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When you want to enhance your customer data for targeted marketing or analytical purposes, approach it as a very important process. A data append mistake will make anything you do with that customer data inaccurate. There are several best practices you can follow to maximize the data append process by getting the right data, improving the match rate of third party customer data, and having it come out in a format that you will be able to use successfully and immediately.
First, decide how you want to use your own data after you add the appended information. Then clean it and standardize your records. Make sure your file complies with privacy and financial security policies. Pick the information you want to use to enhance your file, run the matching process and validate the results.
1. Understand the Data You Have Now
Firms that use order entry and shipping software as their customer collection tools will accumulate several types of data. They will have order records with names, addresses, phone numbers, e-mail addresses and payment information. They can also have billing records and shipping records with different names and addresses from each other and from the order records.
Look at the types of customer information you have and decide which type you will use for enhancement. Order records are most likely the best because they refer back to your customers, and not gift recipients or receiving warehouses.
2. Clean and Repair Your Own Data
Stick to more recent customers, no more than 36 or 48 months old—do you really want to spend money enhancing the records of customers who haven’t bought from you in years? You can standardize your file yourself with postal and data hygiene software or send it out for cleaning. You want first and last names, first and second address lines, states, Zip codes and phone numbers in their proper fields with the same formatting you would use for mailing.
Even if you don’t mail your file now, but might want to, performing postal standardization and change of address processing will make your file cleaner and more usable, and it will improve the match rate to the third party data.
Respect private information and your customers’ preferences. Drop any credit and private billing information you might have kept with customers’ records. If you have been collecting do-not-mail, e-mail or phone records through the mail or your website, apply that information and flag, suppress or delete the customers who don’t want to hear from you anymore.
3. Decide What You Want To Do With Your Enhanced File
Think through whether you want to create models and target customers by identifying the ones most likely to buy your products, or just screen customers on age and income for new offers. This brainstorming will help you decide whether you need household-level demographics—such as age, income, household size and educational level—or Zip code-level or census tract-level data about consumer behavior—such as following NASCAR, subscribing to gardening magazines or eating out regularly. These decisions will let you seek out one or more data vendors that can supply the right data to your marketing service bureau or perform the matching themselves.
4. Select a Vendor and Append Data
Choose a data vendor that can append the information you want. There are many firms that offer demographics, psychographics and lifestyle profile data. If you do not have time to research all of them, your list broker or service bureau is likely to have a data expert who can recommend the right source for your purposes. Don’t get too focused on saving pennies at this point. If the purposes for which you are enhancing your file include mailings, models and new customer acquisition, consider that you will soon spend more on postage to mail one customer or prospect than you are going to pay now to enhance a dozen records.
Don’t forget to document your file, what you did to it, what you want done and what you want to get back from the processing. If you have a quarter million records to start with, make sure you have a way to check that you will get back a quarter million records. Little slips or misunderstood instructions can result in dropped records, the wrong data element being appended or the wrong file format going out or being returned. Sharing your documentation with your data vendor and service bureau can insure that everyone knows what is expected and the steps you expect to be followed.
5. Test & Validate
Once you have cleaned your file and selected your vendor, run a test. Select a random sample of 5,000 records and ask the vendor to run them through the data append process to append the elements you want. This test will let you gauge how good the match rate will be for your full file. Matching will never be at 100 percent, but the test can let you know if the rate will be enough to produce a useful file—in the 60 to 80 percent range. And, because not all data elements are likely to be appended to all records, you will be able to determine how much coverage you will get of the data elements you want the most. Many vendors will provide a free test to show off their services, their turnaround time, the details of their data and the support they can provide in helping you interpret the results.
Validate the results when you have selected a vendor and had your whole file processed. Use your pre-processing documentation to check that you got back all the records you sent, that the file format is what you specified and that the items you wanted appended were actually added to your file. Your vendor should provide process audit reports that tell you the match rate, the matching on different items and the details of the file you received afterward.
Finally, review the whole engagement. If you haven’t done a third-party data append before, it can be a daunting and complicated process. These best practices of understanding, cleaning and documenting your data, selecting a good vendor, and validating the processing will help you successfully enhance your file. They are important because adding the right information to your customer file will improve its usefulness internally and make it a sound foundation from which you can grow your business.
Bill Singleton is a manager of analytics and consulting services at The Allant Group in Naperville, IL. He can be reached at bsingleton@allantgroup.com and 630-579-3448.
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