The New Parents Database Example
Lets start our example with a database of new parents who have all signed up to receive highly discounted offers. Most parents will have been there right? All the key companies want to attract new parents, because if the product is right they can be incredibly loyal. As a new parent it means there are some awesome offers out there to temp your loyalty.
So now let's look at how much a database of parents might be worth. Well to be honest in its raw form, not that much, pennies or less. If an advertising campaign wants to reach a few hundred thousand parents it is not that hard and relatively cheap, using everything from adverts to social media campaigns. We are all increasingly immune to spam and advertising, in fact it is often a damaging turnoff. So marketing to 1 million un-targeted people might even have negative consequences let alone low value.
How Data Enrichment Transforms Value
So how does enriching that data change its value? Whilst scattergun mass marketing might be cheap, it is not so effective. Now by comparison let's look at the value to a local nursery of marketing available places to new parents in a 3 mile radius, by comparison it is extremely high, easily pounds / dollars per parent.
Most new parents know that finding a nursery is very hard work and waiting lists are six months plus, so having a good nursery find you at an otherwise stressful time, really has its appeal. With 1 million new births a year in the UK, that database which was worth barely anything just became worth millions per month, as long as we also have a corresponding database of nurseries and we have categorised our parents including the ability to geo-distance.
Permission-Based Marketing
In all of this there is one other key piece of enrichment that really matters. That is finding parents who have signed up with very specific permissions to market. We may not want to receive spam, but if we are looking for a new nursery for our six month old, then yes please send me what you have, and once I have found what I need, please take me off your list.
A good market matches buyers with sellers and avoids wasting either party's' time. That is possible with highly targeted data enrichment. Not only does data enrichment add value but it also avoids a lot of wasted effort on all sides.
The Data Industry Opportunity
In a future article I will hopefully find time to talk more about some of the technical techniques used to extract data, but before getting there I wanted to discuss the most valuable part of the process, which is the enrichment and interpretation of data.
Currently the copper industry is worth hundreds of billions per year, but the data industry is worth significantly more. Raw copper ore containing rock can be found all over the planet, but it is the refinement that turns it into a saleable commodity. The equivalent process exists in the data industry.
The big difference is that with the right data and the right sector knowledge, enriching data is far more achievable to the average entrepreneur than going into the mineral mining business. If you are an entrepreneur trading in data then key to increasing revenue is finding the right data, collecting it correctly, enriching it and then matching it with the right customers.
Key Takeaways:
- Data Collection vs. Enrichment: While gathering data is essential, the real competitive edge comes from enriching that data to derive valuable insights.
- Targeted Marketing: By adding layers such as geo-distance and explicit marketing permissions, raw data becomes highly targeted and significantly more valuable.
- Actionable Intelligence: Enriched data transforms into a powerful tool for targeted advertising and personalized customer engagement.
- Entrepreneurial Opportunity: Leveraging data enrichment techniques offers entrepreneurs a more accessible and profitable avenue compared to traditional industries.
- Business Value: Just as refining raw materials creates high-value products, enriching data can elevate its worth and drive substantial revenue.