Bad Data, Specious Claim

The U.S. Supreme Court began to hear arguments this week on a case called Spokeo Inc. vs. Robins. The case hasn’t gotten too much attention, but for data publishers, the outcome could be profound.

The plaintiff in this case, Thomas Robins, claims that Spokeo, one of the larger online consumer data aggregators, damaged his reputation by disseminating incorrect information about him. According to published accounts, the record Spokeo had on Robins was a real botch job – almost everything was wrong. Ironically, a lot of the information was wrong in a good way: Spokeo tagged him as wealthy even though he was unemployed, gave him a wife and even awarded him a graduate degree he didn’t have. But wrong data is wrong data, according to Robins.

Here’s the part that gets weird, subtle and scary. Robins can’t point to any specific example of how he was damaged by this bad information. And courts don’t like awarding damages when damages can’t be shown. That’s why Robins is suing under a provision of the Fair Credit Reporting Act, which does let consumers claim damages if false information about them is distributed. As Robins sees it, even though he can’t prove he was damaged, he’s still entitled to damages because the information was supposed to be correct and it wasn’t. Starting to feel a chill going down your spine? Well, it gets even scarier when you realize there are quite a few laws relating to consumer and professional information like this on the books. And while the maximum penalty under the Fair Credit Reporting Act isn’t huge – just $1,000 – this is the stuff of dreams for class action lawyers, who can sue on behalf of millions of individuals, with a maximum penalty of $1,000 each.

 If Robins prevails, the information industry will become a happy hunting ground for lawyers who can use these so-called statutory penalties to take data companies to court for a broad range of practices, even if nobody was damaged by them. Business data may be a safer place to be right now, but with the increased blurring of our business and personal lives, the safety could easily be undone by a creative lawyer somewhere.

The Robins case won’t be decided until 2016, but it’s one to monitor carefully. A lot of big players in the information industry are already monitoring it … very nervously.

Say What You Want!

A bill has recently been introduced in the U.S. Senate (S.2044) called the Consumer Review Freedom Act. Its core provision outlaws non-disparagement clauses for online reviews.

What are non-disparagement clauses? Increasingly, businesses are writing into their terms of sale language that prohibits their customers from posting unfavorable reviews about them online, often subjecting them to stiff penalties if they do.

There’s a need for this bill as non-disparagement clauses are rapidly getting out of hand. Interestingly, they first took hold in the healthcare profession, where physicians bridled at the notion of mere patients commenting on how they do business. Such clauses also briefly got some traction in the hotel industry, where hotels sought to fight back against the overwhelming power of sites such as TripAdvisor. It’s also been noted that non-disparagement clauses can even be found in the terms of use of more than a few websites. Merely by accessing these websites, you are prohibited from posting negative reviews. You may also be prohibited from making negative comments to friends and neighbors!

While most people see their online reviews as a simple freedom of speech issue, non-disparagement clauses can lead people to worry that perhaps their online reviews are not protected speech. It’s this potential chilling effect that this legislation seeks to end.

I certainly have sympathy for small businesses that have been subjected to unfair, inaccurate and mean-spirited reviews. Yet at the same time, resorting to non-disparagement clauses is a heavy-handed and clumsy response. Moreover, they have incredibly bad optics, something a number of businesses have learned when they tried to enforce this legal language and the dispute got picked up by the media.

This proposed legislation isn’t the last word in terms of the law of online reviews. Further balancing is needed. But as a way to make it clear to consumers that they are free to post their opinions online, it’s a positive development.

Bad Data Now Illegal in CA

There’s a new law in California that mandates that health plans maintain accurate provider directories. It’s a serious piece of legislation; health plans are even empowered to withhold reimbursements from physicians and other healthcare providers if they don’t cooperate in providing current data to the health plans.

Why has it come to this?  The reasons help illustrate some of the challenges in maintaining commercial databases today.

You would think that health plans would know a lot about the physicians in their plans, at the minimum where they are located because they are regularly sending checks out to them.  But as those of us who have dealt with physician databases well know, it just isn’t that easy.

For starters, many physicians like to receive checks at a location other than their offices. Post office boxes are still common. Some physicians have management companies located in separate offices collect funds for them. And of course, payments now are increasingly electronic – account to account with no address needed. All of this makes it hard to simply using billing information as the basis for a plan directory.

Physicians are also increasingly part of group practices. And these group practices often have multiple office locations. Physicians in these practices move around from location to location, making it difficult for physicians to provide a single physical address. The group practices themselves are often radically decentralized, so there really is no main office even for the group. Some groups cross county and state lines. Some groups have separate administrative offices. And then there are the doctors who work out of hospitals … this is just the tip of the iceberg, but you get the idea.

But the biggest problem of all is the industry’s failing. Physicians see a plan directory as one more administrative burden; health plans see an annoying cost center. The reality is that these plan directories are a prime marketing tool for both groups. Different surveys confirm that some stunning percentage of patients select their physician from these directories. Health plans market themselves on the quality and breadth of their networks. The first question of anyone contemplating a switch to a new plan is, “is my doctor in your network?”

By not understanding and leveraging the fact that health plan directories are a primary discovery tool and a great marketing vehicle, we end up in the sorry situation where government has to legislate accuracy when instead all those involved should be insisting on it themselves.

The best databases are those where the listed individuals or organizations see real benefit in participation. If this is true in your case, promote it like crazy. It’s too big an opportunity to miss.

Behavioral Leads Plus Deep Data Equal Sales Nirvana

Commercial data products have long been successfully used for sales prospecting purposes. Indeed, this is the single most common use of commercial data. At the same time, we’ve seen a rapid rise in the availability and popularity of behavioral sales leads.

A behavioral sales lead is created when an individual takes one or more actions that are associated with pre-purchase research. If I look at information about three different types of fork lifts in a 30-day timeframe, I think we’d all agree that I am very likely in the market for a fork lift very soon. This creates a very timely and thus very valuable sales lead. It is increasingly easy to set yourself up to track who is looking at what types of content on your website and how often. These high torque sales leads have proven to be a very lucrative business for lots of B2B websites.

But do these powerful sales leads render commercial databases less valuable or perhaps even irrelevant as sales prospecting tools? After all, a commercial database generally will only tell you that a business exists, not if it is actively in the market for a specific product. My view is that we will increasingly see a blending of behavioral sales leads and databases. The main reason for this is that databases need to be more actionable, and sales leads need more context.

The most progressive companies involved with sales leads are already moving in this direction. It’s great that they can tell an advertiser that Joe Smith of Acme Group may be a good prospect for a fork lift. But that information in turn generates a host of additional questions – the context needed to fully evaluate and properly respond to the sales lead. For example, is Acme Group big enough to afford one of my new fork lifts? Does Acme Group already own fork lifts, and if so, what brands? What business is Acme Group in? Who are other executives at Acme Group who may be involved in the purchase decision? That’s why these progressive website owners are increasingly licensing commercial data products to overlay some of this information on their sales leads.

But commercial data providers have not been standing still. Consider EDA, a Randall Reilly company. It knows virtually every company that owns a fork lift, along with lots of deep detail about those fork lifts -- right down to their serial numbers. Even more importantly, EDA knows when those fork lifts were acquired, and thus can estimate when companies will want to replace them. This is extremely valuable sales intelligence.

You can see where I am going. Take the individual-level intelligence of the sales lead, and merge it with the company-level intelligence of the data provider, and you create sales magic. You can now identify companies that ought to be in the market based on objective knowledge and confirm this with behavioral activity of people who work at those companies. You not only get two-level confirmation as to the strength of the sales opportunity, you have the needed context (deep company information) to make an intelligent sales approach. Even better, you can see if multiple people at the same company are doing pre-purchase research on fork lifts – a way to surface and target the hitherto invisible influencers who play a role in larger B2B purchase decisions. And of course you yield the absolute gold standard in sales lead quality, because you have multiple independent signals telling you this company is ready to buy.

The Great e-Book Conspiracy

It’s a standard plotline for a whole category of potboiler novels: a shadowy, global group of evil corporations conspire to bend the marketplace in such a way that it delivers them massive profits (and sometimes global domination as well).

Imagine my surprise then in reading a recent article that suggests that not only is such a conspiracy real and operating as we speak, but it is operating in the world of book publishing. Yes, the people who publish conspiracy novels are engaged in a conspiracy themselves!

Here’s the diabolical plan: newly freed to set the price of e-books, publishers are pricing them purposely high to discourage their sale. This in turn will push consumers to reject the e-book format. With nobody buying e-books, the e-book sellers will go out of business, and the publishers will have achieved their objective. And what might this objective be, you ask? Well, to force consumers to buy books in print again! According to this article, print books have better economics than e-books, so by destroying e-books, the glory days of book publishing will return.

Now there are more than a few prominent blogs read by publishing professionals that are relentless in promoting the belief that a resurgence in print books and magazines is right around the corner. There are no shortage of people in the publishing industry that want to believe. The fact that these blogs derive their advertising support largely from printing companies is itself telling. But to take it to the level of a plan where the major book publishers are collaborating on a plan to crush digital distribution in favor of print is odd, worrisome and not just a little sad.

And that’s just one more reason, by the way, that the data business is such a good business. There’s no longing for print among data publishers because the print format always constrained data. Remember the days of the print giants such as Sweet’s and Thomas Register? Even publishing their 30-volume print products with tens of thousands of pages, these publishers were only scratching the surface of what they might have published. Even the advent of CD-ROM did little for these publishers, who were forced to publish in inconvenient multi-disc sets. Online is the natural home for data. When you’re online, your economics improve, size doesn’t matter and you can update your content faster and more efficiently than ever before.

Best of all, there’s no need to create print-centric global conspiracies, though there’s probably a great novel in there somewhere…