As a professional data buyer at Ekata, there are a number of things I look for when researching and evaluating a new data source for one of our products. The specifics may vary based on the type of product, data source, or use case, but there tend to be consistent characteristics I always want to see. Many of these traits are things I have learned over the years through countless conversations, evaluations, contract negotiations and integrations. If your business is looking into sourcing data through vendors, then there are a few things you need to know.
To share my experience and help guide you through the world of data buying, I’ve pull together seven tips for how to select the best vendor for your business.
- Choose Unique or Proprietary Data
When you start researching data vendors, you’ll soon discover that many of the vendors are selling similar services and products that all claim to solve your problem. While this may be true to a certain extent, you want to quickly identify which of them are doing something truly unique and differentiated. A lot of vendors are simply reselling data without any value-added services — skip them. Instead, keep sifting through the market to find a source that has a particular data offering. By sourcing a truly unique set of data, your business will gain a powerful advantage as you try to differentiate your product relative to the competition.
- Get the (Real) Story Behind the Vendor’s Data Sourcing
Any data buyer will tell you that their data will solve your problem. If you aren’t careful, it’s easy to get lost in their marketing jargon. To avoid this, be sure to start pressing vendors about how they source their data early on in your conversations. You don’t necessarily need to know their special sauce (they probably wouldn’t tell you anyway), but you have to understand if they are a viable vendor for you to work with based on their data-sourcing strategy.
Take this scenario for example: Vendor A tells you that all of their data comes from a series of contest entries, Web scraping and some other user-submitted data on marketing lists. Meanwhile, Vendor B tells you that all of their data comes from U.S. county housing records and is processed through the National Change of Address Service every month. Without a doubt, I start leaning towards Vendor B. Not only does their story seem stronger, they are also willing to be more specific, which is sign they’ll be a better partner in the long term.
- Stick Close to the Originating Source
Similar to my prior point, you need to position yourself as close as possible to the originating source of the data you’re interested in accessing. This will either be the data owner or in some cases, one of a few authorized resellers. The benefits of doing so are enormous:
- You get direct access and knowledge about how the data is sourced
- You take the data in without any third party changing it or merging it with other lower quality data sets
- You will have better pricing flexibility as there are no reseller markups
- Test the Accuracy of the Data
It goes without saying that you want accurate data—everyone does. The real question becomes how do you measure accuracy and likewise, how do potential vendors measure accuracy? Before you start evaluating data sources, you need to establish an internal definition of accuracy for the type of data you’re looking for, then determine how you will measure that accuracy. I would next ask your potential vendors how accurate their data is and how they measure it. It’s important to understand the vendor’s measurement process in the event that it differs from yours. If it does, there will likely be different results.
Vendors may also have tips for how to measure the accuracy of their data that you could incorporate into your testing. From there, run your evaluation and see how it compares. Be prepared that prospective vendors will likely want to do their own analysis for you, but at the end of the day, it’s the accuracy that you measure that is most important. You are the one putting your dollars, time and business on the line with this data. It’s critical that you’re happy with your own test.
- Establish Coverage Relative to Accuracy
On top of accuracy, you need to measure data coverage. These two qualities can sometimes be at odds (e.g., Vendor A may be willing to sacrifice accuracy to increase coverage), so it is important that you establish internally which of these qualities is of greater importance to your business. From there, you’ll know how to benchmark the data sources you’re reviewing.
- Review the Vendor’s Ease of Integration
While the U.S. consumer and business data market is constantly growing and evolving, it is actually quite a mature industry that dates back to the ‘70s and ‘80s. There are many benefits to buying in a more established market. The one negative result of America’s data market is that it’s not uncommon to find a vendor with great data that is unfortunately delivered over a legacy system.
Whether the data is delivered as an outdated API, a slow batch service, or flat file that only updates once every six months, the format in which it is delivered can have a big impact on your sourcing decision. You’re going to want the data in a fast and reliable manner, but that’s not going to be a slam dunk to find. Be sure to do your research and work with your engineering team to vet any prospective vendor’s data delivery mechanism and ensure it meets your requirements. If not, you could be in a world of hurt once that contract is signed.
- Leave Room for Alternative Use Cases
When approaching a new data vendor, you’re likely going to have a specific use case or two in mind for how you want to use their data. It might be a fairly standard use case, or maybe you’re breaking into new territory with their data. Either way, chances are you will want to use the data in a new way months or years into the relationship. Identify vendors who are open to alternative use cases for their data so your company has the ability to be innovative and entrepreneurial with the data you select. You may not get free reign with the data in the contract, but you should establish early on that your organization will be looking at different use cases for the data and make sure the vendor is onboard with growing alongside you. Some industries will be more difficult than others (e.g., legally regulated credit header data), but you should know the boundaries with which you have to operate and try to find a vendor that wants to work with you in order to get you the most out of the data you’re licensing.
From identifying the legitimacy of a provider’s data to the ease of data integration, the source of the data is incredibly important. Make sure to save this list of tips to help your business get strong, reliable data:
- Ask how the provider gets their data.
- Look for sources that have unique or proprietary data
- Seek out first-party data, not resellers
- Decide what accuracy means and ask how the vendor measures it
- Figure out how you value the tradeoff between coverage and accuracy
- Make sure the data delivery format is compatible with your systems
- Ask how flexible the data provider is in terms of modifying the data for new use cases
Good luck researching and choosing your data vendors, and cheers to an open-source and data-enriched Web!
Want to learn more about Ekata’s data solutions? Check out our data overview.