Davidson Design Co. © 2014
by Tom Davidson
If you’re not a data geek and don’t fully understand the importance of keeping your company’s customer data in pristine condition, data scrubbing can seem like a real chore.
Each plays a vital role in producing effective mailing and generating reliable annual revenue forecasting. The effects of clean data can be felt in the billing department hospitals, by an insurance company’s sales team or in loyalty, retention, renewal, and reactivation mailing programs. If you haven’t done it in awhile, it may be time to take out the wash.
But what are the dangers in allowing your dirty data laundry to pile up? Consider this. Every year, the US post office states that on average, that 1.3 million people change their residence. Moreover, 33% of the people who move don't report their new address to their data.
It's no wonder Experian reports most US organizations and businesses believe 1/3 of their customer data is inaccurate while as much as 23% of their annual revenue opportunity is literally going down the drain. That's why regular data cleansing is so important. But to fully appreciate these insights, let’s dispel a few myths first.
Bigger isn't always better.
While researching for this article, I learned from CMO how his company’s agency vendor reported recent program marketing results generated 6.8 trillion impressions over the previous year. But the CMO pointed out how this would imply everyone on the planet saw the company’s news feature at least 10 times. The agency was laughed out of the office.
Turns out, the agency’s “impressions” count included every single Facebook posting as “2.5 million impressions,” since there were 850 million people signed up on Facebook at the time, and they were using a 3x multiplier.
I thought that was funny until I discovered this example . . .
Numbers don’t lie… unless you’re one of 17,000 Men are Pregnant!
Due to incorrectly entered medical codes, a network hospital discovered they had mailed thousands of men who apparently required obstetric and prenatal exams.
In fact, these men had gone to the doctor for procedures with similar codes to obstetric services. But a few misplaced keystrokes here and there added up over time. These seemingly simple errors caused disastrous results in billing, claims, and regulatory compliance. Funny? Yes . . . but costly too. Just like this next one.
The lights are on, but nobody's home.
I remember working with a well-respected organization who I would later discover, hadn’t updated their data records in over 5 years. As you might expect, one-third of the company’s customer data was incorrect due to change of address and deceased records. Moreover, I pointed out how a majority of their mail radius sat in a highly concentrated summer tourism district. This area was comprised of mostly summer rentals and 2nd home property which sat vacant 9 months out of the year.
The combined results rendered more than 48% of their appeal mailings undelivered in the off-season tourism months.
The tourists had packed up and returned home. That's when the company’s
in-house mail processor chimed in. “I’ve been saying there was a problem for months. We got stacks of returned mail filling up two storage areas.”
Discovering nearly 50% of your mail budget is going down the drain can be a painful, costly mistake. But it really demonstrated that regularly maintaining data, is well worth the investment.
Let's connect: Tom@DavidsonDesign.com | LinkedIn.com
Most data managers consider routine data maintenance once a year. That’s good, but I recommend, 3-4 times a year depending on the file size and churn in your database. In the medical profession, the standards are much higher.
Where to start. Some of these things can be tackled on your own. Depending on the sensitivity of the data, you may also want to involve an outside 3-party consultant. Either way, I’ve listed a few resources below that you may find helpful. If you had a few data managers rotate on the files over the years, append coding styles can differ. In some case these append codes may be completely out-of-date rendering any data insites useless.
The bottom line is, if you are the CMO or Data Manager, you need to take an active role in defining rules of the road for appending and managing your data or you may never get the clear, accurate and reliable reporting your CEO, CMO and board members demand.
Here Are Some Data Cleansing Resources You May Be Interested In:
The big lesson here is don’t let routine data cleansing linger too long or you may be hanging your business forcasting out to dry.
Get this downloadable data maintance infographic for your files when you sign up for my Free Monthly Marketing Tips!