It’s no secret that poor quality data costs organizations BIG DOLLARS.Being in the business of lead generation, strategic sales and marketing, and business consulting, this issue comes up time and time again with many of our clients.
It all comes down to cost versus value. Consider this; you are looking for a new appliance within a certain price range. You then realize that if you spend a bit more you may have a better warranty. Or maybe the product reviews indicate the value is worth the extra dollars. It is clear that with a durable good such as an appliance, you can touch it to feel the quality or consider the reviews and determine the cost versus value.
This is not so much the case with data. You cannot touch or feel data. You cannot determine value by looking at it, as it is intangible. There are no reviews as it is specific to you and your organization. There is also no warranty. All the more reason to look more carefully before you purchase data such as a prospecting list.
When working with our clients we spend a great deal of time discussing contact data. Who is the target, how easy are they to locate, what are key role descriptions, and what is the message you bring to them. We are diligent about educating them with regards to direct dials, the need for emails, and the ownership of the list versus a rental list. All of these are critical but often overlooked by organizations looking to buy data. A list is assumed to be a commodity item and yet it is far from it. The list is the key driver for all other actions that happen in the sales campaign. It is one of the most critical portions of any marketing outreach.
During the MarketingSherpa B2B Summit 2011 presentation, presented by MECLABS, “Optimizing the Lead,” it was discussed that a $1 per record list (“the best deal”) results in a campaign that is 2.5 times more costly than the most efficient list. In the study, the $1 per record cost, resulted in a $954 cost per lead. In a list that cost $24/record, the cost per lead was $373 and resulted in a 60.85% decrease in overall campaign costs.
The details behind this result are clear to see. Although the $24/record list cost $24,000, the calling campaign associated with that list cost $92,400, for a total campaign cost of $116,400. Comparing these metrics to the $1/record list; the total list cost was $9,350, but the calling campaign associated with that list was $287,980, for a total of $297,330. At the end of the day which result would you take?
The key takeaways are that “cheap” data is really expensive, and the less you spend on the data the more you will spend on teleprospecting. List acquisition must be seen as strategic and not simply transactional.
-Margery Murphy, President -- Acadia Lead Management Services