What are Firmographics?
Firmographic data is the counterpart of demographic data with the difference that companies, instead of people are at the focus. Firmographics shed light on the characteristics of firms and help to cluster them into different categories and segments. Firmographics are often used in combination with B2B contact data by marketing and sales organizations to better address their existing and potential future customers.
What are typical firmographic attributes?
Firmographic data, also called firmographics, are generally only relevant to B2B companies that interact with other firms. Firms can be defined as a legal entity that can be anything from non-profits to global corporations, to legal practices, to contractors, retail shops or governmental institutions. For global corporations, such as Fortune 500s, even lines of businesses, divisions or countries can be individual firms in terms of firmographics. Typical attributes of firmographic data are:
- Legal status (public, private, non-profit, NGO, Inc., Llc. )
- Location (region, country, state, city, zip code, address)
- Industry (SIC, GICS, NAIS classification codes)
- Company size (revenue, employees, SME, enterprise)
- Performance (sales, profits, credit rating)
- Structure (headquarters, company parents, subsidiaries)
How to use firmographic data?
The use cases for firmographic data or firmographic appends depend on the company and the strategy behind it. However, in general, B2B organizations leverage firmographic data to improve their communication with potential and existing customers by tailoring the message to the specific B2B segment.
Marketing teams in B2B organizations are especially hungry for firmographic data. Companies, that have an inbound lead model can enrich their incoming leads with firmographic targeting. That way marketing can instantly evaluate whether a lead is high priority and should be forwarded to the sales team or not. Firmographic information, in essence, helps to automate the lead qualification and lead scoring processes in many companies so that VIP-leads get forwarded to the most senior sales executives in an organization. Another large use case for marketing is that firmographic information enables account-based-marketing. This means that, by using firmographic data, marketing can push tailored campaigns with tailored messages to several specific and different target segments. In that way, marketing is enabled to communicate the value proposition that resonates most with a single prospect and increase the chance of pushing the lead further down the funnel. In combination with audience data, marketing departments can uniquely target employees at companies with advertisements.
Sales organizations use firmographic data to identify firms that could become paying customers in the future. In addition, firmographic data can help sales departments to set-up their organizational structure. The structure of sales teams can be based on specific industries they want to target, for example, restaurants or cinemas. Another way to structure the sales organization could be by company sizes (SMEs vs. enterprise sales) or regions (America vs. Asia). In practice, a combination of those elements is often the preferred way for international sales departments to structure themselves. Firmographic data can help companies tremendously, especially if they are expanding their regions and markets.
Strategy and market intelligence teams at B2B companies are another group that is eager to put firmographic data to use. High growth B2B companies that are scaling quickly are often looking to expand their products & services to different geographies or verticals. As strategy departments are often faced with highly complex and ambiguous challenges, relying on data to validate their decision-making is paramount. Firmographics come in handy for strategy departments to evaluate the potential of a green-field market or vertical to tap into and ultimately choose the best one with the highest upside potential and/or lowest business risk.
Data analytics & risk assessment
Financial institutions, such as banks, insurance companies, and rating agencies leverage firmographic appends to evaluate the risk profile of their clients. As performance data, such as annual revenue and profits are part of firmographics, these data sets are used to generate a risk profile of the organizations which affects the price and interest rate that financial institutions offer their clients.
Data analytics is an increasingly important field in the business world. By combining firmographic databases with B2B contact data, technographic data and B2B intent data, data scientists and data analysts are able to produce a 360-degree view of companies that they can feed to their internal marketing, sales and strategy departments.
How is firmographic data usually collected?
Firmographic data sources are mostly publicly available all over the world. Firms need to file their tax declaration and register in the commercial registry. Therefore, they are obligated to provide basic firmographic data, such as legal status, address, revenue, profit and more. The firmographic information provided is updated regularly by the companies, every quarter or up to once a year, depending on the size of the firm and the jurisdiction. Consequently, trade registries or local chambers of commerce have great databases for firmographics because they are the ones that own the original data. Other sources for firmographic data sets are data vendors and data providers that aggregate, cleanse, manipulate and polish firmographic data from different sources and offer it for sale, especially for private and public companies. Public firmographic data sources, such as a company’s website can provide the needed information as well, but this is less scalable than using the service of a firmographics data provider.
How to assess the quality of firmographics?
In general, the data quality standards in the category of firmographic data are high compared to other data categories. This is correlated to the fewer work firmographic data providers need for manipulating and cleansing the data. Nonetheless, as with B2B contact data, the most typical errors are invalid, missing and duplicate data.
What to look out for when buying a firmographic database?
As a data buyer, you should always request a sample from the data vendors to assess the data quality. If data vendors do not provide a free sample, it is a clear red flag. Make sure you also communicate very clearly and precisely the requirements you have for the data attributes to the data providers. Clearly defined requirements lower the chance of frustration significantly later on.
As a general thought, it can be wise to select one data vendor to engage with in a strategic partnership. If the data vendor also offers B2B contact data, technographic data and/or B2B intent data at a high quality, this diminishes companies’ internal workload of manipulating the data tremendously and allows the organization to put the data to use much faster.
How is firmographic data typically priced?
Pricing of firmographic data varies and depends on many factors such as:
- Number of data points needed
- Difficulty to gather the firmographic data based on location
- Difficulty of cleansing and manipulating the data
- The negotiation power of the buyer
Data vendors offer different pricing models and the buyers should have an ideal pricing model in mind, whether it is a licensing contract where the buyer receives the data quarterly/annually or a one-time payment to the data provider.
What to ask firmographic data providers?
When buyers engage with data providers, they should ask the following questions:
- How did you source the data?
- What data attributes can you deliver?
- Who are some reference customers?
- How do you ensure the quality of the data set?
- Which pricing models do you offer?