In this blog I’m going to look at one of the issues that many firms face when it comes to managing their data. Is there value in using external sources to help manage the quality of data?The simple answer is, it depends. Many firms have used external data sources but without necessarily having a clear plan as to what that data was going to be for.Take segmentation for example. A lot of CRM systems are populated with information about company size, sector, staff numbers, market capitalisation etc. but the reality is that very few marketing lists or business development initiatives use that data. Lists can re-cycled they don’t very often get constructed based on careful segmentation and targeting.
Most firms have access to external data through their library/ information services and it’s almost certainly the case that this data is also used as part of New Business Intake. However what’s the value of that data when it comes to Marketing and Business Development?
The diagram illustrates how I look at the data that firms need and how they should consider managing that data.
The way I look at data is as follows. Firstly, how important is a piece of information when it comes to marketing and business development? Secondly how unique is that information to you as a firm?
If a piece of information is important then, of course, it should be maintained. Evaluating this is not necessarily as straight forward as it sounds. Many CRM systems are littered with data that is never used, created off the back of an initiative that never took off. I would advocate analysing the data that you have in your CRM system to determine if it really is useful. And get rid of anything that doesn’t stand up to examination.
However let’s assume we’ve been able to establish the fact that a piece of data is important. For me, the second question is probably more relevant. How unique is a piece of information to you? Many firms create whole new processes for defining industry sectors when there are perfectly good systems in place for managing this already.
Of course, some will argue that SIC, for example, doesn’t go down to the level of granularity that is needed, especially for new tech industries. I agree. However does anyone really segment their target list at 6 digit SIC code level?
Of course some segmentation systems are better than others. And that’s also true of data providers. Or rather different providers are good at different things. That’s why understanding exactly what the information is going to be used for is so important.
For me, the most critical thing that an external data source provides, is the ability to have a single version of the truth when it comes to company entities. Firms struggle all the time with trying to marry the differences that exist between the way the time and billing system sees the world and the way BD and Marketing look at things.
Whilst an external data source, may not be perfect, by having an external reference number such as a DUNS number or a BVD ID, you at least have a version of the truth that everyone buys in to.
I’m personally less convinced about the additional value that taking “tear-sheet” or “taxi reports” gives you in BD and Marketing. They’re essential if you’re carrying out risk assessment and anti-money laundering, but are, quite frankly, overkill when it comes to marketing segmentation.
So in conclusion, external data sources can contribute significantly to a good data management plan.
The key is to understand the overall requirements and to really focus your effort on the data that is unique to you as a firm. For example, the relationship you have with clients, referral sources, meeting notes and client feedback.
At a time when data management resources are stretched to capacity and at the same time firms are finally waking up to the potential value of the information asset that they have in their CRM systems, information managers have to look for ways of automating data management so that they can focus their effort on generating reports and adding real value to the business development and marketing process.