Opinion

The impact of bad customer address data

6 min read

23 December 2015

Customer information is the valuable, intellectual property and lifeblood of any organisation – yet almost two thirds of companies admit customer data is fundamentally flawed.

Jim ConningThe problems resulting from out-of-date, incomplete, missing and unvalidated customer data are broad ranging – from wasted marketing investments and promotional resources through to regulatory non-compliance and customer identity fraud.

At a time when contact and address data can be continuously and seamlessly validated and updated within core business systems, why are bosses putting companies at risk by continuing to use flawed customer information?

Data foundation

In the era of big data, the issues of data and data quality have become board level concerns. Yet in the excitement of capturing customer tweets and real-time web site interactions, too many companies continue to overlook the cornerstones of customer data: contact and address data. A recent survey commissioned by Royal Mail Data Services revealed the general quality of this essential dataset is poor. Almost two thirds of companies admitted to having out-of-date customer information, while 62.8 per cent had incomplete data and 60.1 per cent were missing data such as components of the address. 

Whether information is being used to drive operational performance and efficiency or to support strategic decision-making, the quality and consistency of customer data is critical. From initial point of data capture, customer data propagates critical business systems such as billing, CRM, marketing automation, and ecommerce. Failure to accurately capture and validate customer data from the onset will only lead to problems down the line. For example, how can a company ensure essential customer communication arrives at the right place, at the right time, addressed to the right person? Avoid expensive wastage of marketing and promotional activities? Or feel confident that they’re compliant with evolving data usage regulations?

Data on the move

With an estimated 11 per cent of UK adults moving house every year, it is perhaps no surprise that organisations struggle to maintain customer data accuracy. While in an ideal world every customer would update the companies they interact with about their address changes, the reality is that very few remember to update any but their key utility and financial services providers.

Indeed, even these companies can be overlooked by some customers – with a recent survey revealing that almost 70 per cent of home owners had received at least one piece of mail addressed to former residents and up to 15 per cent had received over 20 pieces of mail. Nearly half had also received a piece of sensitive financial mail for someone who used to live at the property. Given the fact that the number one method of identity fraud is account takeover, the implications of sending a bank or pension statement to the incorrect address are significant – for consumer and company alike.

With such a large proportion of the UK adult population on the move, organisations need to consider not only the risk of mis-targeted marketing activity, but the potential brand and financial damage associated with identity fraud. Keeping customer data up-to-date on a continuous basis is essential.

From the top

The inaccuracy within organisations’ customer datasets is not solely the result of a mobile population – far too many fail to validate information up front. Customer data needs to be accurate from the first moment it is captured. Whether via the website, call centre or face to face interaction, using automated address data capture and validation tools is key to ensuring information is accurate and complete from day one. 

Yet despite cloud-based address data capture and validation tools now being readily available, only four in ten companies automatically validate the data captured on a website or as it enters internal systems. Alarmingly, 21.4 per cent still have no validation process for customer data captured via the web, while 15 per cent fail to check data entered into their internal systems.

These tools are designed to be simple to use and easy to integrate with existing systems. The customer provides just a portion of the address, such as their postcode and the system immediately presents the addresses at that postcode, enabling the customer to verify the correct house name or number. The more sophisticated of these systems will also provide support for multiple occupancy residencies, enabling customers to confirm individual flat numbers as well as what’s known as Alias addresses; where, for example, No 2 Acacia Avenue has been named by its owner as The Manor House.

Conclusion

Improving initial data capture by automatically validating customer information when it is first collected is a fundamental component of creating a complete and accurate customer data quality strategy.

High quality customer data plays an instrumental role in the facilitation of informed business decision making. It also brings the added confidence that communications can be targeted effectively and marketing investment spent intelligently. Maintaining clean, up-to-date customer data does seem a small price to pay for avoiding risk and building strong, sustainable customer relationships.

Jim Conning is MD of Royal Mail Data Services