Data Decay

Data decay describes the deterioration of data accuracy, reliability, or coverage over time. The process can result from damaged hardware of software, but the focus of this article is the data decay that is associated with business information. Data decay, thus, describes the process of data becoming obsolete over time. 

Understanding data decay

In this context, decay commonly occurs when customer records associated with B2B sales, marketing, and CRM are not maintained. A prospective client list, for example, may fail to reflect the fact that an individual has been promoted or accepted a new role at a different company. 

Data decay can also result from human error when information is entered into a system. When one considers that the average company makes 12 copies of its data, one simple mistake can compound and become a severe problem.

Consumers are also subject to the phenomenon. Most can relate to receiving a letter in their mailbox addressed to someone else, while others have experienced the frustration of visiting a retail store and discovering that the business has moved to another location.

How can data decay be avoided?

Data decay cannot be avoided entirely because of the sheer amount of data businesses rely on and the frequency with which it updates. Research conducted by Dun & Bradstreet and The Sales and Marketing Institute International (SMI) found that every 30 minutes:

  • 75 phone numbers change.
  • 120 business addresses change.
  • 20 CEOs leave their roles, and
  • 30 new businesses are formed.

With the above stats in mind, below is a look at some data decay avoidance strategies:

  1. Engage with the target audience – to ensure that contact information is up-to-date, marketing teams must consistently and tactfully engage with their target audience. Lead magnets that are relevant and add value increase the likelihood that a prospect will continue to interact with a brand even after their details change.
  2. Ask consumers directly – there are various ways for a business to politely remind its customers to update their contact information. Calls to action that emphasize “completing a profile” or “customizing an account” work best.
  3. Establish a data hygiene action plan – data hygiene involves addressing data that is either incomplete, incorrect, irrelevant, or inaccurate. This may be something as simple as double opt-in email verification or the validation of postal addresses before a campaign is initiated. Data hygiene can also be increased by automating manual processes that are prone to human error.
  4. Use third-party data – for those unwilling or unable to commit to the strategies listed above, some companies sell verified or validated third-party data. One such company, Data Axle, employs over 300 data technicians that make 60,000 calls per day to minimize the effects of data decay.

Key takeaways:

  • Data decay describes the process of data becoming obsolete over time. It commonly occurs when customer records associated with B2B sales, marketing, and CRM are not maintained. However, it is also present in certain B2C contexts.
  • Data decay cannot be avoided entirely because of the sheer amount of data businesses rely on and the frequency with which it updates. With the average company making 12 copies of its data, a single mistake can become a significant problem very quickly.
  • Avoiding data decay completely is not possible, but there are various ways a business can reduce its prevalence. These include establishing a data hygiene plan, purchasing third-party data, regularly engaging with the target audience, and asking customers to update their details directly.

Read Next: Break-Bulk, Cross-DockingSupply ChainAI Supply ChainMetaverse Supply ChainCostco Business Model.

Connected Business Concepts

Revenue Modeling

Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

Dynamic Pricing


Price Sensitivity

Price sensitivity can be explained using the price elasticity of demand, a concept in economics that measures the variation in product demand as the price of the product itself varies. In consumer behavior, price sensitivity describes and measures fluctuations in product demand as the price of that product changes.

Price Ceiling

A price ceiling is a price control or limit on how high a price can be charged for a product, service, or commodity. Price ceilings are limits imposed on the price of a product, service, or commodity to protect consumers from prohibitively expensive items. These limits are usually imposed by the government but can also be set in the resale price maintenance (RPM) agreement between a product manufacturer and its distributors. 

Price Elasticity

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It can be described as elastic, where consumers are responsive to price changes, or inelastic, where consumers are less responsive to price changes. Price elasticity, therefore, is a measure of how consumers react to the price of products and services.

Economies of Scale

In Economics, Economies of Scale is a theory for which, as companies grow, they gain cost advantages. More precisely, companies manage to benefit from these cost advantages as they grow, due to increased efficiency in production. Thus, as companies scale and increase production, a subsequent decrease in the costs associated with it will help the organization scale further.

Diseconomies of Scale

In Economics, a Diseconomy of Scale happens when a company has grown so large that its costs per unit will start to increase. Thus, losing the benefits of scale. That can happen due to several factors arising as a company scales. From coordination issues to management inefficiencies and lack of proper communication flows.

Network Effects

network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.

Negative Network Effects

In a negative network effect as the network grows in usage or scale, the value of the platform might shrink. In platform business models network effects help the platform become more valuable for the next user joining. In negative network effects (congestion or pollution) reduce the value of the platform for the next user joining. 

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