The following post if part of a five part series detailing how to successfully bring a data product to market. To learn more, download the free “Visionary Leader’s Guide to Data Monetization.”
Direct Sales vs. Chanel Approach:
Direct:
If the primary consumers of a data product are easy to define, segment and access, then vendors may find it useful to employ a direct sales force. This is especially true if data sales are a primary component of the vendor’s business model.
Twitter, for example, trades in social media data and the flow of high-paying customers thirsting for the Twitter Firehose
is seemingly endless at present. In this situation, the high value of each Twitter transaction properly justifies a deep, and expensive, sales force.
Indirect:
In most cases however, vendors find it difficult to justify employing or building a direct sales force for data products, since selling data may still be far from their ‘core capabilities’. For this reason, indirect channel partners, such as a data marketplace, are better suited to build awareness, extend the sales reach, expedite transactions and quickly scale up. The marketplace also lets vendors test new products and offerings quickly, without a large institutional investment.
Placing data products on a marketplace also allows vendors to reach new geographies and buyers in other industries who might not have previously expressed a need for the data. With a data marketplace, decision makers worldwide have access to robust data sets necessary for enhanced causation modelling and assigning prescriptive actions.
Trade-offs:
The primary trade-offs in working with an indirect channel partner is that the partner typically takes a modest commission to fund infrastructure, marketing, business development and transaction processing. At the same time, customers typically only have a direct relationship with the partner.
Marketing & Sales Considerations:
When attempting to sell data, Data Vendors will want to properly communicate information around three main aspects:
- Usefulness
- Technical specifics
- Usage/legal rights
Providing ample explanation and communication on each of these aspects should adequately address all potential questions that potential buyers have. This will help alleviate any confusion and streamline the sales process.
Highlight specific useful & unique qualities
Buyers of any product need to understand what they are buying and how the product will provide value to their lives. Compelling listings that effectively address buyers questions sell effectively. This is true for both physical products as well as information/data products.
In this respect, data vendors need to make sure that they use engaging and descriptive language that will highlight specific and useful qualities. Buyers might not immediately understand how your data can enhance their business operations. It is important to help them out by being very specific about what is contained within the data set and the known/potential use cases where it can provide value.
Provide technical attributes & samples
In addition to addressing the potential use cases and value considerations, data Vendors need to also make sure to include documentation that will allow potential buyers to easily understand the technical information contained within the data product. Quality and thorough documentation will reduce confusion and help to manage expectations about what is being delivered. Basic documentation needs to include background notes on the following aspects:
- Fields/variables included
- Volume of records
- Update frequency
- Methodology on how the data is produced/procured
- Company background
- API/technical documentation
This might seem like a lot to produce, however, it should be noted that data vendors will only have to collect this material one time in order to be able to scale sales.
Determine usage rights
Lastly, data vendors will want to ensure they are clear and up-front with potential buyers about the usage rights provided as part of the data sale. The major considerations to be clear about are:
- The number of seats provided per license
- If the data can be re-sold
- If the data can be included in a product or research that is sold externally
- Publishing rights afforded
- Whether the data can only be used for internal analysis
For companies that sell data directly, they will need to create their own legal agreements. Meanwhile, companies that work with an indirect sales channel partner can generally use the legal agreements provided by this channel partner. However, this is on a case by case basis so make sure to inquire before establishing a formal arrangement.
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Missed the first part of the series? See "Go-To-Market Guidebook #1: What you got?" to help your organization understand how to sell data.
