B-to-B Data Decay The Untold Story
We Sell to People, not Companies
By John M. Coe
The very term business-to-business (b-to-b) implies that companies buy from other companies. Well, not exactly.
What actually occurs is people make purchasing decisions to buy from other companies. In other words, companies don't buy anything—people do. Therefore, in developing b-to-b direct marketing campaigns it's of critical importance to first target the correct individuals within the companies and then get and/or maintain accurate contact information of those targeted.
In fact, it's been determined that from 50 percent to 75 percent of a b-to-b direct marketing campaign's success rests on the accuracy of the list used in the direct marketing communications, whether it be by mail, e-mail or telephone.
We all know that people change jobs within their companies or join a new companies. The question is how fast do people change their contact information. Direct marketers must target and communicate to the correct "buyer" within the company.
In 2001 we conducted research on the accuracy of contact information and gathered 1,025 data inputs from a variety of businesspeople. Here are those results:
70.8 percent had one or more changes in a 12-month period.
The changes break down as follows:
65.8% title/job function change
42.9% phone number change
41.9% address change
37.3% e-mail address change
34.2% company name change
3.8% name change
We didn't calculate a change rate for fax number, because this frequently is a shared data element and doesn't represent a data attribute of the individual.
Upon further analysis, we found that 29.6 percent of the individuals changed companies. Therefore, several additional statistics can be determined:
• 4.6 percent of the companies changed their names;
• 12.3 percent of companies moved locations; and
• 41.2 percent of the individuals did not change companies but something else changed such as their titles, company names or addresses.
The Decay Rate Has Gone Up
We performed a similar study in 1995, and at that time 62 percent of the individuals had one or more changes. This compares with 70.8 percent six years later—in other words, the decay rate in b-to-b data has worsened. In 1995 about 31 percent of the individuals changed companies, and in 2001 this dropped slightly to 29.6 percent.
The biggest difference from the 1995 study is a 10-percent increase in movement within a company, as 41.2 percent of the individuals reported data changes without a company change, compared to 31 percent in 1995.
How to Keep Data Accurate
Therefore, the problem is how to keep your own database of customers and prospects accurate. Granted, the list companies have a similar job to do, and many are improving their data-hygiene methods. The following suggestions, though, are directed at the data-hygiene processes required to develop and maintain an accurate internal database. Here are several approaches to employ:
1. CASS Certification and NCOA. The first step is to ensure that the mailing address exists and is current. Send your list to an experienced computer service bureau for address certification and standardization or CASS certification. Then have these addresses checked against the National Change of Address (NCOA) file to pick up those companies that have recently moved.
2. B-to-B Data Compiler Matching. Several large business data compilers exist, including D&B/iMarket, InfoUSA, Experian, Acxiom, Harris InfoSource and Hoovers. These firms offer either directly or through service providers an ability to match their information against companies on your file. If a match is found on the company information and your record is different, it's probably wise to use their data. It likely will be more accurate.
3. Direct Company Contacts. Every day marketing, sales and customer service people make contact with customers and prospects. Here are several suggestions for maintaining up-to-date information within each customer-facing group:
- Sales: Institute a customer-retention mailing (usually a newsletter), and ask your salespeople for the key contacts in each of their customer accounts. If they see the program as helping them sell more, they'll cooperate. Don't send sales an output file of their customers and prospects and ask them to update it. This won't work, and it'll alienate the salespeople as well.
- Marketing: Returned snail mail or e-mail should be used to update the database. In fact, it even may be worth it to periodically send direct mailings First Class if, for no other reason, than to create a stack of non-deliverables. Treat the returns accordingly based on the reason listed on the envelope for the failure to deliver.
- Customer Service: Most customer service departments access the customer record when they interact with the customer. Assuming that the contact names also are on this record, have CSRs ask, only after delivering the customer service, if Mr. John Smith is still the president, etc.
Five More Proven Methods to Consider
1. Yearly E-mail Update Request. Once or twice a year send an e-mail request to customers and prospects that contains the information you have on them and their company. Request verification. Most individuals will correct their information if it's inaccurate.
2. Trade Show Interaction. When you exhibit at trade shows, take a computer with your company contact database on it. When customers or prospects stop by, look up their company records and show it to them. First, they'll be pleasantly surprised that their company is on your database, and second, they're almost always helpful in correcting the information.
3. Hire an Outbound Telemarketing firm. If your data have decayed badly, it may be cost-effective to hire an outbound telemarketing firm to verify, correct and add additional information. This is particularly cost-justified if you're selling products or services that have a high dollar value.
4. Phone-mail Contact Sequence. In almost all direct mail campaigns the normal contact sequence is mail followed by a phone follow-up. Reverse this order. Call first to verify the individual still exists and, if not, who the proper contact is, and then mail. This list clean-up typically will pay for itself in reduced mailing waste and increased revenue (obtained because the correct individual received the mailing).
5. Send the mailroom supervisor brownies. Guess what? The mailroom supervisor doesn't get any mail (except from Pitney Bowes). For large companies with mailrooms, first call and determine the name of the supervisor. Then pull a list of your contacts at that company site. Buy a box of great brownies (my favorite is Fairytale Brownies in Phoenix), and send your list along with a request to update and add contact information inside the box of brownies. Not only will they love the brownies and maybe handle your future mailings with increased care, but the response rate of returned updated information (as reported by several of our clients) is more than 50 percent. Be sure brownies cost no more than $25, as many large companies don't allow gifts to exceed this amount.
During the years I've heard other suggestions on how to keep customer and prospect databases accurate—for each one I've always said "yes." In other words, think of as many methods as possible, and use them all. This is a very important and challenging problem facing b-to-b marketers and must be attacked with dedication. The reward is better data, which will lead to greater sales—a goal on which we all can agree.
John M. Coe is president of Database Marketing Associates and founder of The Sales & Marketing Institute. He can be reached by e-mail at firstname.lastname@example.org.