Many B2B data providers claim to have the “best” data, but have you ever stopped to think about where these companies get their data and what makes it better than the rest?
Data is a big investment – and as a buyer, you should never trust a data provider without first understanding where their data comes from. Today, we look at three major data sources and discuss the pros and cons of working with each.
Types of data sold by B2B data providers:
Type #1: Owned B2B Data Providers
Owned data is sourced from a vendor’s daily business processes or through proprietary data-gathering technology. An example of owned data is an organization who sells their opt-in membership list.
Accuracy- Generally speaking, the closer a vendor is to the data source — the more accurate the data will be. Here’s why: data owners are responsible for de-duping, tagging, filtering, verifying, and updating their data. Think about it: If a vendor did nothing to maintain the accuracy of their data, they would have very few customers.
Familiarity- Vendors who sell their own data should be familiar with every aspect of their information-gathering and verification processes. If you have questions or concerns, ask. The vendor should be able and willing to provide specifics.
Superior Service- Typically it is easier to resolve data issues when you work with a provider who sources their own information. Not only do they have the incentive to fix issues quickly, but they also have unrestricted access to the collection and verification process, making issues less time consuming to resolve.
Data Hygiene- One possible downside of working with a vendor who sells their own data, is that many don’t have ways to verify or update their database. Consider these statistics:
- 30% of people change jobs annually (source)
- 76 people change jobs every minute (source)
- 43% of people’s phone numbers change annually (source)
- 20% of all postal addresses change every year (source)
- 37% of email addresses change annually (source)
Data decay is unavoidable. When comparing data providers, be sure to ask if they verify their data against multiple independent sources. Bonus points if a vendor allows individuals or companies to easily update their own data—a feature that drives superior data accuracy.
Type #2: Brokers & Resellers of B2B Data
These are middlemen between the buyer and the original data source. Brokers and resellers will typically purchase their data from one or multiple originators, and then re-sell said information to their customers. The majority of B2B contact providers fall under this category.
Useful Tools- Many brokers and resellers offer value-added services for clients, including special tools for uploading and managing data, and dedicated account managers. Keep in mind that part of your purchase price covers these services, whether or not you need them.
Niche Markets- Many times, brokers and resellers will focus on niche markets, making them better equipped to provide your organization with contacts most relevant to your business goals.
Distance- A major disadvantage of working with data brokers and resellers is their lack of familiarity with the data. They may not know how often their list sources update or verify information, if at all.
Accuracy- Data accuracy may be questionable because the broker has no accountability for the data quality.
Cost-These vendors will often markup list costs to drive their profits. So the same data you’d buy from an owner for $1,000 may cost you $2,000 via a broker or reseller.
Type #3: B2B Data Aggregators
Data aggregators will gather information from multiple different sources – both paid and organic. These sources include directories, websites, and other public and private sources.
Volume- Vendors who aggregate data, offer more volume than other types of vendors because they’re constantly adding new information.
Breadth- In the same respect, compilers will often have a lot of information regarding one individual or company, because they source from so many different places.
Inaccuracy- The biggest benefit of buying data from an aggregator is also this biggest drawback. Having tons of data is great, but often aggregators have more duplicate or conflicting records as a result of using multiple sources.
Standardization- Information obtained from multiple data owners (each fielding, tagging and displaying information differently) is not standardized, making it difficult, if not impossible, to successfully import data into your CRM system.
Limitations- Aggregators are often severely restricted in what they’re allowed to sell. For example, although a particular piece of information may be included in the data set you receive, such as company size, the compiler may not have the rights to provide that data as an individual select. Data owners and resellers — from whom aggregators get their data — protect their own list business by limiting the ways in which other vendors are able to slice and dice their data.
Cost- Like brokers and resellers, aggregators often pay for some (or all) of the data they provide. That means they may have minimum purchase requirements, and are generally less flexible in their ability to negotiate pricing.
Data is the key to B2B sales and marketing success. But, when data isn’t good, your investment becomes a costly mistake. Before making a purchase, understand how each vendor gets their data and how they verify its accuracy.