Improving Your Credit Information
By Mike Sherlock

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 this problem.

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: msherlock@kreller.com

By Mike Sherlock
Reprinted with permission from the Covering Credit Newsletter 04/1/05 Edition