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The Value Of A Business Contact Database – How Much Is Yours Worth?

Posted Jan 13th, 2009 at 12:21 PM and seen 244 times


The value of a business contact database

As a B2B lead data company we take marketing and business contacts databases very seriously and and lay a lot of stress on keeping them in shape, updated and periodically cleansed. Yet, when you put things across in the perspective that Jon Miller did in his recent blog post on the Marketo Blog titled “Unleash Your House Database with Lead Nurturing” it makes you step back and really think about how valuable your marketing database is. The part of the post I am refering to is the same one Jason Stewart talks about on his Demandblog post “Your Biggest Untapped Marketing Asset?“ 

That database is a significant asset that gets undervalued at most companies. Think about it: if your average cost per new contact is even just $20 (a low assumption) and you have a modest database of 250,000 contacts, then your house database is a $5 million asset. Do you treat it as such? How many other assets of that size do you have in your company? How much revenue does that asset generate for your business?

The question that caught my attention was “do you treat it as such?”. Companies can be generous in spending on acquiring new business contacts and new leads. You can have a sizable budget set aside to run new lead generation campaigns, buy contact lists, subscribe to business contacts databases and so on. What about the existing databases of business contacts already in the database? How much goes into removing expired data and making sure the value of your existing database doesn’t deteriorate?

If you consider a 250,000 contact database valued at $5 million and also consider every year anywhere from 20% – 50% of that data could go bad or become invalid it would mean a minimum loss of $1 million. That is a considerable loss! How much would you invest to keep that database in shape and are you currently giving it the attention it needs? 

It’s something to think about!

 
  • Yup ! its too important : )
  • Excellent !
    Hope the companies can understand the vale of data base : )
  • ac1234
    Very interesting post. I believe much of the problem is the static nature that most organizations have about contact information. The investment to gain a new contact is often viewed as a one time cost, or capital investment, rather than a recurring cost or operating investment. If you take the ongoing approach and put in place ongoing or at least periodic data cleansing programs and activities, then you have to understand that the cost per contact will increase as well, and the profitability per contact will be reduced, unless, of course you can sell more product or service, or show that satisfaction or retention is improved. Very interesting idea. I can imagine that there are certain circumstances where it is actually not a good idea to clear your database (e.g., low cost of acquiring new contacts or very commoditized products and services, or no additional products or services to upsell).
    Alden Cushman
    SiriusDecisions
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