It is no secret that data is an important commodity traded among businesses and organizations just like any other asset.
On-site or third-party data analysts can bring incredible value to the company by looking at the data that is relevant to its business purposes.
Thus, no wonder you are also looking to buy high-quality data. Buying data, however, comes with its own set of challenges that come along with its undeniable benefits. This is exactly what we are going to cover here.
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What kind of data is beneficial for business purposes?
Let us start with the perks of buying data as opposed to using only what you can gather yourself. The first one that should naturally come to everyone’s mind is that most firms cannot collect all the data they need.
There are various types of data that can advance business goals. Here are some of the general categories.
- Historical market trends data
- Job market information, including data on the labour market, talent pool demographics, psychographics, and all other information pertaining to employment.
- Customer behaviour data. Especially the behaviour of clients that are shopping for products and services provided by the industry that your firm represents.
- B2B data, including firmographics, technographic, and intent data.
Other data types are, of course, also traded in order to achieve business benefits. This data is traded in data marketplaces or bought directly from customers, as is the case when monitoring is authorized by the customer in exchange for discounts and special offers. Of course, buying data directly from third-party data providers is also a common practice.
The perks of buying data
Information help firms in multiple ways. It allows for conducting market analysis, provides insights for conversion rate optimization, and enables spying on competition, among other things.
In addition, buying data enables companies to have enough information to successfully apply automated procedures. One of the most important examples of that is employing machine learning techniques to understand customers better and faster than the competition. Algorithms can arrive at crucial insights through data analysis, but they need plenty of data points to achieve it.
Buying data from professional data providers also increases efficiency and often reduces costs. Collecting information can be very time-consuming, especially for small to mid-sized businesses. The time resources used up for data collection translate into business costs that might rise far above what one would pay to a reliable provider.
Furthermore, the results of data collection might be disappointing if the tools used are not the best. Without the experts at hand who know the right tools and techniques, the true value of collected data is uncertain. Buying data from third-party sources removes all these worries and allows the firm to concentrate on what it does best.
The pitfalls to avoid
Like any other process, buying data also has some challenges associated with it. Firstly, one might encounter unreasonable pricing.
Ever since the beginning of the productization of data, evaluating data products correctly has been notoriously challenging. Since the true economic value of particular data sets is hard to determine, some data vendors might spike their prices just to be sure that any error in valuation is beneficial to them. It may take a lot of time to realize that particular data sets were overpriced.
There are also a lot of laws and regulations associated with the collection of data. On the one hand, it makes buying data advantageous, as you do not need to dedicate legal resources to navigating this regulation. On the other hand, the possible pitfall is once more that of unethical data vendors that might collect information in illegal ways.
If your data provider resorts to breaking laws, chances are that they are also not very good at their job. The data sets they will provide will be low-quality and they are unlikely to be able to offer any guidance in analyzing them. Thus, you would be running high legal and reputational risks for seriously deficient data products.
Mitigating the risks
Avoiding these pitfalls of buying data starts with finding a truly trustworthy data provider. Thus, look for providers that have a good reputation and trade openly in common data marketplaces. Avoid scammy-looking sites that you find at the bottom of search engine results 10th page.
When in doubt, check well-established review sites, such as Trustpilot. Additionally, contacting the vendor directly will reveal how fast their customer support works and how well they seem to know their job.
With a trusted provider, the business benefits of buying data are sure to come your way.