The Hidden Costs of Ignoring Credit Data Benchmarking

The demands of financial services mean you must continually evolve, adapt, and innovate to stay competitive. For many, this means tapping into credit data benchmarking. But what happens when firms sideline this crucial process, believing it to be non-essential or even redundant? The costs, both apparent and hidden, can be staggering.

From overpaying for data services to missing out on crucial contract terms, overlooking credit data benchmarking can have repercussions far more reaching than most realise. In this post, we'll uncover the reasons why benchmarking isn't just a good-to-have, but an indispensable asset.?

What is credit data benchmarking?

At its core, credit data benchmarking is the process of comparing your company's credit data processes, costs, and quality against industry standards or best practices. But it's so much more than a mere comparison. It's about highlighting areas of opportunity, streamlining costs, and ensuring your credit risk programs are powered by top-notch data.

Why is it critical for businesses?

• Accurate pricing: No one wants to pay more than they should, especially when margins are tight and every penny counts. Benchmarking ensures you're getting the best bang for your buck, aligning the value you receive with the costs you incur.
• Filling data gaps: Every firm is unique, with distinct needs and objectives. Benchmarking helps pinpoint where your current credit data might be lacking, allowing for more informed and strategic decisions on data procurement.
• Staying ahead: In the fast-paced financial world, yesterday's strategies can quickly become obsolete. With benchmarking, you can stay abreast of industry shifts, ensuring your strategies are always one step ahead.
• Maximised ROI: By ensuring you're using the most relevant and competitively priced data, benchmarking helps optimise return on investment.

PurplePatch's unique approach

Enter PurplePatch, your trusted partner in this journey. Founded with a vision of bringing transparency and fairness to credit data, Nick Green and Nick Frazer have shaped an approach that stands for more than just benchmarking. It represents a commitment to ensure credit providers, regardless of their size or industry, are equipped with the best possible bureau data at fair prices. Their track record speaks volumes, having saved companies millions by refining their credit data strategies.

At the start of this blog, we mentioned the consequences of not using data benchmarking. So let’s get into these now.?

The consequences of neglecting benchmarking

Understanding the implications of sidelining credit data benchmarking is crucial for any credit provider aiming to maintain a competitive edge. Here, we're going to take a look at the consequences:

1. Overpayment

• Financial drain: At a glance, it might seem like a small discrepancy in pricing. But over time, and across various credit data services, these costs accumulate. Credit providers risk allocating a significant portion of their budget to inflated data costs, which could have been better utilised elsewhere.
• Unjustifiable costs: Paying a premium is only justifiable if it translates to a highly unique offering. However, without benchmarking, companies may be shelling out extra for services that their competitors might be getting at a fraction of the cost.

2. Data inefficiencies

• Gaps in information: A business operates efficiently when it has a comprehensive understanding of its credit landscape. Ignoring benchmarking can lead to blind spots, where vital pieces of credit data are missing, leading to sub-optimal decision making.
• Redundant data: On the flip side, companies might be paying for data that doesn’t offer any unique insights, leading to redundancy. This not only wastes resources but also clutters the decision-making process.

3. Competitive disadvantage

• Lagging behind: In an industry where staying updated can be the difference between profit and loss, neglecting benchmarking can make businesses fall behind, especially if competitors are leveraging better, more relevant data.
• Missed opportunities: Companies that aren’t benchmarking may be unaware of newer, more efficient or more innovative credit data solutions in the market. This can lead to missed opportunities to innovate and evolve.

4. Negotiation handicaps

• Lack of leverage: Knowledge is power. When renegotiating contracts or seeking better terms with data providers, being armed with benchmarked data can provide significant leverage. Without it, companies are going in blind, potentially leaving value on the table.
• Over-reliance on a single vendor: Benchmarking often reveals the strengths and weaknesses of various credit data providers. Without this insight, companies might become overly reliant on a single provider, which can be risky, especially if that provider's standards slip or their prices surge.

5. Strategic missteps

• Misaligned priorities: Companies might misallocate resources, focusing on areas that seem crucial but are in fact not in line with industry best practices.
• Reactive, not proactive: Without the forward-looking insights that benchmarking provides, companies can become reactive, only making changes when problems become apparent, rather than anticipating and navigating challenges in advance.

Benchmarking isn't merely a process; it's a strategic tool. As we've seen, neglecting it doesn’t just mean missing out on potential savings. It has far-reaching consequences, touching everything from financial health to competitive positioning. In a world that's ever-evolving, can any business afford to overlook it?

Why choose PurplePatch for credit data benchmarking?

Navigating credit data requires more than just industry knowledge; it demands genuine experience, a commitment to transparency, and a partner-centric approach.?

Here’s why PurplePatch stands out:

1. Expertise

• Deep roots: With co-founders like Nick Green and Nick Frazer, who collectively bring over 60 years of experience from top bureaux, PurplePatch is firmly rooted in the industry.
• Holistic insight: Their background isn’t just extensive; it’s diverse. From sales management to board positions at bureaux like Experian, Equifax and Dun & Bradstreet, they've seen and understood every facet of the credit risk information industry.

2. Transparent and fair approach

• Clear pricing: PurplePatch is on a mission to bring transparency to credit data costs. They ensure businesses aren’t paying exorbitant prices, shielding them from unnecessary financial drains.
• Objective recommendations: Working independently, their advice is genuinely impartial. Whether suggesting data providers or products, it's always aligned with the client's best interests.

3. Tailored solutions

• Client-centric process: From listening to your needs to engaging in in-depth comparisons, PurplePatch tailors its recommendations to suit each business's unique needs and challenges.
• Beyond cost-savings: While they've secured massive savings for their clients, their approach isn’t just about cost-efficiency. They focus on identifying the best contract terms and ensuring clients have access to top-quality credit data.

4. Trust and credibility

• Unparalleled testimonials: As noted by top Retail Banks, PurplePatch's expertise, strategic thinking, and benchmarking insights have been instrumental in achieving significant cost reductions and realising value rapidly.
• Accredited standards: With their Hellios FSQS stage 2 qualification renewed annually, they meet benchmarks set by major banks and financial institutions, ensuring credibility and trustworthiness in their operations.

With PurplePatch, businesses don't just get a consultant; they secure a trusted partner, committed to getting them ahead in the ever-competitive landscape of credit data.

The power of informed decisions in credit data

In the age of information, making decisions based on clear, precise, and benchmarked data isn't just an advantage—it's a necessity. The financial implications of not staying updated with credit data benchmarking can ripple through an organisation, affecting everything from strategic choices to bottom-line results.?

But more than just savings, aligning with a partner like PurplePatch provides clarity, confidence, and a competitive edge. In the words of the famous adage, "Knowledge is power."

Your next move

Are you ready to leverage the insights and savings potential that credit data benchmarking can bring to your organisation? Whether you're looking to renew, renegotiate, or simply reassess your current credit data situation, PurplePatch is here to guide and support.

?? Reach out today: Don't let another day go by paying more than you should. Contact PurplePatch for a FREE data benchmarking assessment. Email: [email protected] or call: 01789 551392.

Because in the world of credit data, the best decisions are informed ones.