23rd Jul, 2021
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- Data-based marketing generates actionable business intelligence which can be used by businesses to drive personalized customer experiences
- Data decay increases inefficiencies in marketing and sales and hampers lead generation hurting the overall ROI
- Data decay can be eliminated through continuous data maintenance, in-depth profiling, and data validation programs.
The rapidly changing state of the economy over the past couple of decades has given rise to a new essential commodity: data. However, much like other aspects of the digital industry, data is also constantly changing and evolving. As a result, new-age marketing solutions have been developed on the very foundation of data collection, storage, and analytical practices. But what happens when this data becomes obsolete? And is there a way to prevent it?
Here we discuss why data is essential to modern day marketing, how data decay can derail sales and marketing, and how to minimize data decay.
The importance of data in marketing
Two in every three marketers say that decisions based on data are better than those based on their gut instinct. And with good reason, businesses that use data-driven marketing tactics report a higher ROI.
Almost all forms of modern marketing techniques use data to understand and track their audience behavior. Sophisticated analytical tools and models are applied to the vast amount of data generated by customers using social media platforms, smart devices, and other digital services.
This form of data-based marketing is primarily used to personalize customer engagement and create a unique digital experience for the audience. Targeted marketing communication based on data offers higher success, costs lesser, and creates a consistent customer experience across varying stages of the customer journey. What’s more, it provides an accurate measure of the RoI, insights on brand awareness and perception, helps businesses collect feedback, and test new products.
Data-driven marketing has become the norm in today’s digital-first marketing industry and will only gain further momentum in the future. Since data is a fundamental aspect of marketing today, most businesses and marketing service providers maintain comprehensive customer databases with relevant information.
What is data decay?
Data decay, or data degradation, is the rate at which quality, accurate, and reliable data decrease. For marketing specifically, it means the rate at which data like contact info, address, email, and accuracy of business data, like location, role, or organization, become obsolete.
There are many reasons why data decay differs in each industry and organization. However, at a broader level, data decay in B2C marketing is usually caused by customers relocating, starting to use a new phone number, or changing their email.
In B2B marketing, the factors are more business-oriented and tend to be when people take up new jobs, change their role or profession, change their official contact information, or the entire company rebrands or relocates. For instance, nearly 25-33% of all emails become outdated, and almost 60% of professionals change their job titles within one year.
Why is data decay a challenge for marketing?
The first impact of a high data decay rate is directly experienced by everyone in the marketing and sales team. All representatives with inaccurate data and incorrect information are unable to reach the intended audience, resulting in lower productivity and missed targets. They struggle to reach their delivery numbers and goals, even with the best effort. If left unchecked, a high rate of data decay will make it tough to justify the RoI on database marketing.
Leads and pipeline suffer
The next casualty is naturally going to be a lesser number of leads and a dwindling pipeline. As marketing and sales campaigns fail to sustain the supply of leads and prospects, it becomes increasingly difficult to keep meeting sales and revenue goals as well. Thus, engagement and conversion rates drop, whereas the churn rate goes up.
One of the most hurtful aspects of the damage inflicted by data decay is the misdirection of time, resources, and effort. Rather than chasing prospects based on obsolete databases, the sales and marketing team are better off focusing on other challenges, finding solutions, and implementing solutions.
No matter the medium of the outreach, data decay in databases impacts the reputation and image of the business. For instance, undelivered emails or emails marked spam make it increasingly harder to run future campaigns. Similarly, unsolicited telecalls to the wrong audience will generate a negative perception of the business. Thus, maintaining the email deliverable rate or the rate of cold calling at healthy levels becomes even more vital.
How to prevent data decay?
Enterprises can eliminate data decay by employing automated digital tools for data maintenance, data cleaning and deduplication, and data profiling. Information collected from various data points is likely to be more relevant and accurate, as opposed to a single source. Relying on a few data sources for information also makes the database prone to the same set of sampling errors and data fallacies.
It is also important to remember that data collection and database management are ongoing processes to expand the scope of data and periodically refresh it. A continuous data collection process enriches the database with more relevant information, new prospects, and eliminates errors.
Know more about the correct strategy to select the right data partner
Data hygiene practices are measures to prevent the degradation of data over time with mechanisms like data quality checks, deduplication, contact verification, and system reconciliation. Data hygiene also involves data enrichment practices that allow making existing information more comprehensive and filling in the missing data. For instance, adding missing pin codes or country codes, or including detailed information on lifestyle, demographic, behaviors, and preferences.
Invest in reliable third-party services
Finally, depending on the size of the data team and the resources available, consider collaborating with a provider of marketing databases. As stated earlier, marketing agencies and services maintain comprehensive B2B and B2C databases to boost their campaigns. But more importantly, they have dedicated teams that ensure the quality, accuracy, and reliability of the data by limiting data decay factors. Most organizations tend to commission data collection and analysis to marketing experts (like Denave) for the best results.
Database management in marketing: Best practices
While discussing ways to arrest data decay, it is also important to note a few best practices of database management in marketing to ensure better results and impact:
Set and enforce data quality standards
Ensuring database cleaning and quality before using the data for analysis or outreach helps eliminate many challenges associated with database management. Implement strictly standardized and consistent data quality protocols that prevent duplication, fragmentation, and distortions. Further, training the team on the right ways to collect, input, and manage data is also vital.
Deploy CRM and automation solutions
Using customer relationship management (CRM), automation, and customer database software solutions is one of the easiest ways to optimize data collection and management. In addition to simplifying these processes, CRM tools help analyze voluminous data easily.
Ensure that all the team members are well-versed with the tools and software used and can make the most of their features. The CRM industry is the fastest-growing software in marketing and provides a good return for each dollar spent, in addition to better conversion and revenues.
Use validation tools
Deploy quality management solutions such as data validation and verification tools to ensure that the database is uniformly populated and contains the most accurate information. Most validation tools can be easily integrated with CRM systems as well.
Use analytics to visualize insights
In order to truly comprehend the missing pieces of the database and understand the insights of the data collected, use data visualization tools. Reports and analyses help understand the overview of trends, customer insights on behavior and help develop the right customer segments and categories.
Unlock more insights: Importance of Data warehousing and the changing landscape of BI
Secure the data
In addition to securing the database with the best data security tools and protocols, managing access, and encrypting the data, be sure to create backups periodically. No matter whether the database is stored on the cloud or locally, it needs to be safeguarded against leaks, sabotage, and loss.
Data decay in marketing: The last word
Data decay poses a serious threat to the success of digital marketing techniques and, if not arrested, can derail entire campaigns. Enterprises that aim to implement data-driven marketing must set up strong database management practices or collaborate with experts in the domain. Please get in touch with experts at Denave to explore how B2C and B2B databases can bolster your marketing and sales campaigns.
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