In the bygone days of print directories, one sales challenge stood out above all others: convincing buyers to regularly buy the new edition of the directory. The issue was that directory buyers weren’t easily convinced that enough had changed in the course of a year to justify purchasing the new edition. Everyone in the business back then knows about the nemesis that was the every-other-year buying pattern.

 The marketing remedy for this problem (a problem that sounds positively quaint today) was to “quantify change.” This typically meant using actual database counts to prove that enough had changed to justify purchase of a new edition. Rather than saying “thousands of updated addresses,” a vague and not very compelling statement, publishers would say, “23,418 updated addresses.” By quantifying change, publishers offered specificity to describe their updating efforts, something that proved both credible and compelling to data buyers.

 Fast forward to today when the marketing challenge has almost been completely reversed. Data buyers have radically increased their expectations, based on the belief that all online databases are updated in real-time and are completely current. It’s a belief based on wishful thinking and a fundamental misunderstanding of what the word “online” means. Of course, many data providers encouraged that thinking by saying that their databases were “updated daily.” That meant that they were making changes every day. To many data buyers, it meant that the entire database was refreshed and updated daily. It’s a disconnect, and it’s a big one.

 These raised expectations and technological misunderstandings have complicated the marketing strategies of most data publishers. After all, it’s hard to sell your database on the basis of it being complete and current when that’s a basic expectation of your prospects. For that reason, many data publishers now sell on the basis of the qualityof their data. But that’s a tough slog, because as I have said many times, quality is easy to claim and hard to prove. In a crazy way, hedge funds have it right: they buy databases like candy. They try them for a year or two, and if they can’t make money off them, they move on to the next database. That’s easy for hedge funds to do, but not the average business. Selling on quality is further complicated by the fact that some publishers don’t want to talk about the source of their data (for reasons good and bad), and some publishers who license data from reputable sources are contractually prohibited from disclosing this information. 

What’s a publisher to do? I think marketing strategy today has to be based on deep market knowledge. Too many data purveyors these days (especially the disruptive variety) are aggregators or packagers. Aggregators tend to focus on building the biggest datasets, and usually emphasize quantity over everything else. Packagers take a dataset (typically public domain data) and create a fancy user interface to add value. What’s lacking in both cases is the market knowledge that would allow them, for example, to confidently drop out unqualified records as opposed to blindly selling whatever they can get their hands on. It’s also about building user interfaces that meet real industry-specific needs as opposed to generic searching and reporting.

Business is getting more complex and specialized all the time. And I see time and again that the most successful data publishers come out of the industries they serve and build databases to solve real and painful business problems that they experienced themselves. Artificial intelligence and fancy algorithms are all well and good, but their answers can’t be any better than the underlying data on which they operate. Think of data companies such as PitchBook and CompStak.

To succeed in the data business today, you need to sell your smarts. That means you have to demonstrate you know your market and the needs of your market better than anyone, and that you have built a dataset uniquely capable of addressing those needs. Fancy sales triggers are wonderful, but if they are monitoring the wrong companies or the wrong events, they’ll produce more noise than signal, defeating their purpose.

Going forward, it won’t be about having the most companies. It will be about having the rightcompanies. It won’t be about having the most data elements. It will be about having the rightdata elements. And you determine both by deeply understanding how your market works and what business problems need to be solved. Determine how to demonstrate your market knowledge and you’ll have a winning marketing strategy that will be effective for years to come.