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If targeting consumers is tricky, spare a thought for those poor souls who sell their wares to other businesses. According to research carried out by Royal Mail and Dun & Bradstreet, with every passing minute, a company ceases trading, another changes its name, and another its chief executive.

So it's perhaps not surprising that, according to Royal Mail, in 2002, British businesses sent out 172 million items of mail to companies that had either ceased to trade or had moved location, at a total cost of £163 million. That's a lot of goneaways.

The most reliable way to keep a B2B list accurate is to revisit it frequently and check the details, but how frequent is frequent?

Experian's National Business Database covers 1.8 million UK businesses, and this will rise to around 2.2 million once the data from the company's summer acquisition of Yell Data is incorporated. Experian director of B2B marketing Richard Lloyd says of the Yellow Pages data: "If it has been 12 months since the last contact, we will endeavour to contact them again."

But Yell is just one of three sources feeding into the Experian database.

The second is Companies House data, where companies are required by law to inform on changes of address or director details within 30 days. The third is Thomson Directory data, which has an event-driven update cycle.

If any of the 30 or so companies using Thomson data gets a goneaway, it reports it back and the change is noted. "It means the most volatile parts of the data are updated most frequently," says Lloyd.

Over and above these "on-the-fly" updates, the entire Thomson data is updated on a two-yearly cycle, according to Steve Cook, commercial director at Wegener Business Data Solutions, which uses Thomson data as part of its PrimeFile + business database. Wegener reformats the Thomson data for use in a direct marketing database, then adds it to its own file of the UK's top 300,000 companies with more than 10 employees.

"Below 10 employees, if you know where it is and who the top man is, that's probably enough," says Cook. "Any bigger and you need more information on personnel and decision-makers. That's why we concentrate our efforts on this group."

Big is best

Data company Conduit concentrates on just the top 150,000 UK companies by turnover at head office level. Its list is updated every 12 months, the top 20,000 companies every four months.

Conduit managing director Mike Gray points out that, even with such a small list focused on the companies with the highest revenues, those at the bottom end of it are turning over only around £200,000 a year. "Buyers should not be dazzled by volume," he says. "You can have more volume, sure, but you will be talking to companies who don't have much buying power."

But it would be foolish just to ignore SMEs, says Simon Lawrence, joint managing director at B2B data consultancy Information Arts. "SMEs are an amazingly important segment for UK industry, representing something like 36 per cent of UK turnover," he says.

Information Arts' Business DNA database, developed over the past two years, is a hybrid list that mixes information on 1.6 million SMEs and small office/home office businesses with consumer data on four million of their directors and owners.

The database allows the business to be referenced from the individual and vice versa, so that directors' names can be appended with demographic information like a consumer database.

According to Lawrence, by understanding more about the directors as consumers, companies will be in a better position to understand them as business people.

"We wanted to understand decision-making in small businesses, because Standard Industry Classification codes are not always useful," he adds. "With smaller businesses, there is a direct relationship between the directors and owners and what they do as consumers."

It's clear, then, that serious efforts are being made in some quarters to deliver good quality business lists. And yet there is a consensus in the DM business that business lists are often not all they could be. Take-up of the DMA's Business List Audit Scheme has been slow, with only four companies, Conduit, Mardev, Developing Data and the REaD Group, accredited so far.

"People don't want to spend the money to do it," comments Conduit's Mike Gray. "The industry has to increase expectation that list owners should be undertaking this type of audit."

Chris Grey, managing director of TRG Strata, part of the REaD Group, which runs the Business Suppression File and the Business IQ database of 2.6 million records, believes some clients are more concerned with list size, rather than quality.

"People look for volume because that's what results have always been based on," he says. "Two per cent of a big number is more than two per cent of a small number. It takes a brave client to say they are going to look at a list, clean it and mail smaller numbers, but that's how they get a better return."

Lawrence questions whether the DMA scheme is achieving what it set out to do. "It's an audit of process, not of quality," he says. "The scheme does not make representations as to data quality. It audits the process not the data. It is not addressing the underlying issues. It has to target the analysis, insight and then the selection of appropriate lists."

With or without DMA-accredited lists, firms can't ignore the problem, says Richard Roche, head of business development at Royal Mail.

"With the number of changes affecting business data, it is more difficult to keep databases up to date," he says. "But if it's important for your business to know where your customers and prospects are, you have to try harder to get to them, and ensure you keep on top of the data."

At Mardev, the B2B list division of the Reed Group, which markets highly targeted lists based on Reed's controlled circulation magazine subscriber lists, head of list management Richard Gibson makes a clear case for investing in quality.

"There's no point trying to compete on price because someone will always sell it cheaper," he says. "If you sell on quality you have a chance."

With anecdotal evidence suggesting that some practitioners are renting lists at anything as low as £25 per 1,000, compared to the norm of around £110 per 1,000, these seem wise words.

THINGS TO ASK WHEN BUYING B2B DATA

1. What is the source of the data?

2. How is the data maintained? Telephone research is the most accurate method of validating records on a database. Look too, for 'on-the-fly' updating with respect to goneaways and other changes that are fed back to the data owner.

3. How frequently is the data validated and updated? Experian suggests that in 33 per cent of businesses one of the main contact points - address, phone number or key contact - will change every year. So look for a list that is updated yearly at the very least.

4. If the database uses Thomson data, is it reformatted in any way to make it more suitable for direct marketing use?

5. What guarantees are there on returns? If an organisation does not say that returns are refunded, downgrade its scorecard. Look for money back on any returns without having to breach a predefined threshold of, say, five per cent.

6. Don't be blinded by volume. Ask yourself whether the list is fit for what you want to achieve. Apply some common sense. If a list owner says it makes a million phone calls a year to validate the list, but only employs 10 people, ask how this is achieved.

CASE STUDY: BUSINESS LOCATOR

In 2000, UK consumer data supplier Data Locator created Business Locator, a business database built by collecting data over the telephone.

A large team collects around 35,000 new records each month, gathering in-depth data on SMEs throughout the UK.

Respondents are asked a variety of questions. These include: Do they use recruitment consultants? Would they consider switching electricity supplier? How happy are they with their current bank? Do they have air conditioning? When is the business insurance due for renewal? What network are the company's mobile phones on?

In addition, clients who wish to do so can specify a question or questions they would like asked. In return for their sponsorship of the question, they get exclusive access to the answers. In all, each company's record has around 70 data fields.

In addition to the team collecting the data, another team updates the existing records. These now number 750,000 decision-makers in 280,000 UK businesses.

"We realised very quickly that the ability to offer a business database that was truly flexible, where clients could add their own questions and get data back weekly, or even daily, if required, would be very appealing," says Business Locator managing director Jo Smith.