coe

John is President of B2BMarketing, LLC. His background includes experience on both the sales and marketing side. On the sales side, John was a salesman, national sales manager and executive in charge of both sales and marketing for three firms early in his career. On the marketing side, he was president of a B2B direct marketing agency for 10 years, National Campaign Manager at IBM, Sr. VP of B2B at Rapp Collins Worldwide and President of Protocol B2B. He has been dealing with B2B data for a long time and has the scars to prove it.

John is also the author of The Fundamentals of Business-to-Business Sales & Marketing, published by McGraw-Hill. He can be reached at john.coe@b2bmarketing.com or by calling 602-402-6588 as B2BMarketing’s website is under redesign.

About B2BMarketing, LLC

B2BMarketing focuses on 6 Fractional Marketing and 4 Sales Support services that include data research, database development and analytics. Clients range from manufacturing to technology and software for both SMBs and larger organizations.

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