It’s no secret that one of the biggest assets your company has to offer is its data. By now, most business professionals have heard the phrase “data is the new oil.” It’s indisputable that, in the digital era, data has become one of the most valuable resources, and once that raw data is transformed, it can become an even more valuable product. In fact, the data monetization market is anticipated to reach $9.09 billion by 2027.
Data provides valuable knowledge that leads to exponential innovation and growth in every sector. No matter what kind of data your company collects, there are other parties that would benefit greatly from acquiring it and learning from it. But how do you determine the value of the data that your company has to offer and how do you monetize that data?
Determining the value of your company’s data
One of the challenges of determining the worth of your organization’s data is that there is no exact formula or equation for companies to use. There are, however, key metrics that should be factored into your valuation.
Types of data
First, understand what types of data your company owns and how useful that data is. You probably have data on products, internal processes, employees, consumer behavior, transactions, finances, etc. Consider which types of data would be remarketable and valuable to outside companies. Could some of your data help other companies improve their processes? Could some of your data be helpful for identifying trends in your business category?
If you are interested in selling any type of consumer data, make sure that it is the type of data that can be anonymized. Privacy is important and data must be anonymized before it is shared outside of your organization.
Uniqueness and usability
Next, you’ll want to determine how unique your data is. Is there something about your data that sets it apart from the data collected by other companies? What could other organizations learn from your data that they can’t learn from their own? Data that is especially rare, unique, or difficult to obtain will be more valuable than data that isn’t. If you are the only organization that has access to certain information, companies are more likely to pay larger price tags to obtain it.
You must also strongly consider the usability of your data by external parties. Your data might be extremely usable in your own organization, but consider how other companies might apply your data to their own use cases. How might other companies use your data to improve, grow, or innovate? The more use cases your data can be used in, the better. More companies will seek out your data if they know that it will be a key component in driving results.
Accuracy, recency, and resolution
Data is only as good as its detail and quality. The more detailed, relevant, reliable and accurate your data is, the more valuable it is. Determine the detail and relevancy of your data points and evaluate the overall quality of the data your organization has stored. Outside companies will validate data in order to determine its accuracy, so make sure yours is up to par.
Also consider how “fresh” your data is. How long ago was it collected and how relevant will it remain into the future? Is your data generated on a daily basis? A weekly basis? More recent data is generally considered more valuable. However, historical data can also be valuable, depending on what type it is and what it is being used for.
Coverage and geography
The last key factors you’ll want to determine are the coverage and geography of your data. Does your data cover a broad region of markets or just a specific market? Can your data be used to create market-wide analysis? The more areas your data covers, the better. However, extremely niche data can also be very valuable based on scarcity.
Geographic factors can also influence the value of your data. Is your data collected worldwide or does it cover a specific region? Data collected in big cities will offer a different sort of value than data collected in more rural areas.
How much is your data worth within your organization?
Another way to look at your data’s value is to determine how much your data is worth within your own organization. How much labor has gone into collecting, cleaning, and storing your daya? How much would it cost to replace your data if it was lost? How much does your data contribute to the revenue of your organization?
Answering questions like this could help organizations find a ballpark range of numeric value when they determine how much they might make by selling their data. Consider how much it has cost your own organization to collect your data and how much value it has generated for your company.
Monetizing your organization’s data
After carefully evaluating all of the factors that go into determining the worth of your company’s data, you might realize that your data could be worth a lot more than you thought!
But how do you get started on selling that data? There are a number of ways that you can sell your data to other organizations and begin generating revenue.
The first option is to directly sell to another company. This would require finding and building a relationship with a company that might be interested in your data, hiring data engineers to transform and transfer your data, and getting legal teams involved to negotiate contracts. This process often takes months to years, becoming costly and tedious. And, once one direct data transaction has been finalized, you must repeat the process all over again if you want to sell to a different company.
Another option is to sell to a data aggregator. These organizations collect data from multiple companies and then process and repackage it. Selling to these types of companies is easier and faster than going through a direct sale, but you’ll make less profit and you lose control over what happens to your data once the aggregators have obtained it.
The fastest, easiest, and most reliable option is to sell your data using a data collaboration platform. A data collaboration platform is an end-to-end data monetization solution that provides the self-service tools and workflows necessary to organize and sell your data to multiple buyers. Using a data collaboration platform, you can run an e-commerce data business, sell data on an ad hoc basis, and list your data on data exchanges.
The best part is that anyone can use these platforms, even if they are new to the world of data monetization and have no coding experience. The tools and workflows provided make creating a data store an easy point-and-click endeavor. It’s like Shopify, but for data. Within just a few hours, your organization can build its own custom ecommerce shop front, create easily discoverable data products, market those data products to interested buyers, and simultaneously list your data products in a marketplace.
Want to learn more about creating an ecommerce data business? We’ll help you get started.