What is the biggest source of waste for many businesses? Few would guess that at many companies it is ineffectual sales and marketing efforts resulting from poor database management. If the contact information for prospects and customers in a company’s database or CRM system is muddy, missing or just plain wrong, it cannot be used effectively for sales or marketing. Bad contact data also makes it impossible to effectively service existing clients. Data quality is crucial to operational and transactional processes within every enterprise and to the reliability of business intelligence and reporting.
Yet, maintenance of contact information for both prospects and customers is one of the most neglected, mishandled and inconsistent processes at many companies… and for good reason. Managing such ever-changing information is a tedious, difficult, thankless and never-ending job. Database managers are seldom praised or promoted for maintaining impeccably accurate records. Yet, if neglected or even ignored completely, dirty data can be the biggest source of waste at any company. Think of the wads of money and time that go down the drain by sending emails, letters, mailers, catalogs, promotions or newsletters to bad addresses… year after year. An unmaintained database will significantly reduce the impact of most marketing efforts and waste the time of every salesperson and leader. It is a shame to implement sound business development strategies for cultivating relationships with people who are ‘unreachable.’ The question is: how can a company achieve consistently clean customer data?
Data Hygiene and List Validation… It’s a Process
If there is one constant in life, it is change. Customers move and change their addresses. Prospects change jobs. People change their Internet Service Providers and email addresses. Contacts change phone numbers. Colleagues get promoted and change positions. Change makes data dirty. Data can also become dirty due to a number of other factors including duplicate records, incomplete data, and the improper parsing of record fields from disparate systems. Errors can be introduced at any stage as data is entered, stored and managed. Given that, it could be argued that is impossible to have a database of client/prospect contact information that is 100% accurate. Perhaps. Even a database that is 100% accurate today is bound to have a few errors by the end of the month… or even the end of the week. Having clean data – meaning not only accurate but complete information — is a moving target. But it isn’t a pipe dream.
The first step is to understand that it may not be possible for mid-sized and large companies with thousands, tens of thousands, hundreds of thousands or even millions of contacts to have 100% accurate data in its CRM systems or customer databases. Instead, the goal should be to be continually improving data accuracy and completeness. If a database has a 10% email bounce rate, the goal should be to reduce that to 5% and then keep improving on that. If a CRM system’s contact list has a 12% return rate on direct mail campaigns, the goal should be to halve that.
How? Data hygiene is the collective processes conducted to ensure the cleanliness of data. It is a continuous practice, not a one-time exercise. Data is considered clean if it is relatively error-free. The first step is data scrubbing. Also called data cleansing, this is the process of amending or removing data in a database that is incorrect, incomplete, improperly formatted, or duplicated. Typically the process involves updating it, standardizing it, and de-duplicating records to create a single view of the data, even if it is stored in multiple disparate systems. For street addresses, the database list can be checked by giving it to a mail house which can then have it checked by the United States Postal Service for physical address validity.
It is even more imperative to regularly cleanse email lists. A bad email list can not only drag down sending performance but also tarnish the sending company’s reputation. If a company deploys an email campaign to a database list that has an excessive number of bad email addresses, it will have a significant impact on overall email delivery of that campaign and future campaigns. It is estimated that bounce rates of over 1% experience a significant decrease in deliverability by ISPs. High bounce rates can cause domains to reject email or send those emails to a spam folder, which typically is not viewed by recipients.
For email addresses, there are two parts to the cleansing process. Step one is to check a list for bad addresses (which is part of the data hygiene process). The process includes checking for spam traps, decoys, moles, etc. Step two is to check the list for good addresses, also known as email validation. This process involves checking the list to ensure emails are properly formatted, valid and deliverable. In both processes, bad email addresses are either fixed or removed. Reputable companies that do email validation will also check the database list against suppression lists. They check at the individual and domain level. They check if an email address is well-formatted, if the domain exists, if the domain has a designated mail server (MX record) and if the IP address belongs to a domain name. Likewise, they check if mail servers are ‘listening.’
Even after an email list is clean, there is no guarantee that emails will get through to every recipient. ISPs are forever changing the rules on email deliverability and what they flag as SPAM (undesired, unsolicited emails – which are illegal). Just having valid email addresses is no longer enough. Clients and prospects in a company’s database that receive email are increasingly being expected to ‘engage’ with that company’s email. What constitutes ‘engagement’? Recipients will demonstrate behaviors that indicate that the email was wanted such as:
- opening the email
- clicking a link in the email
- forwarding the email
- reopening the email later
- taking a screenshot of the email
- printing the email
If there is no engagement over time, company emails will stop being delivered into those recipients’ inboxes.
Companies that consistently send emails to bad addresses eventually get black-listed by ISPs. That means that a company’s emails to all email addresses for that ISP will bounce or be sent to the SPAM box. Each company (email sender) has a score from zero to 100 that ISPs use to gauge if that email sender is white-listed or black listed. To check a company’s score, find out the company’s IP address from the company’s email service provider. Then check it at www.senderscore.org. Any score under 90 indicates a need to cleanse and validate the email list.
Database lists should also be cleansed for titles, occupation/industry and phone numbers. Companies wanting to do segmented marketing will need contacts to have valid titles and/or occupations in order to be able to able to target select audiences.
Once a database has been scrubbed, it is important to implement strict policies and controls for entering new contact information and then regularly monitor existing data on an ongoing basis. It is also important to provide easy-to-use tools or a simple process for users to update data.
Given the time and money spent on sales and marketing – by snail mail, email and phone – shouldn’t those efforts be as fruitful as possible? After all, every company is competing against the rest of the noise-filled world for a potential customer or client’s attention. For a company to be successful in today’s tech-driven marketplace, smart companies will invest time and effort to clean and maintain its databases and CRM systems. The investment will pay big dividends in better sales and marketing results.
Quote of the Week
“We’re entering a new world in which data may be more important than software.” Tim O’Reilly
© 2014, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.