How much is your company data worth? Recently, with their businesses stricken by the Covid-19 pandemic, both United Airlines and American Airlines have secured multi-billion dollar loans by collateralizing their MileagePlus and AAdvantage customer loyalty programs, respectively.
The third-party appraisals of their data suggest that it is worth two to three times more than the market value of the companies themselves. United’s customer data was valued at $20 billion while its market cap at the time was about $9 billion. Similarly, American’s data was valued at a minimum of $19.5 billion and up to a jaw-dropping $31.5 billion, whereas its own market cap was hovering at less than $8 billion.
The Importance of Your Data
You may know the value of all your company’s assets, but what about the biggest asset it has? That asset would be its data. And while some companies are discovering the value of their data, they may not know, literally, their data’s worth. And if you don’t know your data’s worth, you may not be able to protect it or value it properly as an asset.
So how do you figure out how much your data is worth?
According to Gartner Inc. a leading research and advisory company, some basic guidelines for valuing data would be;
1) Cost of acquisition?
2) How much would it cost to replace?
3) How much it contributes to the revenue of your organization?
4) How much could you make by renting or selling your data?
Cost of Acquisition
It may have been developed over the years but It you started with zero and built it to say 5,000 contacts, how much time, energy and effort went in to acquiring each customer?
Does your business acquire new customers or leads through advertising, a sales team, or special events? Maybe an all of the above approach?
How much would it cost to replace it?
If you were to suffer a sudden loss of your data how much revenue would be lost? Could your business survive the loss? How would you replace years of work in creating, cultivating, and maintaining your database. How much does it contributes to the revenue of your organization? Email blasts, sales events, new product announcements, loyalty programs all rely on the use of your database. How much revenue would be lost?
How much could you make by renting or selling your data?
If you were to suffer a sudden loss of your data how much
revenue would be lost? Could your business survive the loss? How would you replace years of work in creating, cultivating, and maintaining your data-base.
How much it contributes to the revenue of your organization?
Email blasts, sales events, new product announcements, loyalty programs all rely on the use of your database. How much revenue would be lost?
IBM’s 2019 Cost of a Data Breach Report reveals that the average data breach costs business $3.92 million with the cost of each individual compromised record valued at over $150.
In an article published in the Harvard Business Review authors Dante Disparte and Daniel Wagner wrote “Another reason it’s important to figure out how much your data is worth is for cybersecurity. Failure to accurately quantify the enterprise value of data (EvD) may there-fore woefully undervalue the importance of cyber-security investments, as well as the face values typically applied to cyber insurance policies,” they warn.
In an era of the ever-evolving security landscape, small-and medium-sized businesses (SMB’s) face large challenges when it comes to defending their networks, data and reputation. Keeping up with changes in technology can be as difficult as tracking the growing number of threats.
Take the first step and give us a call. Together we will put together a plan that will turn your business technology systems into effective, efficient components that will help you focus on and grow your business.