What's the value of value-add?

Moderated by Lee Greenhouse of Greenhouse Associates. Panelists: Diane Corrado, Walters Kluwer Health; Tom Brown, LexisNexis; Joe Jaksha, Thomson West.

Lee: "Is the value of content declining?" Tom: "In some regards, if we're preventing a case of identity theft, you can argue that the content is adding value. To maintain a certain value proposition you should really keep adding to it, enhancing and improving the consumer's experience." Diane: "Although my customers want a robust platform, they tell me content is king, and without the right information it doesn't matter how good the platform is. In the medical space, it's vital." Joe: "You have to have content - as the table stakes - and then build on top of it. Customers expect that to be there before you even open the door."

Lee: "historically, how has West added value to content?" Joe: "Historically it was codification of the legal system. Created a de facto standard before standards were created. In the 70s and 80s it was about aggregation. But that's become the table stakes as well - in the 80s it was integration, cross-linking. Focus on the specific customer, lawyers and legal professionals - how do you wrap that package with sophisticated technologies and a service model that supports it."

Lee to Tom: "What's the nature of content in your business and how do you increase the value of it?" Tom: "Evolving the data to reflect the economy and behaviors that are present. Cell phones, for example. There's an expectation that this is available. Identity theft has been perpetrated throughout the economy - there's an expectation that fraudulent addresses will be notated - that's an expectation that customers have." Lee: "You guys deal with the lowest form of life - public records." Tom: "The challenge is to resolve the public record so that banks, government and law enforcement can use it...In my world, I'm responsible for the products we offer to banks - we help them solve money laundering and terrorist financing. The essence of that is helping them to know the individuals they're doing business with. We also help prevent identity theft - a growing problem and only going to get worse as the economy deteriorates. We also help identify the 'underbanked' so that credit can be extended to them on terms that are acceptable to the consumer." Lee: "This is all from mining data." 

Diane: "I think what's happening in legal and medical industries is that you'd walk up to the librarian's desk, bearing a gift, hoping they'd shine a light on you and help you do your research. But it's moved out of the library and into the hands and devices of people doing the research. Information has to be fast - we're different from Google, in that you don't want 12,000 hits but you want one hit, or five, or a manageable number. Getting the information you're looking for, with as few clicks as possible, without the intervention of a librarian....We use a process called contextual design; most companies who interview their customers run a simple interview, but contextual inquiry allows us to sit in your office for a couple of days and watch you work. Henry Ford said if you asked people what they wanted, they'd say, 'A faster horse.' One of the good examples I could use is that we'd question users about their eye-rolling, and they'd deny it - but we noticed that the search results they wanted were at the bottom, so when we got the search results closer to the top, their fatigue went down 60%."

Diane points out that they are not just publishers, but aggregators. Databases, journals (peer-reviewed and scientifically proven).

Lee to Joe: "What's next for Thomson West?" Joe: "The information units have been focused on smaller information bites - it's not books, or even the full case - and where that wraps into the ability to monetize is where you can take that piece of information where you can present it in different contexts; that's where we are really focused."

What's the impact of adding value - are you running faster just to stay in place? - Joe: "There's an expectation that you continue to add more for the same price. But the bigger part is making it sustainable - it changes the way our customers do their business and becomes a critical part of the way they do their business, where it's woven so deeply into what they do, so the cost of changing is prohibitive."

Tom: "Do you add coverage, content on individuals that are hard to have info on - how do you do that? If you're just providing redundant information, that'll be of less value. We're also looking at new applications. With the underbanked, we aggregate a lot of data so that the underbanked can be assessed from a credit-worthy standpoint just like everyone else. That's a population of 75MM people that are unattainable to the financial sector."

Diane: "We spend a lot of time talking about the customer's customer and what their needs are. Many people who use our data are doing it on behalf of someone else."

Tom: "Becoming more relevant to the customer means you bring more value to them."

Lee to Joe: "You're a product guy - you're not going to let these sales folks get away with that!" Joe: "I think the percentages vary by project - we're focused on taking the time and effort to do things that are hard. If it seems like too quick of a win, it might not be sustainable. We're looking at some investments in our core capabilities that are extensive and expensive - but which would be difficult for a 'free' content provider to create with open source code." Examples of "the hard stuff" - "the unique blend of 'brute force editorial' and some of the higher end AI capabilities and how do you uniquely combine those in product offerings with a knowledge of the customer?"

Lee: "How is service a part of the value-add?" 

Joe: "One of the things that we see is that our customers have a high degree of expertise in what they do, but when they get a request slightly out of that area, they need help." 

Tom: When you misjudge the value that the customer is placing on the product or service, you can overengineer the solution and give them more than they need - so they won't pay for it.

Diane: You also have to be aware of what the competition or coopetition is doing so you don't invest a lot.

Question: "how do your customers define value - what is their willingness to pay?" Diane: "it falls very succinctly into categories: productivity enhancement; if you can enhance my relationship with my customer or profitability; they will also pay for something that saves them expense - if it consolidates two or three things into one thing, you'll get them to pay more."

Question: "how you feel about content as a value add - what kind of content is a value add?" Tom: "It's vital." Joe: "It's that content creation has become an expectation. The definition of content has broadened in terms of the metadata associated with content - the context around that particular article, the metadata becomes extremely powerful content that is not physically attached to that document." Diane: "What we're seeing is that the content's there - everybody's a publisher now - the problem is how do you sift through that to get through the relevant material? We're the vendors who are going to help you zero in on what you want and what you want it for."

Question: "To what degree does scale matter?" Joe: "Niche publishers who've found a focus in adding value to a particular area, that becomes less of a scale thing, and in fact it doesn't scale very well. When you start to cross verticals, it doesn't scale very well." Tom: "Scale's vital to give you the ability to respond. The challenge is relevance."