Data Accuracy Essential for Proactive New Business
Just because you have a database doesn't mean it's accurate
Most agencies have a new business database. Twelve years ago, while working at another company, I would've agreed with the majority of agency principals who believe that their database resembles a Chippendale chair more than it does a head of lettuce.
That belief changed dramatically when I saw with my own eyes that elements of more than 30% of our prospects' contact information changed every 3-4 months. All of a sudden, that repository of information that I thought was a valuable business asset became a liability. How was I going to keep it current?
This was in the days before information was available online, so we rented lists and spent significant dollars doing so. However, the alternative was hiring a couple of full-time people to do nothing but update our database, which was a more expensive option.
Today, the situation for agencies is similar, but many still ignore the reality of inaccurate data. This is not a situation unique to our industry: every company that sells anything has to deal with it. Many have realized that the cost of not keeping an internal database up-to-date is the opportunity cost of a lost sale. In other words, the cost of inaccuracy is:
- The time it takes to constantly look for accurate information. Measure this as the person's equivalent fully-loaded hourly cost (i.e. including benefits and company-paid taxes) times the number of hours they spend digging for information every day. Then, turn this into an annual cost.
- Calculate the number of leads they could have generated had they not needed to research. From that, calculate the number of prospect meetings they could have set up, and the value of the resulting business that could have been won over the course of a year.
It doesn't take long to do some rough calculations - you'll have it in less than 5 minutes. I also encourage you to figure out how much it would cost to hire someone to keep your internal database accurate.
The good news is that there are a variety of information providers who supply varying degrees of accurate and relevant prospecting databases for agencies and marketing services companies, at a reasonable price. (The price will appear to be a steal once you have the numbers mentioned above.)
The best news of all is that you don't have to give up on your internal database. If you want, you can use any of these resources as your updating resource - let them hire the people to do the research on your prospect companies, so you don't have do.