A shift to digitally-led experience selling—in which B2B organizations more effectively engage customers throughout the buying journey—can enable lower cost of sales, lower customer acquisition cost (CAC), and higher revenue growth. This may require investments in sales teams and infrastructure—with incremental change giving way to bold transformation. As the digital future of B2B sales and marketing continues to evolve, so does the role of data. According to the Global Data Management Report, 72% of business leaders say that the rapid push toward digital transformation has made companies more reliant than ever on data when making critical business decisions.
The Cost of Bad Data
Using incorrect data can lead to burn across many facets of an organization—according to HBR, “the reason bad data costs so much is that decision-makers, managers, knowledge workers, data scientists, and others must accommodate it in their everyday work. And doing so is both time-consuming and expensive.” The way this realistically plays out for B2B organizations is that team resourcing is strained, loss of credibility and clients, and subsequently, the effectiveness of campaigns leads to demand generation and ultimately downstream revenue and closed/won deals. In the U.S. alone, invalid data contributes to $3.1 trillion in total financial losses for B2B companies yearly.
To fulfill the greater demand for data-driven decisions, B2B organizations must constantly refresh and properly maintain data assets to prevent data decay from driving incremental results over time versus seeing diminishing returns on account of larger databases which could, indeed, be decaying at a quicker rate than the growth of the database itself. However, even today, an overwhelming number of companies cannot secure their data hygiene, causing serious damage to their businesses.
To keep up with the rapidly changing data ecosystem where billions of data points change daily, quarterly, and yearly, businesses need to quickly adapt to the shifting landscape of that data and learn how to maintain their B2B marketing and sales data, and stop rapid data decay, often leading to significant business challenges including lost revenue and increased operational costs.
Impact on Pipeline
Data decay plays a detrimental role in sustaining your pipeline when we consider activities such as generating leads to qualifying and follow-ups. In many cases, a lead is only as good as their contact information. You miss their phone number then you miss that opportunity, you capture a personal email, and you’ll be ignored. You might build a pipeline with massive investments in marketing, but it would yield little results if data decay continues to corrode it.
Let’s quantify the impact on your organization, and on your pipeline to add some context to your business. If B2B data decays at a rate of 20-30% per year, on average—not including impacts from the pandemic—that means you’re potentially losing out on 30% of the associated pipeline due to that outdated, corroded data. Now, when you extrapolate that 30% across deal sizes and quantity of deals, you could be looking at millions of dollars of revenue lost simply because your data was out-of-date and not cared for.
What Is Data Decay?
Data decay refers to a process when the quality of your B2B database deteriorates with time due to containing inaccurate, incomplete, or outdated information. Unfortunately, data decay is unavoidable, especially when using static data in sales. To keep your data up to the minute, it needs constant nurturing and monitoring. This requires both financial and time resources from your team.
What Causes Data Decay?
Data decay and degradation have many root causes, often each of which works in concert with the others to deflate the efficacy of your data: software bugs, manual human input, or the inability to keep up with the flow of constantly growing information. On average, B2B data decays at a rate of 2.1% per month. Your company’s data decay rate may be affected by several factors, including the industry you are working in (high-tech is particularly vulnerable), the customer type you are targeting, the location where you operate, etc.
Other factors come into play here when we consider the constantly-evolving B2B landscape. Mergers and Acquisitions have a major impact on organizational data including hierarchy information, revenue, employee size, and locations. Contact data, too, is subject to constant decay, for example,, people change jobs and businesses merge. The decay rate in areas such as job titles can be as high as 50% change a year.
How to Fight Data Decay?
To learn more about fighting data decay, stay tuned on our upcoming article on how to fight data decay!