An Insider Guide to Your Next B2B Data Purchase

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BEING a b2b data driven marketing company, we get regular questions regarding data quality. Based on the typical conversations we then have with clients about data, it is obviously widely misunderstood. After deliberation, we thought it would be useful to look at how data – in particular b2b data is often sourced and updated.

For newcomers to b2b data purchasing, often expectations are much higher than those who have been dealing with b2b data for many years. Having dealt with thousands of clients from across the spectrum, we are well placed to look at why this may be the case. If you are sitting comfortably, then we’ll begin our guide to how b2b data is generated and then cleansed, verified and enhanced.

Where does business data come from in the first place?

In the UK, the starting point for many data sources is an application for a new telephone line – this could be for a new or existing business. Once this occurs, after a period of time, BT or another supplier arrive at the customer’s premises and install and validate the line. After confirming the number is live, the phone number is added the to the OSIS or ‘Operator Services Information System’ file.

A daily update to the OSIS file contains between 30,000 – 100,000 additions, deletions or amendments making the file the only up-to-date and therefore most comprehensive source of telephone number information in the UK.

Once downloaded, the new businesses within the file are used by 118 providers and also the major directories to supplement their databases. Initially, the larger directories communicate with the new entries to ask whether they wish to be included in their directory. After a period of time without a response, this typically leads to a follow up call to see if a listing is required. If you prefer to opt out, then you do not enter the directory and therefore you will not be present in the majority of business databases, as this forms the primary source for most b2b data providers.

How is the business information updated after this?

Ok, so we have our initial information with differing degrees of gathered and verified information – usually Company Name, Address and Decision maker name. What happens next?

Well, contrary to the belief of many b2b marketers when they first enter the b2b space – this is the last update the record will receive from most sources until either: –

  1. The directory contacts the business again to update the record, most probably when renewing or upgrading their entry or advert and therefore this most likely would be an annual or bi-annual process – not as frequent as many expect.
  2. The record is selected to be cleansed and enhanced by a third party.

Many people believe that b2b data is or should be updated constantly but they forget two important facts, namely, there is actually no requirement for any company to voluntarily update any directory entry they are featured in – and they typically don’t. Secondly, there is no official database held anywhere which requires a company to provide updates.

Contrary to what many marketers believe, Companies House is the official register for Company information and Director information, but this is not intended to be comprehensive, it is only updated at 12 monthly intervals, and it primarily holds company registered addresses and Name, not trading names and trading addresses or more specifically, marketing information.

What do the different third parties, data providers and resellers do then?

So if the background data is the same, this leaves a big question. Why do the above exist and what do they do?

The answer to this question is really quite simple. They add value to the data.

Added value comes in many forms with business data and here are some of the many examples: –

  1. Telephone cleansing parts of the database – many third parties add extra layers of information to the data, whether this is adding more contacts, turnover, employee numbers, email addresses or other detailed information.
  2. Deriving credit and risk scores – using algorithms which can provide an indication of the likelihood of a company to pay its bills.
  3. Cross referencing with other data sources – connecting groups of companies and parent -subsidiary relationships.
  4. Aggregating data sources – many business data providers have unique records which they have built up over time. On average from a universe of 2m+ records, this may be 10-20% meaning 200k+ unique records.

A b2b data myth debunked.

An often used line from a person selling b2b data is “all of our business data is constantly updated.”

As we have already explained, the only real effective way to update business data is to either telephone or research each record. So on that basis, we can calculate how many calls this would take to achieve and see if that is really possible.

A single telephone operator using a predictive dialler can make about 150 dials per day, resulting in around 100 switchboard level contacts. Lets assume that every one of these calls is effective and results in a cleansed and updated record.

In one year, (which is around 228 working days), a single operator could therefore clean around 22,800 records. For the sake of simplifying the numbers, lets assume a combined total b2b universe of in the UK of around 2.28m records, which lies somewhere in the middle of most companies estimates of their universe. This would mean that a team of 100 operators could just about clean a business universe of this size once during a 12 month period.

Ok, now we have an approximate number to work with, so lets look at the cost of doing this.

Typical salary for a UK based contact centre operator in the UK – £12.8k per annum.

100 operators for one year would therefore cost around £1.28m per annum. Translate this into sales and the cost of doing this activity would exceed most b2b data providers’ turnover.

So why is my b2b data out of date?

Now we have our costs, there are a number of other issues. First is the big one. Data decay. There are many estimates of the decay rate of data – the one we hear the most is 43% per annum, though this was pre-recession, so it may have increased.

On average how long do decision makers stay in a position. This actually varies depending on the position and the type of company, an owner managed company would obviously tend to be much longer than an employed Managing Director.

I don’t have up to date research on this but I presume it hasn’t changed much during the last 5 years so typically I will use 5 years for a Managing Director, 4.5 years for a Financial Director, 3 years for a Sales Director, 2 years for a Marketing Director (they are always getting promoted or moving to a bigger company – in many cases, as it is a more recently created and fast changing job role).

What this means for b2b data is that on average up to 20% of Managing Directors, 33% of Sales Directors and 50% of Marketing Directors change every year.

This is important because even if we are ringing every company with our team of 100 operators all year round, in many cases we may call just before or just after the change of decision maker. This means that this record will not be updated and therefore a record will appear incorrect. As there is no centralised register of non-executive Directors, this will inevitably lead to the appearance of an out of date database.

Its interesting that whenever we speak to clients who have sourced a database of more frequently changing job roles like IT, Marketing or Sales, from a data provider, they invariably complain about the freshness of the data – now you may be able to see why. You may also see why most data providers shy away from offering contact level freshness guarantees – it simply isn’t possible to offer one!

KnowledgeBank work across the entire data market with many different data sources, types and suppliers, so we can help you navigate this if you get in touch.


About the Author:

KnowledgeBank work with Companies to develop their data driven marketing solutions to generate profitable new customer relationships. We also deliver social media training, consultancy and strategy to hundreds of businesses across the UK. If you would like further information about how you can develop your own marketing activity or social media, please contact us on 01772 978 101.