The Longer You Delay, the More the Data Decay

Posted Tuesday, September 30th, 2014
Posted in: Data Governance, Data Quality Tagged: , ,

The Longer You Delay, the More the Data Decay

According to research, between 50 and 75 percent of the success of a B2B marketing campaign is down to the accuracy of the data available. Businesses also rely increasingly on Customer Relationship Management (CRM) systems – software that retains every lead, every sales opportunity and every contact record.
But software is only as useful as the data it contains, and good quality, up to date information is the key. Businesses invest thousands of pounds in obtaining leads that allow them to generate profit. But what happens a year later, when it’s time to sell something new?

This statistic from Target Margeting Mag, from a 2001 study, proves the scale of the problem: 70.8 percent of business people surveyed had at least one change to their contact record in 12 months. The breakdown of change was:

  • Job or title change: 65.8 percent
  • Phone number change: 42.9 percent
  • Email address change: 37.3 percent
  • Change of company name: 34.2 percent
  • Move from one company to another: 29.6 percent
  • Change of name: 3.8 percent

Bear in mind that this study was conducted 13 years ago. The rate of change is accelerating all the time. How long would it take for an entire database to become stale, useless and out of date? We can make some guesses based on more modern figures.

The Acceleration of Decay

HubSpot published an interesting study on marketing databases. By using simulation, it found that business databases naturally degrade by 22.5 percent per annum.

In other words, more than one in five contact records in a marketing database is lost to data decay in a single year. That’s a contact that your business invested in, and a contact that could have yielded your next big sale. NetProspex reported that data decay occurs at a rate of around 2 percent per month. Its president, Michael Bird, calls this problem a “huge potential nightmare” for B2B marketers.

Over time, this rate of decay is compounded. A healthy database with tens of thousands of contacts could be useless within half a decade. Businesses grow, change, shrink, go bust, merge and split into new businesses. People grow, change and move on.

Reasons For Decay

Why do our databases lose valuable contacts? The answers are surprisingly obvious:

  • People move jobs, and they rarely take their email address with them. If you lose contact with one person, you effectively lose contact with their organisation as a whole
  • Even if you have a personal email address for a valued contact, the contact probably won’t retain it for more than a couple of years
  • External companies and organisations enforce changes

Dying Assets

A marketing list is a business asset. It is not immune to deterioration and devaluation. As long as there is natural churn, the database is becoming less useful. It is a ‘dying asset’.

There are three very clear consequences of data ‘death’:

  • The business has to put more money into replacing the lost contacts with new leads. The longer the database is left to decay, the more investment is required to revive it
  • If you delay for too long, the expense of revitalising and resurrecting the database increases. This takes us back to the 1-10-100 rule
  • Data decays silently. Its effects may not be felt immediately. A business can use out of data contact information long after it has gone stale, running up unnecessary bills and creating unnecessary waste. GBGroup estimates that mailing a brochure to a database of 100,000 businesses results in £38,800 in waste (see their working here)

Reviving Data

Mary Firme at ReachForce says that businesses “simply can’t deliver” the expected results if data is allowed to decay. She suggests that it must be “addressed consistently”.

HubSpot cites improved marketing as a cost-effective way of replacing lost leads. Other solutions include:

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  • Telemarketing projects, where clients are called one by one to confirm their details. While effective, this is time consuming and potentially difficult to manage. What happens when a valuable contact cannot be reached?
  • Buying lists. Plenty of companies sell ‘clean’ B2B marketing lists that can replace your own list. But when purchasing a list, you don’t always know if all of the contacts are qualified. And, even if it’s a great quality list, it will still decay from the moment you purchase it
  • Exporting databases for cleaning. It’s a credible solution, but the act of exporting and importing may introduce even more problems
  • Using data quality software to clean data in situ, using the expertise of your own staff to manually review progress along the way

Solving the Problem

The data decay challenge is universal. Even if your business has not yet been affected, its contact records, Customer Relationship Management (CRM) systems and address books are all vulnerable to deterioration:

  • In the UK, Companies House keeps a record of all active businesses. It says that one business closes every three minutes
  • Our own figures suggest that 42 per cent of CRM failure is due to poor quality data
  • Businesses sroupay 37 per cent of business value is down to the data the business holds, according to PWC Global Data

A small business with a few hundred clients could manually review its database once a year. It could visit every website, telephone every contact and cross match records with public databases. It would cost money and take time, but it’s possible.

For an enterprise with thousands of customer records – or tens of thousands, in some cases – ringing everyone to check their address is clearly not going to work.

Data is always going to decay, and the bigger a database gets, the harder it is to manually maintain. Wouldn’t it be better if you could prevent decay, or reverse its effects, with regular data cleansing?

Data quality initiatives are the only way of ensuring a high standard of data quality and a low rate of decay.

Your company data is an asset, ensuring it is accurate and up to date is not a just a requirement, it is a necessity.

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Written by

Martin is CEO and founder of DQ Global, a Data Quality Software company based in the UK. With an engineering background, Martin previously ran a CRM Software business. He has gained a wealth of knowledge and experience over the years and has established himself as a Data Quality Improvement Evangelist and an industry expert.
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