Move over data scrubbing and skip tracing, there’s a new sheriff in town: data enrichment. Data enrichment simply refers to the act of taking data in your system and appending it with other useful data. So, is this just lipstick-on-a-pig marketing jargon? Yes and no.
Yes, because data enrichment is another way to describe data appending which is another way to describe skip tracing and account scrubbing. However, no because enriched data has two key characteristics that illustrate it is a more mature approach to data append strategy than your average account scrub effort: informed business decisions and treating account data like a valuable asset to your livelihood.
#1 Data Enrichment is about informed business decisions
You’re already spending big on data, and people are probably still trying to sell you more. Overwhelmed ARM companies are turning to data analysts or third-party vendors to make sense of it all. So that brings up the question – why are so many organizations in the ARM industry still struggling to turn data into clear and profitable outcomes?
In part, it’s due to a gap in connecting purchased data to an informed business strategy. And let’s not oversimplify – that is extremely challenging for nearly all companies and sectors alike. It’s not one person’s job, it’s a cultural shift to relying on listening to the story your data is telling you and using it to drive your strategic focus for constant optimization. It’s avoiding complacency in purchasing addresses and phones the way you always have, from the vendor you always have, and applying the same effort to accounts without knowing for certain if there’s profitable return on that effort. This has become even more important as companies struggle with shrinking margins due to client pressure.
There are certainly times when a waterfall strategy makes a lot of sense for accounts segmented by potential profitability and you may want to look at multiple vendors to get the best possible data append.
In summary, there’s more to a data-driven strategy then just the account data you purchase, but it’s a critical component of profitability, differentiation, and being a top-ranked producer for your clients. To receive an ROI on your data investment, it is critical for your ARM business to have an informed data enrichment strategy in place.
#2 Data Enrichment is a strategic investment to protect your assets and get a proven ROI on your effort
One goal of enriching data is to make your data a more useful asset to your business – to get more out of it, to do more with it, to access it more easily and to be more proactive in its use – all while keeping costs and risks at a minimum. There are a few ways you can use a data enrichment strategy to grow and protect your data as a strategic asset to your business. For example, we often recommend “layering” your data strategy to make sure you are mitigating risk in more than one way (for example, bankruptcy scrub at time of placement and ongoing bankruptcy monitoring).
We also see many agencies continuing to struggle understanding work effort to return, or the ROI of your accounts. Once you know the ROI trends you can decide where to invest and how to make your data purchasing and leveraging strategy stand out against competitors.
Truly innovative servicers to ARM recognize that ROI should drive those data decisions and package up consumer data with not just a score, but with a strategy, specific to their account history and platform capabilities.
Challenge Your Data
Right now, you might be questioning the current value of your data, here’s a checklist of challenges that can help you start to think differently about your account enrichment strategy:
- Do I view my data partner as more than just a means to a right party contact?
- Does my data partner help with a prioritization model (more than a score)?
- Does my data provider help me drive the way we work accounts?
- Do I have access to data ROI reporting based on collection rates, and does my data partner review the information with me regularly?
- Does my data partner arm me with marketing materials that help me show clients our comprehensive investment in data?
Data enrichment is not new, it’s just a new perspective on how ARM utilizes the vast and growing pool of information available.
As always, if you are interested in gaining an outside perspective on how to improve your data enrichment strategy, reach out to us for a conversation. You can also check out our data enrichment overview for more information on how our solution addresses a maturing data-driven industry.