Vanquishing data decay
4 min read
13 March 2014
In the UK, data decay remains one of the biggest challenges for businesses with poor data, draining the average company about £4.9m annually. In a typical year 1.2m of the UK population will move, 600,000 people will die, a quarter of a million people will move to the UK and the Royal Mail will make more than half a million address changes to PAF (its Postcode Address File of 29m UK addresses).
When faced with these overwhelming statistics it is not surprising that a customer database, that is not well maintained, will decay at the conservative rate of 20 per cent, and possibly as high as 30 per cent each year. Within just five years such a database will contain no valid or usable information.
The cost implications of data decay are significant for a business. For example, a company sends out its glossy corporate brochure en-masse to its entire database of 100,000 existing and past customers. If each brochure costs £1.25 to print and a further 69p per item to mail out, the minimum annual wasted financial cost to the company if 20 per cent of the data has decayed will be in the region of £38,800 for materials and postage alone.
In addition to the financial wastage the long-term damage to the brand image cannot be underestimated. Negative perceptions will be generated by formerly loyal customers who desire the brochure but fail to receive the new one and those who receive the package but with incorrect name or address details. In an age when the public have become highly protective of their personal identity data, making an error on the envelope, covering letter or email can bring trust into question. And, of course, the environmental implications of wasting such high volumes of printed materials are not aligned with the corporate and social responsibility customers expect of the businesses today.
As with all things in life if you maintain things correctly they will serve you well, and having a data quality management (DQM) strategy in place is an essential for every customer data driven business. From day one it is vital to instil processes and implement technologies that ensure the right data is accurately captured at the point of entry, whether it is the telephone, ecommerce website or EPOS for example.
However, this data must be regularly cleansed, screened and de-duplicated against all available and relevant reference files before a communication is sent. The PAF and the edited Electoral Roll are obvious files to use for mailings in the UK but there are others like AddressBase Premium, a new authoritative file developed by GeoPlace that contains 34m addresses, including geocodes that are accurate to one metre as well as unique identifiers (UPRN). Suppression files like the National Change of Address or Gone Away Suppression should be used to flag the people no longer living at an address; similarly the mortality and bereavement register will identify individuals that have passed away.
Businesses should also ensure records are cross-referenced with the Telephone and Mail Preference Services for subscribers who object to receiving telesales calls or unsolicited mail, and for those undertaking cross-border multi-channel communications it essential that international addresses, emails, and landline and mobile numbers are validated.
These files and technologies are accessible and affordable for companies of all shapes and sizes. Those with large databases and high volumes will benefit from investing in in-house DQM software whereas others with more infrequent needs can take advantage of the same technologies using the lower relative cost of cloud services.
A customer database is a living thing. A well-maintained database will deliver great business benefits, providing sales, marketing and customer service teams with competitive advantage. Fail to give it the attention it needs and it will eventually decay and prematurely die, meanwhile the costs and repercussions will long continue to haunt the business.
David Green is director of ID Registration GBGroup.