$3.5 million per spreadsheet: Shocking Cost of Bad B2B Data Management

I just had the pleasure of speaking to a crowd of nearly 300 B2B marketers on the topic of "Tips and Tricks to a Great Set of Lead Data."

The folks in attendance were serious about their craft, and their companies had each made an investment of at minimum $30,000 per year plus staffing and training to put the powerful capabilities of marketing automation to use in the organizations. We'll say at minimum, this is investment is a $100,000 annual cost to the business, and ROI is not only expected, but these marketers jobs may be on the line if they don't show results.

But we marketers often cannot control the practices on the sales side of the fence, and this massively impacts our ability to show ROI.

I asked this audience a raise your hand question: "How many of your sales people keep their client list on spreadsheets and not in the CRM?" This seems a crackpot question - but I knew it wasn't.

Small, furtive low-slung raised hands briefly appeared. I quickly counted 10 people before the hands disappeared. I would guess the real count was triple that - or 10% of the marketers in that room, fronting a combined investment by the industry of north of $30 million dollars - and these folks have no control or insight into the very best customers of their businesses - and neither do the business owners.

This issue had recently come to my attention in a 2-hour consultation with a B2B Marketer looking to borrow an ROI calculator ReachForce is developing, to try to demonstrate to her leaders the cost of data abuse and the significant business risk inherent in bad data practice. She pointed out in her multi-billion revenue business, sales people were keeping their client lists in excel spreadsheets, and when they left the business, the list walked with them.

In this instance, at this business, the average ticket was about $7,000 per sale, with repeat sales every 6 months. Since purchase behavior is pretty predictable, once an account is on board, they tend to be repeat buyers -- but as this is a commodity business, buying choice is often driven by relationships -- all of which was only captured in this spreadsheet.

On a conservative 5 year life-time value (LTV), one buyer name would be worth $70,000. If this rep is managing 50 accounts -- and the only contact information exists on a spreadsheet he controls -- if he walks, he's leaving with a business asset worth $3.5 million.

We in marketing have certain stereotypes that we assign to sale people, and sorry to say this, if you are in sales, but please don't be too offended that we sometimes think of you as a bit whiny. Some examples:

  • "I don't want to record all my activity in the CRM, it takes too long."
  • "I don't record all my emails with customers in the CRM, a lot of that stuff is just personal."
  • "I don't want to attach everyone to the opportunity, it's too many names to manage."
  • "I'm your best sales person, I refuse to put up with all these database rules."

And perhaps, because they are seen as rainmakers, they are allowed to complain and avoid being subject to these good data practices and their bad behavior is tolerated.

Along time ago, I started my career with Global Sources, in Hong Kong. Our CEO, Merle Hinrichs, recognize the real value of sales data, and how critical security and precision were around this. All of the lead data, server-based at that time, was stored on a secure floor, and beyond that,  in a secure room. In seven years with the company, as a leader in data marketing practice, I was NEVER allowed in that room (and I doubt a salesperson was ever allowed on that floor). The business has grow exponentially over the last 25 years, and their incredible data has been at the core of it.

So, my brothers and sisters in marketing automation, those of you struggling with this issue, here are the only things that will solve this problem for you:

1) Sales commission is tied to good data practice - 10% of total bonus.

2) Sales people are required to complete every step of the sales process in Salesforce - if they don't, they don't get commission on the deal. No zero day closes where every deal is a cold call.

Bad data practices - super risky and potentially massively and negatively disruptive to your business - only continue as long as sales people are allowed to make excuses. Feel free to tweet this article - maybe someone upstairs will notice.

Marketing Operations B2B marketing and sales alignment Cost of dirty data data management Marketing and Sales Alignment

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