In our previous article we looked at the CRM decay rate for Organisations (eg Contact = ABC Company Pty Ltd). This article considers the extra factors that affect the decay rates for contacts within organisations. (eg Contact = Ms Jane Smith @ ABC Company Pty Ltd)
Please click on the following for decay rates of Residential Contacts or Organisations.
CRM data for contacts within organisations becomes out-dated (decay) over time due to factors affecting the employee and the employee’s organisation:
- Employees changing jobs
- Employees getting promoted
- Organisations going out of business,
- Organisations relocating, and/or
- Organisations changing their name.
The effect of these factors is cumulative. In other words, contacts within organisations will have a much higher CRM decay rate than that of organisations alone, because much of the employee’s details depend on the organisation they work for. One has to consider the changes that occur at the employee level and at the organisational level.
Employees Changing Jobs
According to the Australia at Work study the average Australian worker changes their employer every 7 years. This means that every year, 14% of your CRM contacts within organisations will become invalid.
Employees Getting Promoted
Whilst there is no available data on how frequently employees get promoted, every year 3.1% of employee change the location of their work without changing who they worked for. This affects your contacts addresses, phone & fax numbers. Email address and web URLs typically (but not always) remain the same.
The organisational factors that affect the CRM decay rate are explained in our first article in this series.
Predicted CRM Decay Rates for Contacts within Organisations
Combining the above averages into a depreciating-balance model, one arrives at the following estimates.
Note that there is a difference between Incorrect Contacts and Invalid Contacts.
- Invalid Contacts are where the individual has left the organisation or the organisation no longer exists. (Ie there is no Ms Jane Doe at ABC Company or there is no ABC Company any more).
- Incorrect Contacts include those with incorrect data (eg incorrect phone numbers, emails, addresses, job titles, company names etc). (Ie Ms Jane Doe still works at ABC Company however her job title, phone number have changed). The number of incorrect contacts include all invalid contacts.
Putting the Data to Use
For example, if the average time since you last updated your contacts within organisations was two years, then from the above tables, your amount of contacts with incorrect data will be a massive 53%. Sounds unbelievable doesn’t it.
Regretfully, it pretty close to reality. We recently completed a data cleaning job on 25,000 employees within 10,000 organisations. Our customer had already segmented their CRM contacts into customers that had last purchased within the last year, Customers that had last purchased within 2 to 3 years, and customers that had last purchased more than 3 years ago. Customers in each of the purchasing bands were managed differently. Those who purchased within last year, received frequent follow up and sales calls, whilst those who purchased over three years ago received no attention at all.
During the project scoping process, we were informed by the Sales Team that their CRM data was very good and it was unlikely that we would be able to identify many issues. “Just doing this exercise to keep the CEO happy.”
The results were as follows:
I was somewhat anxious when attending the review meeting with the client’s Sales Team, Managers and CEO. The Sales Team has this erroneous belief that their data was good, yet we had determined that almost half their contacts were incorrect and/or invalid. This could only end in tears.
Knowing I was going to get slaughtered, I stood up and broke the news. There was a stunned silence and then the most unbelievable thing happened. The CEO turned to his team and laid into them “I have been telling you for years that our data is bad and you never believed me…”
There were plenty tears that day, but thankfully, none of them were mine.