Is Data Money? If So, How Can You Spend It?
Money is unreal; currency represents money.
We’re accustomed to the concept that information is power. But is it also currency that can increase or decrease in value? Information or data can certainly be worth money. People and companies will pay for data they consider valuable. When you purchase a mailing list or a ‘how to’ book or pay to attend a conference or a webinar, you’re buying information but the idea that “data is currency” goes deeper than just handing over money for information.
In “Data as the New Currency,” Edgars et al note two key ideas about data and currency.
- Currency is anything that can serve as a medium of exchange.
- Data appreciates in value when translated into meaningful information.
Data as Currency in The Channel
End customer data is a form of currency that is exchanged between the channel partner and the manufacturer. In exchange for the privilege of selling the manufacturer’s goods and being an approved resale partner, one of the ways a channel partner pays the manufacturer is in information. Customer information. The sharing of this data becomes an economy where information is the currency.
Channel partners know their customers’ identities, where they use their products, what vertical industry segments they operate in, what products and services they buy, how much they pay for their purchases and a host of other details that create a customer’s DNA.
Manufacturers know the potential value of that point-of-sale (POS) data, and want access to it in order to make strategic business decisions. As bits and bytes of information it has little value; apply analytics to that data and it becomes gold.
Maximizing the Value of Data Currency
The trick to maximizing its value is to first transform the data in to consumable information for business leaders and then apply it to as many business problems as possible. Many manufacturers collect and house this data with the intent to use it for data driven decisions but lack the ability to transform it in to consumable, easy to decipher an easy to comprehend metrics.
That’s why an increasing number of manufacturers and vendors are outsourcing these tasks to third-party data services like Channelinsight. Our manufacturer customers are using their newly transformed data in ways that are translating directly in to money. There are two main methods of translating this data in to money; either by saving on costs or generating new income.
Decreasing incentive overpayments is just one example of savings that Channelinsight customers realize from managing their channel data. Research has shown that many manufacturers often overpay their partners for incentive programs simply due to inaccurate record keeping. They are often late to pay their partners incentive monies earned because of slow, manual processes. Having accurate, timely channel data solves both these problems. Manufacturers save money by avoiding overpayments, and gain partner loyalty (another form of currency) by making earned payments on time.
An example of increased revenues that result from channel data management can be found when investing marketing funds in the right partners, the right geographies and the right resellers. One of Channelinsight’s component manufacturers redirected marketing and incentive overpayments based on insights gained from our patented data management processes and realized a revenue increase from $5B to $7B.
The ways our customers are translating data into savings or revenue is endless; increased sales or decreased costs. It’s all money in the bank.
Are you using data as currency within your partner program? Are you increasing the value of that currency? If so, how? We’d like to hear about it.
EGGERS, WILLIAM D., ROB HAMILL, and ABED ALI. “Data as the new currency.” (2012).