7 ways to capture clean data and maintain a reliable customer database

Posted on Nov. 05, 2015 by in Marketing solutions

Have you ever thought about how much inaccurate customer addresses cost your business? About what happens when your catalogues, shipments, flyers, invoices and emails don’t reach your customers?

Without even considering lost opportunities, bad data means that your company wastes money on marketing campaigns, faces lost opportunity costs and incurs operational expenses for collecting on invoices and refunding or resending shipments. The unfortunate reality is that this happens in most companies, due to outdated and inaccurate customer data—and the business cost may be as high as 25% of company revenue. But the good news is that you can do something about it. Good data capture, maintenance and hygiene practices will let you communicate efficiently and market more effectively.

Clean data delivers optimal return on investment

The most compelling reason to capture and maintain clean data is that it boosts your ROI. Using accurate data means you won’t waste money sending marketing, billing or other types of communications to customers who have changed their email address, home address or provided incomplete information—inaccuracies that reduce your ROI.

“The moment your response rates drop due to inaccurate data, that’s when you have the biggest impact on your return on investment,” says Nick Psychogios, Director, Data Products at Canada Post. In addition to wasted marketing dollars, operational costs increase when mail doesn’t reach the intended recipient. These may include labour costs for handling returned parcels, re-stocking inventory, manually processing invoices or refunds, plus goodwill costs from the negative impact on customer relations.

Marketers typically see about a 5% increase in ROI when they clean their data before mailing, according to a 2009 study conducted by the Canadian Marketing Association and Canada Post. Larger-scale mailers can see much more: Marketing Sherpa reports that one U.S. magazine publisher revamped their database, eliminating duplicate records for the same customer and correcting errors in address information. These improvements allowed them to better segment their direct marketing, resulting in a 25% lift in response rate and 200% boost in ROI.

Moreover, maintaining accurate and relevant details about your customer, such as purchase history, give you insights into buyer behaviour that can be used for customer segmentation and targeted marketing, which also improves ROI. In fact, over time you can collect additional details about preferences and behaviours that you can use down the road to create highly personalized offers and communications.

Capture clean data from the start

The best way to ensure accuracy in your database is to collect good-quality data from the start. Good data capture practices and regular validation during customer interactions will help give you a solid base. Here are some best practices for collecting good, clean data.

  1. Consider every customer contact an opportunity to collect or validate data.
    Whether online, on the phone or in a store, if your business is interacting with a customer you can collect data—either to validate existing information or to add depth to your database.
  2. Make it easy for customers to give you information.
    Collecting data online, in retail or at a call centre? Make sure your forms are easy to use. And think about the data you’re asking for: Asking for more than you’ll use wastes your time and your customers’ goodwill.
  3. Collect data in a standard format across all points of capture.
    Be the forms you use online and the forms your call centre staff use are capturing the same data in the same format. Build forms that will give you standard data output (for example, using checkboxes and drop-down lists, rather than text input fields).
  4. Validate information as it’s being captured.
    “Keystroke errors are very high,” says Psychogios, especially when capturing data on web forms. To improve accuracy, add tools to your forms that validate formats (such as 10 digits in a phone number) or verify accuracy (such as addresses). It’s also a good idea to have phone reps check key information with customers when they phone it, and correct any inaccuracies.
  5. Validate email addresses extra-carefully.
    Reduce email bounce rates by confirming the email address they provide. Have the customer enter the address twice, ensuring the entries match or consider using a double opt-in process, to confirm the address is real. Email addresses captured at point of sale are particularly prone to inaccuracy, so be sure to confirm them in person or with a confirmation email.
  6. Collect ‘nice-to-have’ data over time.
    Ask customers for profile-type data slowly, a bit at a time. Incent them to provide the information or try conducting a survey. Correlate this information with their purchase history to develop rich insights.
  7. Follow privacy laws when collecting, storing and using data.
    This includes Canada’s anti-spam legislation (CASL), the Personal Information Protection and Electronic Documents Act (PIPEDA) and similar provincial legislation. Be sure to have a company privacy policy in place, and be accountable to your customer for what you’ll do with their data.

Keep your data fresh with ongoing maintenance

To keep your data up-to-date, take advantage of repeat customer contacts (such as support phone calls and web transactions) to validate the information you have on file. It’s also a good practice to offer customers opportunities to update their information, such as contact information and email preferences. Provide a self-serve web form, tear-off slip on invoices and regularly remind customers to update you if they move.

You must remove unsubscribes from your email list promptly to comply with Canada’s anti-spam legislation. Removing unsubscribes and bouncebacks will also keep data fresh and maximize response rates. And it’s a good idea to track non-responders so you can segment your engaged and unengaged audience for better targeting.

Spring clean your mailing list regularly

No matter how well you capture data, you should still clean your lists regularly—certainly before communicating with an inactive audience, and at least once a year. It doesn’t take long for data to become out of date: people move, change email addresses or phone numbers and, unfortunately, pass away. “Most companies don’t even realize they have inaccurate, incorrect, old lapsed addresses for their customers,” says Psychogios. Canada Post reports that 140 million pieces of mail a year don’t have the right address and don’t reach their intended recipient. “At an average $1 per piece for admail, that’s $140 million that’s been wasted by marketers,” he adds.

Data hygiene services update mailing lists by removing duplicate addresses, fixing incorrect address information and standardizing the format. Canada Post Data Management Services can even append missing information (such as apartment numbers), update your list with new addresses for people who have moved and flag deceased customers. Using a data hygiene service will cost you a few cents per record—small in comparison to the typical $1 per piece for a direct mailing, and worthwhile when you consider the lift it will give you in response rate and overall ROI.

The biggest sources of bad records in your database are outdated information, duplicate records and incomplete data. With good data capture practices, vigilant database maintenance and regular data hygiene, you’ll have a strong database you can rely on for communication, customer insight, segmentation and targeting.

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