Although they can be complementary to media, data-driven businesses require different technology, marketing and sales skills, analytical expertise and delivery mechanisms.
“Business information is not low-hanging fruit,” said Megan St. John, managing director of InfoCommerce Group, a boutique consulting firm specializing in business information. “If you aren't already doing it, it's going to be doubly hard to do it now during a down economy.”
Mike Reilly, chairman-CEO of Randall-Reilly Publishing Co., discovered how different data companies are after acquiring Equipment Data Associates (EDA) in 1998. “In three years under my brilliant management, I took the EBITDA from $1.5 million to $1.4 million,” he said with a laugh.
Reilly subsequently turned over the reins to Bill Ault, EDA president. Over the next six years, revenue increased 600% and profit threefold, thanks in part to a substantial investment in people and technology.
“One investment that revolutionized our business was our customer experience department,” Ault said. The customer experience team provides training and ongoing help to existing customers, freeing salespeople to go after new prospects.
Training is no small task because EDA users purchase subscriptions to very specific segments of a vast database of purchasers of capital equipment in 11 industries, including agriculture, construction, medical devices and trucking. “But once somebody understands how to use this information, they're hooked for life,” Reilly said.
Early last year, Investcorp, a multibillion-dollar global investment firm, acquired Randall-Reilly, with Reilly and other members of management retaining their equity stakes. “Now that I have a partner with deep pockets, I anticipate making at least two acquisitions this year,” he said. “I'm looking at companies that sell subscription-based information because I like to build platforms around data. Data is the DNA of our future.” M