Data Enrichment & Validation

Working out the Real Impact of Poor Postal Address Data Quality

December 21, 2021

Organizations lose from 10 to 14 million USD annually because of data inaccuracies. Around 80% of companies believe data issues might have affected their revenue. Yet, the impact of poor data quality goes beyond finances. The reputation and business operations of companies also suffer. Due to unreliable records, businesses cannot perform to their best capabilities. They face misdeliveries, data leakages, unsatisfied customers, and other problems.

Such data quality issues frequently happen with postal addresses. Postal address data quality is more difficult to maintain than emails or personal details. As a result, inaccurate postal addresses significantly affect businesses.

If you depend on postal address data quality, this article should help you find ways to enhance it. Learn the real impact of poor data quality in terms of postal addresses.

Discover 3 Ways Verified Postal Address Data Is Tied to Business Growth

What is Poor Postal Address Data Quality?

Poor postal address data quality means inaccurate, incomplete, misleading, or outdated addresses. These are unverified records that cause misdeliveries. Besides, companies cannot use them for identity verification during KYC or AVS checks.

Low postal address data quality is usually the result of missing address verification procedures. When businesses collect customers’ contact details but don’t check them, inaccurate entries pile up. Inconsistent verification is another common reason behind poor postal address data quality. Since people and organizations change their addresses, regular checks are essential to prevent bad data.

Poor Data Quality Case Study

Here are several cases to show you what causes low-quality postal address records and how to deal with them.

Poor Data Quality Case Study #1. E-commerce store

An e-commerce store collects addresses at the checkout to verify payments and manage delivery. Since there is no address autocomplete on the website, buyers enter all information manually. Hence, they are more likely to make mistakes and typos. Because of this, the store ends up with bad postal address data and suffers from misdeliveries.

Solution. The e-commerce store should use address verification and autocomplete API. They can integrate it with their platform to embed automated postal address suggestions and checks. It will facilitate data sharing for buyers and increase the accuracy of postal addresses.

Poor Data Quality Case Study #2. Financial organization

A financial organization manages a postal address database to verify customers’ identities and deliver documents. They have created it long ago and don’t have the tools to update the entries. As a result, the reliability of postal addresses declines after some time. Critical documents often don’t reach the destination, which leads to data leakage. When the public learns about it, the organization’s reputation severely suffers, and it starts losing customers.

Solution. To reduce the negative impact of poor data quality, the financial organization should introduce regular checks of existing postal addresses. At least every 90 days is a standard. It will allow them to eliminate outdated records and deliver financial documents securely.

Why is Poor Postal Address Data Quality Bad?

We all know we must care about postal address data quality. But why does it matter? Apart from direct financial losses, bad postal addresses lead to other problems.

Compromised Productivity

Around 30% of analysts spend over 40% of their time validating data before it’s ready for use. These numbers illustrate how unreliable information can affect your productivity. When you are sure that records are accurate, you don’t have to double-check everything. It allows focusing on more critical tasks and strategic decisions. Since postal addresses are usually shared with multiple teams across a company, their quality is crucial for many everyday processes.

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Reputational Impact and Data Security

If a company consistently misdelivers direct mail, it affects the image. Consumers start doubting the reliability of such a brand and get irritated. Besides, if you are unlucky enough to reveal personal information, everyone will know about it. Data leakage is a serious issue that can ruin your reputation forever.

Limited Automation Capabilities

Every modern business needs automation software to survive. Without it, you won’t compete with other companies in productivity, marketing, and sales. When address data has low quality, it reduces the efficiency of automated systems. You face more errors, and automaton capabilities become limited. Hence, before adding a record to your system, make sure address verification software parses, standardizes, and validates it.

Negative Customer Experience

Consumers expect quick order delivery and accurate mailings. They also don’t want to type their address manually to buy something or verify the payment. Hence, if you don’t have automated address validation and autocomplete, get ready for more dissatisfied customers.

Financial Losses

This consequence of bad data is an obvious one. When you cannot reach the destination on the first attempt, you need to make another one. It takes additional time and money. Hence, the more mail misdeliveries and delays a company faces, the more it loses. Learn how bad postal address data quality can eat into your budget below.

The Cost of the Impact of Poor Data Quality

The real impact of poor data quality depends on the number of addresses you store and use. If you deliver thousands of mailings and use identity verification every day, the cost of bad data can be enormous.

Overall, bad postal data leads to additional expenses in three ways:

  1. The actual cost of poor postal address data quality. This category includes direct losses from misdelivered orders or mail. For example, if the cost of a misdelivered order is $10 and your company sends 7000 parcels monthly with a 5% misdelivery rate, you lose $3500 monthly. To cut the expenses, you need to enhance the accuracy of postal address records and mailings.
  2. Cost of inspections related to operational issues. When something goes wrong because of information inaccuracies, you need to spend money on the investigation. You have to find at what stage of data processing the problem occurs.
  3. Fixing inaccurate address records. The cost of correcting one record can reach up to $100. If you have 10,000 records, 10% of which have mistakes, troubleshooting will take $100,000. That’s why it's better to invest in automated data verification from the start. Prevention over inspection, remember?

The cost of reputational and data leakage losses is a separate category. Even though they don’t happen often, you should keep these risks in mind.

Hence, if you try to calculate the real impact of poor data quality, you must consider many aspects. There are both direct and indirect losses to factor in.

Read About Choosing Your Perfect International Postal Address Verification Provider

Inkit Verify for Ultimate Postal Address Data Quality

Verify is an address verification and autocomplete API powered by Inkit. Integrate it with your web solution to implement automated real-time address checks. As soon as a user starts entering a postal address, it shows verified suggestions. This way, Verify enhances user experience and makes your address database more reliable to cut expenses. You can also use it to re-check your existing records and fix mistakes.

Learn more about Verify features here and start for free to test it now.

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The easiest way to automatically generate and manage paperless documents at scale.
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