Using real-time data enhancement tools, such as data cleansing tools with real-time verification and online resources that bring in outside information about customers, can make your data more accurate and more valuable to your organization.
In this article, I will examine how real-time data enhancement can be part of your data collection and maintenance strategy.
In my two previous articles, "Use these four methods to clean up your data" and "Data quality is vital to CRM or ERP user acceptance," I discussed the importance of collecting accurate data and techniques for cleaning your data.
An ongoing process
Data quality problems won’t go away with a thorough cleaning of your existing data. Data cleansing must be performed on a daily basis on all incoming data feeds. This is particularly true for data coming in over the Web. It has been found that at least 8 percent of Web-site visitors inadvertently make mistakes when entering their own addresses. Without real-time data validation, these mistakes can lead to service problems, such as products ordered online being delivered to the wrong address. To avoid such problems, data cleansing must be an ongoing process. Fortunately, data quality tools can help.
Data quality tools allow users to add lookup and verification routines to both their desktop and Web applications that will allow for real-time verification of such things as addresses and area codes. The tools can also be used in conjunction with an online service for real-time point-of-entry data verification against outside data from commercial data compilers.
Go beyond data validation
Most data quality tools, however, go beyond real-time data correction and validation—they can also be used to append information from outside data sources in the same way they ensure data accuracy. For example, do you need to know your customers’ music preferences or whether they are in the market for a car or second mortgage? Surveying customers and prospects can collect this information, but it must then be entered manually into each record.
In general, companies have found that surveys do not produce satisfactory information for every record; thus, most companies prefer to use data cleansing tools that add outside data from commercial data compilers to enhance their data stores. These tools not only use outside sources to complete missing information, but they also can append new data. Some operate in real time over the Internet.
What types of information can I append to my existing data?
Data quality tools can be used to deliver a variety of external information directly into business applications. For individuals, they can append demographic data such as age, presence of children, income, education level, and marital status. For businesses, they can append sales volume, number of employees, and SIC codes. In addition to correcting apartment or suite numbers, missing address elements, telephone numbers, and county codes, these sources can also be used to add other geographical information such as latitude/longitude and political districting. They can also add behavioristic data such as credit worthiness, preferred communication channels, purchase frequency, and monetary value (RFM). Other types of data that can be added include the following:
- Psychographic data (such as hobbies, interests, and political affiliation)
- Event-driven data (such as a marriage or birth of a child)
- Computed data (such as credit ratings, lifestyle clusters, lifetime value calculations, and responsivity scores)
For lowered costs and increased accuracy, many outside data compilers provide a combination of one or more of these data types. One widely used source is R.L. Polk & Co’s Lifestyle Selector, which compiles self-reported lifestyle preferences, income, and other data that has been gathered from customers via product registration cards. Polk also compiles data from state motor vehicle registrations, phone books, and other public records. Other popular data sources used to append data in real time are TRW, which compiles public financial records, and Trans Union, which compiles credit data from banks, retailers, and auto dealers. You can also subscribe to multisourced enhancement files from companies like Acxiom Corporation (InforBase) and Metromail, which combine data elements from many outside data compilers.
Benefits of real-time data enhancement
Real-time data enhancement can be used to construct more accurate customer profiles and predictive models for sales and marketing. For example, tools that match your existing records to the National Change of Address (NCOA) database collected by the United States Postal Service can append a Deliverability Index Code that can be used to predict which addresses will actually receive a mailing by identifying vacant, undeliverable, and seasonal addresses. Combining seasonal and vacant address information with key demographics from other data sources can be used to distinguish transients with no permanent address from wealthy consumers with one or more vacation homes.
Another benefit of real-time enhancement is its use in online personalization. Here, real-time data enhancement can be used to generate promotions tailored to the customer during each online visit.
Does your organization use real-time data enhancement tools? If so, are you required to support them? Post a comment or send us a note and share your experiences.