The very term business-to-business implies that companies buy from other companies. Well, not exactly. What actually happens is that people make purchasing decisions to buy from other people at companies who are selling products, services or software.
Companies don't buy anything. People do. And they generally buy from people based on some level of relationship. This becomes more important as the complexity of the sale moves from commodity to solution. None of this is news to anyone. But the way most B2B marketers behave suggests they have forgotten it entirely.
If people buy from people, then finding the right people and knowing how to reach them is the single most important thing a marketer can do. Yet most of the budget, effort and attention goes elsewhere. That is the problem this piece is about. And the scale of it is worse than most marketers realise.
Contact data decays at 70.8 percent a year. Yes, really.
We conducted a research study on the accuracy of contact information and gathered 1,025 data inputs. The method was straightforward. When giving seminars, I asked the audience to pull out their business card and check any element on it that had changed in the last 12 months. All cards, with or without changes, were collected in exchange for a copy of the research.
The result: 70.8 percent of the business cards had one or more changes in the previous 12 months.
The breakdown tells you a lot about why your CRM is quietly rotting. Title or job function changes accounted for 65.8 percent. Address changes hit 41.9 percent. Phone number changes reached 42.9 percent. Email address changes came in at 37.3 percent, slightly lower thanks to the rise of personal Gmail accounts. Company name changes affected 34.2 percent, mostly driven by people moving to new employers. Even name changes showed up at 3.8 percent, as people still change their name upon marriage or divorce.
Digging deeper, 29.6 percent of individuals changed companies entirely. 4.6 percent of companies changed their name through mergers or acquisitions. 12.3 percent of companies moved locations. And 41.2 percent of individuals stayed at the same company but something else changed, a new title, a restructured department, a relocated office.
This is not just an American problem
Several years ago I was giving a seminar in London to about 100 people. Before running the same exercise, I told the audience I expected the change rate to be much lower in England, because "you are all much more stable than us Americans."
Well, the hands went up, and to everyone's surprise it was exactly 70 percent. The same as the US. So much for stability.
On the other hand, a seminar in Shanghai three years later with 50 people produced a change rate of only 45 percent. And several years ago, the Computer Intelligence division of Harte-Hanks (now Aberdeen) reported a change rate of just over 60 percent in the US technology market.
No matter what the exact percentage, whether it is 60 percent or 70 percent, it is high. And the trend is going in the wrong direction.
It is getting worse, not better
We ran a similar study more than ten years earlier, and 62 percent of individuals had one or more changes in their business card. That compares with 70.8 percent a decade later. The decay rate for B2B contact data is increasing.
The proportion of people changing companies held roughly steady, dropping slightly from 31 percent to 29.6 percent. The biggest shift was a 10 percent increase in movement within companies. 41.2 percent reported data changes without changing employer, compared to 31 percent in the earlier study. People are being restructured, promoted, reassigned and relocated more frequently than ever.
There are newer methods and firms compiling B2B data now, and these lists are an improvement over traditional approaches. But they still contain inaccurate data at some level. It is worth checking out any data provider before assuming their promoted accuracy rates hold up in practice.
Outside lists are less accurate than you think
This usually leads marketers towards external lists, particularly for acquisition campaigns. So how accurate is the compiled information in those lists?
We conducted a snap survey as a data check. We called 50 records from each of three different list sources to verify key contact name, title, company name, address, email and phone number. A record was scored inaccurate if one or more of those data elements were found to be incorrect.
The results were sobering. A B2B trade association membership list came back 20 percent inaccurate. A large B2B data compiler was 35 percent inaccurate. And an industrial directory was 60 percent inaccurate.
Your own data is probably worse
Here is the part that surprises people. Internal customer and prospect data can be even less accurate than external lists. Most companies do not have a rigorous data hygiene process in place. Internal data, once entered, is rarely revisited to update contact and company information, even with widespread usage of CRM and marketing automation platforms.
"There is an old axiom widely accepted in B2B, and it is this: a great campaign sent to a lousy list will not do as well as a lousy campaign sent to a great list."
John Coe
So why does this matter more than everything else?
There are four elements that affect the success of a B2B database or direct marketing campaign. Each has a weighted impact on results:
Targeting and list data that matches the audience accounts for 50 to 70 percent of campaign performance. The offer drives 20 to 30 percent. Sequence, frequency and cadence of contact media contributes another 20 to 30 percent. And creative, which is typically copy-led, accounts for 10 to 20 percent.
The most important element by a significant margin is the targeting and matching data. Yet most of the money gets spent on the other three. There is an old axiom widely accepted in B2B, and it is this: a great campaign sent to a lousy list will not do as well as a lousy campaign sent to a great list.
Most marketers know this instinctively. Very few act on it.
So what should you actually do about it?
Spend time and money on developing and obtaining the best lists and data possible. The payback will be significant. This is particularly true when you consider the investment most companies are making in their marketing technology stack. None of those technologies work to their full potential without good data feeding them.
Your data governance process needs a fixed set of input rules, double checks and procedures for updating accuracy. Ideally, you have merged your data silos into a customer data platform and instituted sound data input rules. But the hardest part remains: verifying, correcting and updating contact-level information on an ongoing basis.
That is a tough job. But given that targeting accounts for up to 70 percent of your campaign performance, it is the job that matters most.