Last week we explored the reality that, for most companies, more one in three customer records is out of date, or otherwise of poor quality.
A common approach to solving the problem is to look to third party data providers to provide updated data.
This approach can work, but, in my opinion should be a last resort.
Have you exhausted in-house sources for enrichment?
For many companies, customer data is stored across multiple systems and siloes.
A genuine single customer view can link related customer records across systems and business areas. Rather than purchasing an email address (for example) from a third party it may be possible to find an email address in a related customer record linked to another business area, or in another system,.
Improving data quality and sharing common data across internal systems can save you tens of milions in data purchase csts
Do you understand what you are getting?
Third party data – for example from a credit bureau – can be expensive. If you are paying for something – maybe tens of millions of rands for volumes – you want it to be better than what you already have.
What guarantees do you have that the third party data is better that the data that you already have?
Can you confirm that the data provider has the necessary data management practices in place to ensure that purchased data is current, complete and accurate?
Do you have a proper understanding of what it is that you are looking for? If, for example, you need telephone numbers but not emails are you able to specify that?
Are you able to link their new data to your own? Is there sufficient detail in the data you provide, or the data provided back to you that you can agree with confidence that you are all working with the same client record.
Will you be able to maintain the new higher quality data going forward?
Again – many of these questions can only be answered if the governance and quality foundations are in place
What are the limitations?
Any contract with a third party data provider will come with certain limitations.
At the simplest level – do you understand what you can do with the third party data, and who you can share it with.? Your data provider may restrict your use of data to a specific purpose or business area. In this case, you may find that you are buying the same data over and over.
You may also be restricted by regulations – GDPR and PoPIA expressly require that data be used with the customer’s knowledge and permission, and for specific purposes only.
Enter data sharing agreements
Data sharing agreements are contracts between your internal data stakeholders and other parties – both internal and external.
Data sharing agreements are governance artifacts that go beyond a technical specification to include contractual agreements covering factors such as further processing limitations, accountability, data protection and security requirements, and more.
The bottom line – before purchasing data consider whether your governance and quality capabilities are adequate to allow you to get value