This week I've been pondering the challenges of selling information. Data is information without context. If I said I wanted to sell you some lottery numbers, unless you were naieve, you probably wouldnt pay anything for them since they are probably just made up numbers. In other words the numbers would be data.
Now if I said that they were winning lottery numbers then you might be a little more interested. Now if I said they were jackpot winnng numbers for this weekend's draw they would suddenly have value. You might wonder how I had come to acquire such valuable information - provided I could convince you of their authenticity, you would be prepared to pay a lot for them.
Say the jackpot was £10M. You'd happily pay £1M for my information.
Now lottery numbers are an unusual case. You are unlikely to pay me £1M up front for those numbers. The interesting thing is I could actually do a deal. I could agree no money up front and you agree to give me £5M of the £10M winnings. Suddenly you're prepared to pay 5x the value for the information than I was previously asking for, to eliminate the risk of paying me £1M up front !
The risk of paying a few pound for a losing ticket is preferable to spending £1M for some losing advice.
Now let's return to the £1M scenario. Assuming you were prepared to pay £1M for my numbers one thing that is important is to know how many other people I have sold the numbers to. If I have sold the numbers to 99 other people then the winning prize fund will be divided between 100 people so the £10M jackpot is now only a £100k jackpot. The business case for paying me £1M is not very solid - well at least for you. It would be very solid for me.
So lets review this thought experiment
- Context for the information adds value
- Timeliness of the information adds value
- Exclusivity of the information adds value
So if we were selling information, these are the primary aspects which we have to sell.
Share prices which are late are of less value than the current price
Information about shares which is exclusive is more valuable than public domain knowledge
In sales, we need leads and this might be one area we are prepared to buy other people's services. If someone was offering us a mailing list of 1 million email addresses, it probably isn't that interesting. We don't know whether these are email addresses which have been made up or much about the people on the other end. We would in essence be buying a spam list so the price for email address that we would be prepared to pay would be very low. Would you pay £1 per address? Nope.
Now if I told you these 1 million people were prospects in the market for what you are selling and they are ready to buy then suddenly £1 per address might seem very attractive. You might only want to 1,000 of the email addresses so you might pay £1 per address.
If the email addresses were augmented with information such as the name of the person, their status and other information to add validity to the email address you might be willing to pay £10 or more per lead.
Suddenly we've taken something which has a low perceived value and made it more valuable. Same basic product (email addresses) and increased the price someone is prepared to pay for it.
My job is selling technology. Actually I'm more of a translator. I sell technology to other businesses and that's where things get weird. There is a bewildering array of tech out there and unfortunately many companies think technology sells itself and the value that the technology delivers should be obvious. Wrong. That's where I come in. I said I was a translator. My job is to translate techno babble into value that customers understand. This blog share my adventures with high tech sales. Selling high tech is fun so come join me on my sales journey!