Can I sell my business’s proprietary data?

Data Monetization: Selling a company’s proprietary data assets to third parties

Every prospective data seller will ask themselves some important questions:

- Which internal teams should I involve when exploring data monetisation?

- What will be their primary concerns (outside of revenue expectations)?

- How can concerns be addressed without overburdening our legal team?

Most external data monetisation projects share a starting point: teams focused on innovation. These teams are generally cut from similar cloth and their goal is to discover alternative revenue streams through innovative methods. 

Most external data monetisation projects also share a common speed bump: legal and compliance teams. These teams are often unfamiliar with data sales as a business model and have only heard horror stories in the press. 

This blog post will help innovation teams collaborate more effectively with compliance teams by explaining how alternative data sales can be incredibly profitable AND low-risk. 

‍Is it ethical to sell customer data? 

‍This is a common and incredibly understandable concern. The comfort level of your business is very important in the decision-making process regarding data sales. At Neudata, we work closely with financial institutions that buy data to help them make better investment decisions. They have a very simple answer to this question: ‍

“Personal information is not of interest at all. Also, because the industry is highly regulated, personally identifiable information in a dataset would prevent data buyers from using it. Simply stated, removing personal data is essential for selling data to the investment sector.”  ‍

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‍What is the data used for? 

‍In Neudata’s buyer community, data is used to augment investment strategies and predict the prices of public equities and other assets. For example, an investor may purchase receipt data to better understand what products consumers are buying in the same basket, shedding light on how one stock price may depend on another. 

This use case is one reason why one individual’s information is not of interest to these data buyers—one consumer’s purchase will not shift an international corporation’s stock price.

Beyond the low compliance risk, the investment vertical can be ideal from a revenue perspective:

Investment teams often have similar interests when evaluating a company’s performance — for example, measuring airline revenue per passenger. Data products can, therefore, be created and sold in the same format to many investment firms. In other words, data sales in this vertical can be ‘off the shelf’ or replicable, and therefore, sales are more easily scaled. 

For comparison, data buyers in other industries may be looking for specific data segments, such as sales only related to one demographic, and therefore often need bespoke support. Sales to these buyers are far more difficult for a business to scale efficiently. 

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‍Do we have the right to sell customer data? 

The answer to this question depends on your business, its client pool, and the existing T&Cs that your clients have agreed to. Many businesses are only prevented from selling data linked to customer information. This means their T&Cs allow them to sell anonymous data derived from the company’s operations. In most cases, that provision would allow for the sale of augmented, anonymised data products. 

Neudata can help evaluate your T&Cs from an industry-standards point of view. However, we do not provide legal advice. 

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‍How can I answer really specific questions from my innovation or compliance teams? 

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‍What’s the size of the opportunity and do our T&Cs meet standards for data sales?

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‍Neudata’s consulting team can evaluate how selling data may work for you. We specialise in helping data owners become data vendors and look forward to helping you discover alternative revenue streams through innovation. For more information, visit our website or contact us.

Next blog post: How do I know if my business’s data is valuable?