ROI Topic: Data is a Commodity Now
Until recently, if anyone asked me questions about pricing in the data industry, I would have said that quality was more important. However, over the last 15 years, global databases have distributed throughout the industry to all the major providers such that everyone has virtually the same standard b2b data now. There may be differences when it comes to specialty data such as technology installed base lists, international data and niche data.
Since everyone has the same data, the quality tends to be the same as well. However, most data vendors do not share accurate results to create proper customer expectations. As a result, it is common for customers to complain that they had bad data in the past and have concerns for any data in the future.
Almost all data providers now offer quality guarantees. You may often hear 80% or 90% guarantees. But it is not that simple. All key data fields have varying levels of accuracy. When someone says 80% or 90% they usually refer to the email addresses. The reality is that it may only be 705 to 80% and so when a customer does email campaigns, they may be upset and disappointed with results.
Whether or not the data providers disclose this, here is the reality of industry averages. If they say otherwise they are either being dishonest or simply providing higher levels of replacement records:
- 80% email deliverability
- 95% postal fields
- 75% for SIC/Industry, revenues and employee size
- 60% for job titles and phone
Often times the disappointment in results comes from the last two. If companies are not in the target market you requested, results will degrade. If you cannot reach the correct job titles for those you wish to contact, the results will be less. If anyone disputes this information, they can simply do a quick calculation on a 25 million record global database and determine how many resources and how long it would take to keep phone numbers up to date more than once a year or two. Further, even for the job titles, industry perceived leader in accurate profiles LinkedIn only has 60% accuracy for job titles and verification the person still works at that company. This is a very difficult problem to deal with.
So what does this mean for a customer, can you not get results? Well, first, it means you need larger lists than you may have been using in the past in order to get similar past results. Secondly, be sure you have scrutinized the data samples for your target market to determine they are suitable. Finally, make sure you do not overpay for your data.
This brings me to the main topic of this discussion: pricing. Any major data provider that has a well-known brand name and/or a very large data team and other personnel will charge significantly more for similar data. It is just common sense because they don’t want to be the market price leader and also because they have higher costs to pay for. So what should a customer do?
Buy from a broker. I never would have said this 5 years ago because the data accuracy and data selection was not the same for most everyone. There were distinct differences. But now that has all changed. Only a data broker with few resources can deliver the best pricing because they buy in volume and take small margins and have much lower costs due to fewer resources.
The industry averages for per record/per name data are as follows, based on quantity and type of list criteria:
- Standard b2b data - $1 to $ .10 (quantities under 2k to 100k)
- Maybe to $ .05 range for millions
- Technology install base data - $2-3 to $ .25 (quantities under 2k to 50k)
- Maybe to $.20 in larger quantities
- Minimum order policies - $500 to $5,500 (regardless of quantity and type of list
So, if you order through a broker who provides similar guarantees as listed above, you can save 50% or more of the cost of your data. That allows you to buy more data to impact the results you hope for in spite of lower accuracy rates than you hope for. Yes, what this means is that data is now a commodity.
So that means the criteria for purchasing data has shifted. As I see it, the following are the most important criteria:
- Relationship with the vendor
- Realistic quality guarantees
- Selection and target market validation
About ROI Outsourcing LLC
ROI is a data services and telemarketing provider with numerous global data sources and offices in the US and India. Collectively ROI has 55 years of experience in marketing, sales, management and business development, 15 years marketing data services, and 12 years previously marketing our own email marketing solution. Please visit our web site at http://www.roioutsourcing.com or call us at +1-678-745-8385.