How Old Data Is Sabotaging Your New Marketing Growth
At the BIA Kelsey Leading in Local interactive local media conference in San Francisco last week, the top names in local marketing joined forces to discuss the changes occurring in the local media industry. Industry leaders spoke about shifts in the way we access and evaluate local businesses, and it was overwhelmingly clear that the state of local media is ripe for innovation.
“Even five years ago I had to explain to people the benefit of having a website. That’s not even a question anymore.” –Koka Sexton, LinkedIn
At the BIA Kelsey Leading in Local conference last week, I noticed a distressing disparity between the ideas industry leaders forged upstairs in the presentation hall and the conversations that circulated at the booths downstairs in the expo hall. The way marketers evaluate businesses is changing rapidly, but the data we use to fuel our systems is stuck in the past.
At the Radius booth in the BIA Kelsey expo hall, a gentleman approached the booth and requested a demo. He asked me how the Radius application differentiates between good and bad leads. Next, the gentleman asked about price per lead.
I wanted to show him how Radius can help him determine which factors best predict propensity to buy his specific product. I wanted to build him a list of leads that would be very likely to convert to sales. He wanted to know whether the reps he hires to cold call will have to sift through closed businesses. He wanted to know how cheaply he could acquire leads through Radius compared to how cheaply he could acquire leads through a supplier he’s used in the past. I wanted to show him how Radius can help him grow his business, but instead, I told him that our technology has recently eliminated 700,000 closed businesses, and I showed him how many more filters he gets in Radius than in his old data service. He still thinks about small business data in archaic terms. A good lead is a record that contains fresh, accurate information about a decision maker. A bad lead contains wrong or outdated information, or a lead that will never buy your products. We talk about leads as if they are all universally valuable.
The gentleman I spoke to at the Radius booth in the BIA Kelsey expo hall imagines a database that segments leads by “updated within the last year” and “not updated within the last year.”
When I told him that the Radius database updates in real-time, he asked how many suppliers with whom we maintain contracts.
Before information became vastly available online, marketers relied on supplier data that indexed purchase patterns and predicted spending capacity. As small business credit card adoption grew increasingly prevalent, supplier data grew increasingly unreliable. To fill in the gaps, companies developed the cold calling model that Hoover’s today uses as a way to verify company information. The economic downturn in 2008 further shifted the way businesses access and spend capital at the same time that social media exploded in popularity. The Internet has eclipsed the data supply industry, and some experts predict that suppliers will merge to form super-suppliers with vast stores of data that can be cleaned against each other. Unfortunately for the data supply industry, technology has eaten the world, and unless they move online, data technologies like Radius will rule them obsolete in less than a decade.
Many argue in favor of the longevity of data suppliers because they believe data about small businesses just aren’t available.
Take a look at the social statistics on businesses with fewer and more than fifty employees from the Radius database:
While a 36% difference separates small and large businesses on website presence, notice how the gap narrows on social media. Small businesses are catching up to big businesses when it comes to social media, and as a result, we’re gaining incredibly valuable insights about their interests.
However, most of us are still stuck in the past.
At Radius, the shortcomings of our more conventional competitors are of great interest to us. I recently conducted a little competitive analysis on small business data. I reached out to a number of leading data providers with a simple question: how’s your coverage of small business data?
The responses ranged everywhere from: “To be honest, this is probably not the best solution for you,” to “We have 16 million records in our sales and marketing database in the US with 50 employees or less, and we update 2 million records per day.” And this response from a data provider that boasts 65 million businesses. When you consider that 95+% of businesses in the U.S. employ fewer than five employees, 16 million out of 65 million seems incredibly inaccurate.
Because a number of these companies are public and send emails with confidentiality stamps, I can’t share the exact transcriptions of my conversations, but I can share my conclusion:
The amount of data available about small businesses in the U.S. is sorely lacking–especially when compared to the amount of data available about big businesses in the U.S.
Marketers still evaluate SMB data like it’s 1999 because most SMB data is still stuck in 1999.
At Leading in Local, Radius CEO Darian Shirazi spoke on a panel with experts in using big data to transform marketing. Ian White, Founder of Urban Mapping, helps businesses define audiences with sophisticated geotargeting that pulls data from customer behavior. Dan Hight, VP of Channel Partnerships at xAd, offers location-verified mobile traffic to local advertisers. Jeremy Geiger, CEO of Retailigence, allows brands to reach customers when they’re within range. And at Radius, we help marketers better target prospects based on traits that are unique to their best customers.
Today’s marketers have access to a wealth of knowledge about customer behavior and interests that was not available just a few years ago. So why aren’t we taking better advantage of it?
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