Despite providers’ best efforts, small business data doesn’t stay fresh for very long. Studies indicate that small business data decays as much as 22% every year.
Data decay is the gradual loss in data accuracy, coverage, and reliability. It’s simply the idea that even the best quality data will deteriorate over time.
Data decay can happen when hardware or software is damaged, but it also happens naturally as entities change and the information on record becomes outdated.
For lenders and other small business service providers, this lack of reliable, fresh small business data creates problems for every department, from marketing to compliance. Data decay not only compromises your growth potential, but also creates an environment where risk can flourish.
Data decay affects critical functions across your organization — and ultimately impacts your bottom line.
Marketing vs Data Decay
If your marketing efforts run on poor quality data, it’s impossible for your message to connect with the right audiences at the right time.
Data decay results in wasted resources on outbound messaging that doesn’t get delivered, chronically low response rates, and an inability to optimize your campaigns. With deteriorated data, you could miss out on a company’s recent layoff events that would signal that this business is not a good prospect and use of marketing spend.
In marketing, it’s easy to see the garbage in, garbage out rule in action. Decayed data means reduced marketing ROI.
Customer Onboarding vs Data Decay
Small business data decay can lead to unnecessary challenges, and even added risk, during SMB customer verification and onboarding.
Data decay might prevent you from learning about a credit applicant’s new risk factors like a recently- expired professional license or at the very least, it might require manual information gathering, that slows onboarding and negatively impacts customer experience.
Being confident in the quality of your data ensures you can streamline onboarding, improve customer experience, and reduce risk.
Risk Monitoring vs Data Decay
Your risk and compliance teams want to see new issues as they arise - not months later. The only way to achieve this type of monitoring is with fresh, reliable data.
Outdated or unreliable data creates an incomplete picture of risk. With decaying data, you’ll miss out on time-sensitive risk signals - like bankruptcy alerts and business closures - that enable you to proactively identify and respond to at-risk businesses.
In that way, decaying data is a liability.
Data decay means wasted resources, compromised customer experiences, and elevated risk. This is precisely why Enigma prioritizes freshness and accuracy in our small business data. Our data refreshes regularly (up to bi-weekly) to ensure we’re providing accurate insights about every small business.
If you are curious to learn more about Enigma’s small business data, please reach out for a demo.