Firmographics comprises information on a company’s key characteristics. Similar to demographic data, firmographic data divides companies into useful market segments. Marketers and sales teams then use these segments in lead enrichment, sales cycle analysis, and other duties.
In most cases, you can find firmographic data by simple online research. However, in other cases, you might need to use third party database or find someone with access to the information.
In essence, there are three kinds of data: self-reported data, derived data, and verified data.
Self-reported data is anything that a company chooses to reveal about itself. The company may publish this information in press releases or on its websites or social media accounts. Additional self-declared sources include public company registers and tax declarations.
Derived data includes any information drawn from sources that are not trying to share the data intentionally. Instead, you or the vendor you select decipher the information through analysis.
Finally, verified data: though it is the most trustworthy type of company data, it is also the most costly in time and resources as it involves manual verification of data. In other words, individuals must email or call company personnel to verify every detail in question.
Typical attributes of firmographic data include:
Companies and other organizations use firmographics data to identify unique organizational behaviors with relation to certain characteristics. For instance, a manufacturing company with an estimated yearly revenue of $10 million should employ at least 700 employees.
With this information, organizations can conduct market research and competitor analysis. Risk managers can also use the information to find risky investments—for example, by noting discrepancies in reported revenue and verified human resources used by a single company.
To estimate the quality of firmographic data, you should first examine the technique used by the creators to collect it. Data that a program has scraped for you might be true but you will need to ensure the sources were up to date. In contrast, manually-verified data will usually be high quality but, as noted above, it will most likely cost much more.
Generally speaking, firmographic data is of good quality compared to other data categories. This is in part due to the fact that data providers don’t have to put in much effort to cleanse and present the data. However, as in any scenario, you should keep in mind that you need firmographic data that suits your needs.
Before starting to work with the database, you should make sure the information will really add value to your company. For instance, you can measure added value by the increased number of sales leads and converted customers that your marketing department (the most likely user of the database) reports. The latter measurement may not be evident until after the database has been in use for a while but the former should be fairly evident from even before use. To increase the probability that the database will add value to your company, make sure to update and uniformly catalogue the information.
Another important element to consider is the combination of firmographics and artificial intelligence. This combination can produce very interesting results. An integrated firmographic AI system can better predict which customers are likely to buy by analyzing which companies are growing or shrinking and which ones have increasing revenue or decreasing market share.
To put the problem of firmographics into context, do a thought experiment. Imagine you had to choose a spouse based on four or five demographic data points, such as age, height, weight, and sexual orientation. Now, those things matter. Still … You’d probably runout of time before you’d happen on your soulmate.
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