Data, an organization’s intellectual asset, must be treated and regularly enriched to remain useful and valuable. Over 80% of companies we’ve worked with, — including Fortune 500 organizations — recorded up to 50% growth in sales and customer satisfaction as one of the many benefits of data enrichment. Those that enriched data in line with a company-wide data management plan recorded a 2X increase in ROI.
In this quick post, I’ll cover the three key benefits of data enrichment – sales efficiency, enhanced customer experience, and ROI.
Data Decay – The ‘Why’ of Data Enrichment
On average, data decays at a rate of 30% per year. The impact of this decay costs businesses millions annually.
Here’s a basic calculation of the costs of decayed data:
Assuming you have 2000 contacts and the cost of acquiring each contact is $20 (the average lead acquisition cost for a B2B company). 5% of the 2000 contacts changed their last names, addresses, phone numbers, jobs or other important information in the last month. That change was not recorded in your CRM. You have 100 stale records in your database, and that number grows every month.
Six months down the line, you have 600 outdated records or 30% of your audience data. That translates to a contact cost of $12,000. Now, if you add in operational costs such as calling the customer to verify and validate their information, the figure balloons.
For instance, a company we worked with was losing $225,000 in potential sales revenue, as a result of ignoring data decay.
With 30,000 prospects in their Salesforce CRM and an average prospect-to-opportunity conversion rate at 10%, the company would have made $9 million even if they closed 30% of the deals. Ignoring a data decay happening 2.5% a month, the company lost nearly a quarter-million dollars of potential sales revenue in just a month. That’s $2.7 million in a year!
If you don’t fix data decay, you’re easily losing millions of dollars in potential revenue.
How Does Data Go Bad?
As people switch to new jobs, move to new places, or take up new names, the data entry you had for them in your database gets outdated and the customer record loses relevance – unless it’s updated and enriched regularly.
And changes happen rapidly. 18% of telephone numbers change annually. Americans move around 11.7 times in their lifetime. Email addresses decay at a rapid pace of 22.5% annually. Companies that don’t update their CRM in line with these changes, risk losing money, value & customers. Not to mention, it will cost you data compliance risks, low customer satisfaction, and a failing brand image.
The consequences of bad and decayed data also impact sales and marketing efforts. For instance, companies with poor prospect lists will see a decline in sales efficiency, while struggling with costly but ineffective marketing campaigns. There are no benefits to data enrichment if you do not sort outdated, obsolete data.
Is Data Enrichment the Answer?
Data enrichment is often touted as the solution to poor sales intelligence. Companies spend millions of dollars in enriching audience insights to sell better.
To truly benefit from data enrichment though, you must prioritize:
- A data quality framework where current data is cleansed, deduped and optimized
- A data enrichment plan that details why you want more data, how this data will be mapped to the existing database and what is the desired outcome of this enrichment activity
- A department or team-wide data management plan. Your teams must be equipped with data enrichment software to merge, purge, and enrich records.
Contrary to popular (and incorrect) use of data enrichment, it is not a process for improving sales intelligence – rather it’s to enable the organization to improve its sales effectiveness and marketing performance. A useful, insightful sale intelligence report is the outcome of an efficient sales process.
How Does Data Enrichment Improve Sales Efficiency?
Put simply – smarter sales prospecting!
It’s a frustrating experience when your sales team spend time on low-quality prospects. Worse, if there’s missing or outdated information (such as a different last name), it could lead to an awkward conversation between the sales rep and the prospect.
Enriched CRM data enables your sales team to use additional insights to create the right messaging and address the prospect’s need through data-driven intuition.
Key data enrichment benefits for the sales team include better targeting and segmentation, effective lead nurturing, higher conversion rates, and increased sales opportunities.
Let’s see this with an example.
A B2B solutions provider was struggling to meet its sales targets. Despite having tens of thousands of prospects, they just could not achieve annual targets. The company was also gathering firmographic data on their audience, hoping to expand their target audience, but they were constantly struggling with high email un-subscribe and bounce rates, costly social media ads with low ROI, and a low-performing team.
When the company initiated an investigation, they discovered that their CRM was a mess with endless customizations created by sales reps, their prospect lists were rife with data quality issues (such as typos, incomplete and obsolete information), and sales reps were spending 30% of their day navigating the CRM, manually validating, verifying, and updating information.
While the company did try enriching their data with additional information, they made a classic mistake – you cannot enrich data if your first-party data is dirty, duplicated and disparate.
Clean, complete, accurate data is a pre-requisite of data enrichment.
The first step we took was profile their data where they were able to assess the quality of their data. The profiling revealed:
- 25% of the data met data quality guidelines (clean, usable data).
- 54% of the data was average with deduplication, incomplete and inconsistent information.
- 21% of the data was unusable.
The records were then cleansed, standardized and optimized. Lists were matched to remove duplicates. Once first-party data was transformed, it was merged with third-party data to create consolidated records. This new record was handed over to sales and marketing team leads who were then able to get a clear view of their prospect data, enabling them to segment the lists and create targeted marketing campaigns.
The result? Over a period of six months, the teams were able to group their prospects according to lead source, title path, industry, company size, job function, average salary. With this information, the marketing team was able to create personalized content and offers, targeting qualified leads, increasing conversion rates. The sales team was then able to assign lead scores, leading to better lead grading, driving sales conversions.
The bottom line: You can’t just add more data to a poor database. Your sales and marketing team cannot spend 30% of their time fixing this data. Your data quality has a direct impact on your sales and marketing performance.
What About ROI?
A clean database enriched with insightful data leads to quality prospecting, which paves the way for higher conversion and therefore higher ROI.
But lead enrichment and sales efficiency is just one part of the equation. What truly connects data enrichment to ROI is the multiple benefits that an enriched database has to offer. Some of the key activities benefitting from data enrichment are:
- Account-based marketing strategies where you can target the right account list
- Perfecting segmentation by perfecting data
- Building on data to gain intelligence on what motivates decision-makers
- Creating targeted marketing strategies
- Delivering customer personalization
- Improving on customer services
- Adding new verticals to existing information will accelerate acquisition and enhance customer retention rates.
As you work to increase data accuracy and completeness of information the CRM and building data from your own CRM business systems, you’ll save hours of time for your team and enhance operational efficiency.
Your team will save time and valuable resources on having to manually fill, update, or clean CRM information. Instead, they can use that time in engaging more customers to increase sales, develop deeper relationships, acquire more valuable insights – translating to higher revenue.
To Conclude – Enrich Your Data, Drive Your Revenue
Being data-driven is about going beyond customer analytics and transactional activities. It’s about understanding the underlying behavior that motivates them to become buyers and finding the key component that can help your business acquire new customers. It’s about making your teams operationally efficient by giving them data they can trust.
This post was originally published here.