As a consultant to Credit professionals for the past sixteen years
I have several observations. One of these observations is the abundance
and ease of access of information on large private and public companies.
Contrasted with this is the difficulty and scarcity of reliable
information available on medium and small private companies.
Information providers focused on large companies are like gas stations on
a busy street. They are numerous and provide the same product, applying branding
to differentiate themselves. When seeking information providers on small
companies, the field narrows dramatically. There are several companies that
address, or attempt to address the small business segment of the market.
All claim to have the advantage, but no one to-date has found the secret
formula. Truth be told, based on our country’s laws and regulations
governing information gathering, providers will continue to struggle with
Vendors do their best to provide complete and current information, but at
the end of the day they run a business and need to determine how much research
can be delivered at a certain cost. As a former D&B ® employee, I
remember being taught that report updates were contingent on the number of
times a company’s report was pulled. This does have merit in that most
businesses would not stock items that were not being purchased. D&B ® has
over 90 percent of the commercial information market, and continues to reap
nice profits. In 2000 D&B ® stock was selling at less than $20 per
share. Today, the stock trades at nearly $60 per share. Much of this increase
in the value of this stock has been achieved through increased profitability
resulting from cost reductions in the information gathering process.
Two of the cost reductions implemented by D&B ® were eliminating
field reporters, and extending the window of what is considered current data.
By extending the window D&B ® can offer more “in date” reports
without increasing staff or workload. These changes bring D&B ® closer
to their competitors and is indicative of the continuing commodification
of the credit information marketplace. Credit professionals understand that
knowledge is power. That same adage applies to knowing what is available
to help your decision-making process.
My experience is that our clients have a good handle on credit policy. Policy
differences simply reflect the risk tolerance of those companies. The area
Kreller clients benefit from our expertise is ensuring that the resources
being put toward information purchases is going to the best use possible
i.e. best practice and best price. Information vendors are now, more than
ever, bombarding Credit professionals with offers of “new” products
and services. These vendors offer many overlapping services in addition to
new wrinkles. Evaluating these services is a very time consuming process.
In addition to reviewing the efficacy of these services, there is also the
issue of pricing.
The old saying of “information is worth what you will pay for it” has
never been truer. We see pricing variations on a daily basis for the same
products and volumes. Kreller assists its clients in navigating the path
to the best product and price for their information requirements, and will
provide a no-obligation assessment to improve the ROI on your credit information
purchases. The average Kreller client enjoys a 45 percent reduction in cost
while preferring the new method of information delivery. I would welcome
the opportunity to discuss your company’s program with you personally.
Mike Sherlock is a Senior Partner with The Kreller Group. He can
be reached by phone at (513) 723-8900 ext 119 or by email at: email@example.com