Today more than ever, it’s important for companies to understand how people behave. How do they move around a city? Where do they go? If your business is looking for critical, actionable insights into consumer behavior, it needs to invest in the right alternative data companies.

But there’s a lot of data out there and not all of it is useful. How do you identify the best alternative data companies and the most robust sets of data?

The Benefits of Using Alternative Data for Business Decisions

Before you start looking for an alternative data company, consider the major benefits of alternative data. By digging deeper into what your alternative data company will do for you, you can determine the elements that will be most important.

Alternative data can deliver:

  1. Understanding of consumer behavior: Knowing how people move around and behave in different areas can give businesses a better understanding of consumer behavior and help them to target their products and services more accurately.
  2. Improved risk assessment: By analyzing large amounts of data, businesses can get a better understanding of potential risks and make more informed decisions about where to allocate their resources.
  3. More accurate predictions: By incorporating alternative data into their predictive models, businesses can produce more accurate forecasts for a variety of outcomes. This is particularly important for the financial sector. Finding quality alternative data in finance can be a game-changer for your business.
  4. Enhanced marketing campaigns: By understanding consumer behavior in finer detail, businesses can create more effective marketing campaigns that resonate with their target audience.
  5. More insight into competitive behavior: By analyzing the data that your competitors are collecting, you can gain an advantage by understanding what they know about your industry and customers. For example, the financial industry could greatly benefit from location based data.

Altogether, more information is more power. The more data that you can collect, the better your decisions will be. But that data has to be accurate. If the alternative data is inaccurate, you will be making the wrong decision based on erroneous factors.

What Are The Different Types of Alternative Data?

Now that you know the benefits of alternative data, it’s important to understand the different types of data that are out there. Not all data is created equal, and some types of data are more valuable than others.

The most common types of alternative data include:

  • Location-based analytics: Location analytics data tracks consumer movement and behavior in physical space. It can be used to understand foot traffic data patterns, where people are going, and how they are moving around a city.
  • Vehicle probe data: Vehicle probe data encompasses timestamped geo-location and speed data collected directly from vehicles. This has been particularly useful for traffic management and urban planning, but has equally strong potential in commercial applications such as logistics, food delivery, and other last-mile services.
  • Social media data: Social media data includes everything from tweets to posts to check-ins. This type of data can be used to understand what people are saying about your brand, your competitor’s brands, and the overall sentiment around specific topics. Additionally, it allows marketers to keep a finger on the pulse of their brand health.
  • Web scraping data: Web scraping data is data that is collected automatically from the web. This can include everything from website visits to online reviews to product listings.
  • Transaction data: Transaction data includes all of the data associated with a purchase, including the time, location, price, and product details. This type of data can be used to understand consumer behavior, track sales trends, and predict future demand.
  • Sensor data: Sensor data is collected from a variety of sources, including weather stations, traffic cameras, and retail store sensors. This type of data can be used to understand everything from traffic patterns to consumer behavior in brick-and-mortar stores.

What To Look for in an Alternative Data Company

Deciding which alternative data company you should work with will be highly dependent on the type of data that they produce. Consider the following before partnering with an alternative data company:

Accuracy and Timeliness

The best alternative data companies will have a proven track record of accuracy and timeliness. Their data should be up-to-date, complete, and free of errors. They will validate their data and test it thoroughly—and can show tangible results to their customers. A good alternative data company should be able to show major benefits, such as the ROI of its customers increasing.

Relevance and Variety

The data sets offered by the company should be relevant to your business and address the specific questions you’re looking to answer. The data should also be varied, so you can get a full understanding of consumer behavior.

This also depends on what you’re looking for. Your goals can range from trying to score the best leads to trying to increase the efficiency of public roadways—the alternative data must be relevant to your needs.

Cost, Budget, and ROI

Of course, budget is always a consideration. How much does the data mean to you? As with ROAS (Return on Advertising Spend), there’s also a Return on Data Acquisition. Will the data increase efficiency? Will it improve your ROI? Some of these things won’t be known until you start integrating alternative data into your content pipeline.

Usability and Readability

How actionable is the data that’s being provided? The best alternative data companies make it easy for you to understand and use their data. They provide clear documentation, helpful tutorials, and easy-to-use tools.

More importantly, you must choose your alternative data source based on the type of data that you need. If you need traffic and weather data, you need an alternative data source that specializes in this type of information. If you need real estate trends or financial trends, you may need another alternative data source altogether.

Innovation and Cooperation

What is the alternative data company doing to move forward within the data industry? How are they securing their future data sets—how do they know that they’ll continue to bring invaluable data regarding consumer behaviors?

An alternative data company should always be looking forward. Consider if the majority of information registered now involves cars, what would happen if there was a major switch to public transportation?

Reputation and Customer Support

Finally, it’s important to work with a company that you trust and a company that supports you. When importing, exporting, and analyzing data, will you have a trusted resource that can help? Do you have a point-of-contact that can help you analyze your data—or will you need to handle everything on your own?

Look up reviews and testimonials for your alternative data provider. If all the reviews say that the provider has accurate, timely, and comprehensive information, then you’re likely working with a solid organization.

An Alternative Data Company You Can Trust

INRIX is an industry pioneer in mobility data and a trusted resource for private enterprises. INRIX helps financial professionals build calculated, data-led strategies by providing insights into the mobility of people and goods. 

Is your financial services firm interested in leveraging the power of alternative data? Click here to schedule a discovery call and a free demo with INRIX.