Radius: Data Decay Rates

While there is a commonly cited statistic about contact data decaying at a 2.1% rate per month, the nature of this decay has been less reported.  Predictive Analytics company Radius conducted a study of 10,000 businesses and assessed the rate of decay over three months.  Data quality was assessed by external vendors in May and August 2016.  The Move or Unreachable value of 27% is similar to the often cited annual decay rate of 25% for contacts.

Radius published only three month decay rates, but I annualized the data using a four-period compounding formula.

Radius three-month data decay rates with imputed annual rates calculated by GZ Consulting.
Radius three-month data decay rates with imputed annual rates calculated by GZ Consulting.

One statistic that I did not annualize is the “Emails become Invalid” rate.  If 7.6% of contacts are not reachable after three months, then why are only 2.5% of emails becoming invalid?  There are several reasons:  First, approximately 8% of companies set their mail servers to not send bounce messages (or 0.6% of the three-month spread).  Secondly, most companies do not immediately turn off email messages when a person leaves the firm.  They generally forward the emails for a period of time to an administrative assistant or the individual who has assumed the departed person’s role.  This tends to be a temporary situation, but it explains the 5% gap between the two rates.  As one would expect companies to eventually decommission old emails, the annual rate of emails becoming valid should be closer to 25% than the non-displayed CAGR rate of 9.7%.

Radius is looking to address the decay problem in its database via leveraging their clients’ second-party data to obtain network effects for augmenting and updating their file.  Customers opt into the network with their data immediately anonymized and aggregated, “providing additional points of validation and verification.”  Customer contributions now cover 70% of the businesses in Radius’ Business Graph spanning one billion interactions.

Zoominfo has employed a similar model over the past few years for building out their contact file.  Their Community network has lifted their coverage of active US B2B contacts to 80 million.

Radius claims that the network improves the accuracy, comprehensiveness, and freshness of their data.  For example, phone connect rates improve from 84% to 93% when there are at least five data validation points.  Likewise, physical address accuracy improves from 85% to 96% when there are at least five validation points.

The comprehensiveness of firmographic data also improves with additional members.  Without the customer network, only 64% of records had full firmographic or contact attributes.  The population of comprehensive records rises to 81% with fifty network members.

Finally, Radius claims it’s network is “up to 20 times faster” at updating the Business Graph “than with traditional, manual methods of data collection and validation.”

“Network effects have long been a driver of business value and innovation across many industries, particularly for B2C companies,” said Radius CEO Darian Shirazi. “At Radius we are pushing the envelope on what B2B companies can come to expect from data. Now, leveraging customer network effects opens the door to further transform B2B data and develop new marketing innovations. By tapping into our predictive expertise and already robust data set, customer network effects can help marketers make smarter, faster decisions that drive revenue and growth.”

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