Some ad agency CEOs would rather not spend money on a new business prospecting database. So it’s not surprising that the decision to do so (or not) often comes down to a choice: spend money on an external resource or use an internally-developed and maintained database.
Before making this decision, though, it’s important to consider the health of your internal database. Why? Two reasons:
- You might be spending more money building and maintaining it than it would cost you to subscribe to a superior product; or,
- You might not be spending enough money on it.
In the first case, choosing an external resource may make good business sense. In the latter, if you aren’t spending enough, you’ll likely be giving your new business team a resource that’s old and out-of-date. They’ll have to spend their time cleaning it, rather than generating new business.
Here are some questions to ask and answer in order to evaluate your internal database:
- How many companies do you have in it? Are they the right companies, in the right industries for your agency?
- How many of the right contacts do you have at each one? What’s the average number per company?
- What titles do you have? Are they the right titles for your agency? If not, which ones do you need?
- What contact information do you want to have at each one (e.g. email, direct dial, proper title, assistant name, etc.) How many of your contacts have that depth of information?
- When was the last time you sent an email to everyone in your database? What was the bounce rate? Was it greater than 5-10%?
- When was the last time each contact name was telephone-verified for accuracy? How many of the contacts were gone? Was a replacement contact found?
- How much do you pay (including salaries and benefits, IT costs, software licenses, etc.) to maintain your database?
- What other information do you like to have to assist you in your new business prospecting efforts?
- What services do you subscribe to in order to gain access to this additional information? How much do you pay for these services?
Finally, after you have all this information at your fingertips:
- What’s the total annual cost of maintaining your internal database?
- How happy are you when you weigh the accuracy and depth of information of your internal database in relation to what it costs you to have it?
Lastly, be cautious if you hear the argument (internally) that, “We have a really large database that we’ve built up over many years; therefore, we should use it.”
The size of a good prospecting database has no correlation to anything. It’s all about having the right companies and the right contacts and contact information.
If you’re like most agency principals, you’ll be surprised at what you learn. If you have questions when you’re pulling this information together, don’t hesitate to get in touch.
