“You may have heard in your organization that [data monetization] should be easy -- repackage data, find customers, sell product, achieve success -- mission accomplished,” writes Lydia Jones, InSage founder, and Karl Urich, president of DataFoxtrot, in a recent article on Tech Target. But while the process of monetizing your data may seem straight-forward, it's actually much more complicated and nuanced than it first appears and it requires a plan.
Like with most new projects, the hardest part for an organization looking to monetize its data is getting started. With so much involved in the process, it can be overwhelming to know what to take into consideration when creating a data monetization plan. Jones and Urich shared three things organizations should evaluate as they begin the process of data monetization and we think they gave some great advice.
Evaluate business opportunities
One of the first places to start to build your strategy is to have a solid understanding of the types of businesses and industries that can benefit from your data. Sounds simple, right? Jones and Urich go on to explain that it takes more than just looking around at the organizations in a similar industry - you should also take into consideration those that aren’t as obvious.
Jones and Urich give tips on how to identify those industries, and we’d add that one of the easiest ways to identify the kinds of organizations that can benefit from your data is to ask this question: What pain point can my data solve? Once you can answer that, it makes it much easier to identify potential customers. It also begins to give you direction. Knowing the problem you want to solve for customers is a key starting point for building a successful product.
Evaluate data regulations
There’s nothing worse than investing a substantial amount of money, time, and energy into your data monetization plans, only to find that they’re not viable due to data regulations. “In the United States, data privacy is regulated on a sector by sector basis,” Jones and Urich advise. You should be familiar with the regulations in all potential customers’ industries.
Evaluate cost/benefit
Evaluating the cost and benefit of monetizing your data starts with two questions: “What will it cost to build and maintain over time?" and "What price will people accept?” This may take some time to fully understand, but it's an important question.
Keep in mind as you consider what price and pricing models you should adopt, that it’s not just about the data being sold, but about the insights, metrics, etc., that are a part of your data. Don’t simply position your information as raw data, but as but rather as a solution that solves a problem.
These three key points are an excellent starting place for your journey to monetize data. If you still have questions about getting started or about data monetization and data products in general, check out some of our blog posts on the subject or send us a message.