Each year, invalid data has a tremendous impact on U.S. companies, contributing to nearly $3.1 trillion in losses1. How does this impact your company? Consider the variety of key identifiers stored in your customer database (CMS). Chances are address data makes up a large portion of your customer data— and for good reason. Regardless of what industry your business falls into, mailing materials out to clients is undoubtedly a primary method that you use to reach customers and effectuate your business and marketing strategies.
But what happens when the address data stored in your CMS is outdated, mistyped, or just generally invalid? Below, we’ll delve into the true cost of invalid addresses in some of the leading industries in the market—and what you can do to minimize these complications by enhancing the quality of your data today.
1. Retail
Invalid address data costs your business both time and money—especially if your company falls into the retail realm. With the growing rise of e-commerce, you’re likely to find that a large portion of your sales are increasingly occurring online. Following the restrictions imposed by the COVID-19 pandemic, customers are now venturing away from brick-and-mortar stores and turning to a virtual experience. While the growth of online shopping may be good news for your sales figures, this transition means that valid address data is becoming increasingly vital for business growth and success.
If your CMS hosts invalid customer addresses, it can have a significant impact on your out-of-pocket costs and customer satisfaction rates. Several expenses you may incur include:
- Shipping and printing costs
- Lost material and replacement item costs
- Additional labor costs
Investing in data management for retailers is the ideal way to prevent the occurrence of these issues by ensuring data validity from the start.
2. Financial Services
Did you know that 33 percent of prospect data in financial institutions is considered inaccurate in some way? Chances are, a portion of the customer address information hosted in your database does not reflect the current address of these users.
For those operating in the financial sector, gaining the trust of your clients is of the utmost importance. In sharing private personal data with your institution, your customers expect their data profiles to reflect their actual address and general personal information. For any business operating in the financial industry, the possession of incomplete, invalid, or duplicate data increases their likelihood of confronting regulatory infractions. Incorrect customer data makes it easier for your business to experience fraudulent activity, too. To ensure compliance and provide excellent customer experience, investing in data management as a financial institution is a necessity in today’s digital age of operation.
3. Education
Every year, approximately 40 million Americans move to a new location.2 When students graduate and become alumni, they’re even more likely to change their address as they move out of their childhood homes, explore new cities, and move to new locations while adjusting to their new careers. For this reason, education professionals may witness an everchanging address database that requires extra attention to detail.
What is the cost of inaccurate address data for universities? Since accurate student addresses are necessary to contact alumni for communication updates and donation opportunities, invalid addresses hinder your ability to stay in touch with graduates—an act that is necessary to foster long-term relationships. This can result in missed opportunities for alumni donations, ineffective marketing campaigns, and general financial losses as a result of wasted shipping supplies and postage.
Since secretaries usually resort to manually entering thousands of student data into your CMS, investing in a data quality platform for educational institutions can significantly enhance employee productivity while boosting the accuracy of user information in the process.
4. Insurance
If your business is centered in the insurance industry, you’re likely to find that invalid address data is an issue that’s causing a financial impact on your business, too. But how? Insurance agencies rely heavily on policy retention and renewal in a field where they face steady competition. To retain clients, it’s crucial for businesses to reach them effectively the first time they ship out marketing materials and personalized mail.
Insurance companies witnessing address validity issues can confront thousands of dollars wasted in unnecessary printing, postage, and labor expenses that hinder their ability to maximize profits and reach their target audience. The time required to correct data issues also negatively impacts employee and agent productivity, too. Investing in a trustworthy address validation system can enhance customer service and minimize unnecessary expenses—a win-win all-around.
Experience the benefits of verifying addresses in your CMS today
At Experian, we leverage delivery point validation to verify mailing addresses and ensure the validity of the data stored in your database. Our system scans addresses for formatting issues, spelling errors, and mismatched data so that you can accurately reach your clients the first time around—an act that boosts your customer satisfaction rates and maximizes your bottom line.
Ready to explore the benefits of address verification?
1 https://intelligent-ds.com/blog/the-real-cost-of-bad-data#:~:text=IBM%20has%20estimated%20that%20bad,12%25%20of%20its%20total%20revenue
2 https://www.jchs.harvard.edu/blog/who-is-moving-and-why-seven-questions-about-residential-mobility
