Data Decay: Causes and Solutions
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In today’s day and age, information and data are everything, which shouldn’t be a surprise to anyone. After all, we all live in the so-called information age. What most people fail to realize, however, is just how much modern businesses depend on data collection.
The Internet allowed companies to reach and collect data on a scale never seen before. Businesses rely on it to generate revenue and continue growing their customer pool. Therefore, it’s essential for them to keep their data pools fresh and limit data decay to a minimum.
What Is Data Decay?
Data decay happens when once-relevant data becomes unusable by the company due to aging, a hardware failure, or simply getting lost. But what do we mean by this term, and how exactly does data decay?
As you probably know, businesses collect a vast amount of information on their current and potential customers. This data is then processed by the business’s sales and marketing teams in an effort to generate additional leads or revenue for the company.
The data businesses collect includes emails, addresses, phone numbers, business locations, and other relevant contact information. This data can decay by becoming irrelevant and, in turn, impact sales performance.
No, bytes didn’t get an expiration date overnight. Data decay refers to each email address that ends up being closed or unused but still exists in the business database. If the company is working with outdated information, it can lose valuable time and resources without any tangible gain.
Types of Data Decay
While most decay happens due to customers changing their contact or other relevant details without bothering to notify the companies, it’s not the only reason. We can observe two different types of data decay depending on the root cause.
Mechanical Data Decay
Mechanical data decay refers to any data loss caused by a mechanical failure or a malicious attack. This can happen easily if the company’s hardware isn’t properly maintained. In the end, neglect always leads to a catastrophic hardware failure that will cost the company a lot of money.
Investing in prevention is always cheaper in the long run than dealing with the aftermath of a preventable disaster. This is especially true with data since, in most cases, you won’t be able to recover anything useful.
Luckily, mechanical data decay can be easily avoided by using cloud storage or backup of any kind. Having a backup can help even against various forms of cyber and malware attacks, including ransomware.
Logical Data Decay
While sales and marketing databases can contain both new and old information from customers who used the company’s services or subscribed to its mailing lists, there’s nothing guaranteeing the relevance of the data stored.
Data quality deteriorates over time due to the nature of the data itself. The older the information is, the bigger the chance of it being useless to the company, negatively impacting sales and marketing performance. What exactly do we mean by this?
Changing the email address takes a couple of minutes and doesn’t cost anything. On top of personal emails, you also have various business emails people use during their careers. Now imagine how often people change emails when an average American changes their home address 11 times during their lifetime.
The answer is too often, and let’s not forget about throwaway emails used only to subscribe to various online services. Cell phone numbers don’t fare much better.
Logical decay doesn’t only happen when customers don’t update their contact information. It can also occur due to misspellings, either on the customer’s end or during the manual data entry by the employee.
All of this makes logical data decay very hard to spot and requires a proactive approach to identifying and removing any outdated data from the sales and marketing databases.
Data Decay Impact
Any kind of information decay will have a negative impact on sales and marketing efforts to generate revenue from leads. If a good portion of the database leads to dead ends in the form of unexisting or unused emails, it’s only a drain on an organization’s time and money.
You would think that B2B sales are immune from data decay since companies rarely change their emails, but it’s far from the truth. It can easily happen that the point of sales contact in the company has moved away to a new job in a different company, and the email is now deactivated, or the company re-branded overnight and changed its email address format and domain.
In both cases, companies should take steps to ensure that emails sent to old addresses don’t disappear, but that doesn’t always happen.
It’s estimated that the average monthly B2B data decay is around 2.1%. It may not look like a lot, but it quickly adds up. Let’s say that you have 5,000 contacts, and you lose 2.1% each month. In five months, you would have lost 415 leads, which is 10.1% of your entire database. On a yearly basis, you would lose 22.5%.
Data degradation example:
- 5,000 – 2.1% = 4895 (Lost: 105)
- 4,895 – 2.1% = 4792 (Lost: 103)
- 4792 – 2.1% = 4691 (Lost: 101)
- 4691 – 2.1% = 4592 (Lost: 99)
- 4592 – 2.1% = 4495 (Lost: 97)
Data Decay Prevention
Companies can’t stop customers from changing their emails, but they can introduce steps that will help them avoid data decay effects on their database and, in turn, increase the effectiveness of their sales and marketing teams.
Email Verification Tools
The best way to clean up your database is by verifying if the email addresses and domains stored in it exist before the start of an outbound marketing campaign. Every email service will inform you if the sent email isn’t delivered because the address doesn’t exist, but checking every email manually will take ages. Luckily, there are now tools that can automate these processes, saving you a lot of time and nerves.
Another simple way to fight email storage data decay is to include email verification during the registration process. This would prevent customers from using a fake email, but it still won’t prevent them from using a throwaway account.
Customer Relationship Management Software
Customer relationship management (CRM) software helps the company keep all its customer data in one centralized and easily accessible location. This allows for a clear overview of all interactions with all potential and current clients, and gives data for analyzing potential profit. It can be used to organize data into separate groups based on product, customer profile, or market with the goal of optimizing sales.
For CRM to be effective, it has to be integrated with other data solutions used by the company. The sales and marketing teams should use one database and not have two separate ones with different information. If a separate database is required, strict data integrity checks should be implemented throughout the organization to prevent further decay.
Data Hygiene Implementation
Data hygiene is one of the most important steps in preventing data decay, and it’s also one of the easiest ones to implement. It includes:
- Checking for grammatical errors
- Checking for duplicates
- Verifying the accuracy of information
- Checking for missing information
Most companies automate the process by asking customers to carefully enter the required information while at the same time checking their database for any potential duplicates or spelling errors, but this is only one part of it. The second part is the verification of the existing databases by cross referencing them and checking for duplicates and inconsistencies.
Backup Your Database
Having all the data in one place can be dangerous in the event of a catastrophic hardware failure, a deliberate cyber attack, or an act of sabotage. Every company, whether they are focusing on online or traditional marketing, should maintain their existing equipment and infrastructure and invest in on-site or online backup.
Unless the company knows how to deal with phishing emails, it’s already at risk of being infected with all sorts of malware, which can halt all current operations, lock everyone out of the system, and cost additional money for everything to be repaired and returned to working order.
Such attacks can happen even with the best possible security training and anti-malware protection. For this reason, you want to have a backup of all of your data. It’s easier to repair and reinstall the entire operating system and copy the data over from another device, instead of trying to recover it from infected or encrypted drives.
Ask Customers To Update Their Data
Another low-cost method for combatting information decay is asking customers to update their contact information regularly. There’s no guarantee they’ll do it, but most people only need a reminder. That said, most people don’t consider updating their contact information on some websites they visit once or twice a year their top priority in life.
The best way to do it is by creating interactive polls or other content that will get the users engaged, so you can collect the information for verification or correction purposes.
Focus on Inbound Marketing
Instead of chasing leads and converting them to subscribers, it’s better to grow a company’s organic reach by creating a marketing strategy based on interesting content and offers that will attract customers to the company.
Instead of focusing only on the website, the company should look to expand its operations to include popular social media platforms. The biggest drawback of this method is that it is time and financially consuming, but it has the potential to create a constant stream of new leads and subscribers, which can offset logical data decay.
Data decay is a naturally occurring process in any business. The only thing organizations can do about it is to try and stay on top of it and not allow themselves to drown in the vast amount of useless data they may have collected over a certain time period.
With the implementation of the right tools and procedures, data decay can be handled easily, and any sales company will see its marketing performance improve over time.