There was a time when it was easy to understand what address management software did. It was a straightforward case of cleansing and verifying addresses, in some cases, at the point of capture, but more often in 'batch' mode, with the software used to clean and update an existing database at regular intervals. Even the companies that developed address management software concede that it was a fairly routine process that few who used it managed to get too excited about.
But address management has evolved over the past three or four years. In addition to core address cleansing and validation, address management software now routinely extends into de-duplication, suppression, data enhancement, international addressing and other areas of data quality.
"Address verification is a useful tool when reducing misdirected mailings and improving marketing communications efficiency and effectiveness, but increasingly it is apparent that there are benefits from using integrated technology that can process more than simply address verification," says Colin Rickard, managing director, West and North Europe at Dataflux. "Address management vendors are now investing in tools to perform data quality functions such as de-duplication, matching and parsing of data."
Some believe that by introducing additional services such as de-duplication and suppression, address management suppliers are simply focusing on the end user. Kevin Telford, strategy director at Dataforce Group, says: "Address suppliers are recognising that consumers are demanding a more one-to-one relationship, which is built on trust, relevancy and appropriateness. By moving into this space it is recognition that marketing strategy and direct mail practice is evolving to deliver a better customer experience and drive ROI."
Contact data management
Experian-owned QAS, one of the biggest players in the address management sector, recently repositioned itself out of address management and now sells itself as a contact data management (CDM) company.
"We spent a lot of time in the last fiscal year thinking where we go next," explains QAS chief executive Jonathan Hulford-Funnell. "The market in the UK is starting to mature. Most companies have address management as part of their basic data quality programme, and new business is relatively flat."
According to Hulford-Funnell, the opportunity now for QAS and others in the address management business lies in the fact that board directors in companies are starting to take ownership of data quality. Research carried out by QAS in 2005 and 2007 showed the percentage of board members taking ownership of data quality issues rising from 34 per cent in 2005 to 50 per cent in 2007. Over the same period, the number of organisations which had a formal data strategy in place rose from 27 per cent to 46 per cent.
"The data quality space is growing," says Hulford-Funnell. "Companies are paying far more attention to it, and they have to, because marketers are faced with multichannel marketing campaigns. Ten years ago there was no such thing as an email campaign, so as the way we communicate with customers and prospects becomes more sophisticated, the pressure is on businesses to organise their data."
GB Group, too, says it is seeing an increasing number of its clients building in services to capture and validate not just the postal address, but the email, mobile and landline numbers as well.
"Marketing to the 21st Century consumer demands awareness of more than just where they live," says David Green, business development director at GB Group. "We need to start talking about communication management, not just address management. And in an era where so much value is attached to personal identity, businesses must ensure they can verify all aspects of identity information to enable clients to interact over any given channel of communication."
The feeling among suppliers is that UK Plc now recognises the value that good quality data can add to companies' balance sheets. Postcode Anywhere managing director Guy Mucklow says for private equity businesses looking to buy companies, "one of the first things you look at as part and parcel of the goodwill is the customer records, and if they are all over the place, the value of them is far less than if they are in great shape".
Additionally, says Mucklow, companies are making big investments in business intelligence software to enable them to mine the data they hold on existing customers more effectively in order to cross-sell and up-sell to them.
"There have been some major acquisitions in the business intelligence space over the past 12 months, but business intelligence is only as good as the underlying data that supports it," says Mucklow. "These deals have focused attention on the whole data management market."
Integrated solution
If the rise of multichannel communications is one key factor driving the evolution of address management software, the demand to integrate point solutions within an enterprise-wide platform is another.
"What's interesting is the way companies are moving beyond just adding deduping etc to being able to integrate the address management solutions with CRM systems and other databases," says David Laybourne, a director at digital print company Real Digital International.
Laybourne argues that this type of integration is essential, since CRM systems are data-rich, but often suffer from data quality issues. He says, however, that there's still some way to go before the dream of total integration is realised.
"I think we are a fair way down the road," says Laybourne. "We're not necessarily there in terms of full integration, but in terms of having the ability to bridge the gap, to link two sets of tools together and have the confidence to know that the processing you are undertaking is doing as much good as harm, good progress has been made."
Points of difference
Address management companies have every right, of course, to broaden their offerings in the desire to win new business and differentiate themselves from the competition. But if every company in the space is branching out in the same directions, where do the points of difference between the various suppliers come from? Terry Hiles, managing director of Capscan, says the key is what the software itself is offering.
"It comes down to the user interface and the ease with which the software can be used, the sources of the suppression data, the qualitative differentiation between the address management engines," says Hiles.
And while the rise of the web has created new address management offerings, both from existing suppliers, and from new entrants offering address management on the 'software as a service' model. Hiles does not believe these new entrants will affect the major players' core market. "We have 25 years worth of expertise in batch address cleansing, and although online address management is not rocket science, when you go into the batch cleansing side of things, most of the big players have years of development tied up to achieve the match rates and accuracy we can offer. I think the new online suppliers will go for the low-hanging fruit, but the more difficult aspects, such as cleansing existing data, will stay with the more experienced players."
The client's perspective
On the client side, Tim Pottinger, database solutions director at EuroDirect, says the key ingredients of any address management solution are automation and integration. EuroDirect uses a variety of different address management solutions, but Pottinger says that even if the company is happy with the service it currently uses, it is interested in any new solution that comes to market. "I don't care where it comes from as long as it's better than what we've got," says Pottinger. "We are always looking for greater efficiencies."
On the supply side, the question most software companies are asking themselves is: "Where can we take this next?" For Capscan's Hiles, it will be some form of 'mash-up' that will enable companies to aggregate data in real time by using a variety of online data sources on the web.
Whatever it is, one thing's for sure: if the last few years are any sort of guide, it probably won't look anything like address management as we know it.
CASE STUDY
Brand: Leger Holidays
Objective: To improve data quality when targeting prospects and existing customers
Supplier: QAS
Like many companies that take direct bookings, Leger Holidays is reliant on the accuracy of the details input by its call centre staff.
Leger's data integrity is crucial to its marketing efforts. The tour operator provides short breaks, battlefield tours and cruises to around 100,000 customers a year. It has amassed a customer database of 2.1 million records.
Every month the company targets between 1,500 and 150,000 prospects, but with no set structure for its addresses, preparing for mailing was time consuming as data had to be manually formatted by the IT team. Also, as there was no solution for verification of contact information, Leger estimated 10 per cent of its data was inaccurate, costing it around £60,000 a year on mailings that didn't reach the planned recipient.
In an attempt to rectify the situation Leger ran the rule over several address management packages on the market before opting for QAS. It integrated QAS Pro with its existing Traveller booking system at the call centre to verify incoming details instantly, and cut the time agents spent with customers. To clean up its existing database, the company implemented QAS Batch, which cleans and verifies records and standardises the address format.
As well as increasing confidence that tickets are being sent to the correct address, Leger's direct and CRM channel manager, Mike Fountain, says the tools had improved the overall data quality: "Every undelivered brochure is a waste. With QAS, we are only targeting genuine prospects."
Since using QAS Batch, Leger has seen a seven per cent uplift in data quality, and 97 per cent of the database is now accurate enough to mail to. The next stage for Leger is to use QAS Batch to help deduplicate its legacy data and to align data with the ever changing PAF.
Fountain is also keen to use QAS online to help ensure that customer-entered addresses are as robust as other data.
WHO DOES WHAT
All the big address management suppliers have extended their offerings beyond core address management. Here's a quick guide to what's on offer from some of the major players.
CAPSCAN
- Data cleansing and enhancement
Matchcode and Zapcode (with additional data sets). Also, OnDemand (a hosted service), Capscan Integrity, and Capscan Bureau Services.
- Mailing and data management solutions
Sortcode (for Mailsort and Walksort programmes); MatchManager (deduplication); Mail (deduplication for SAP systems).
- Geographic information systems
Nearcode - online and desktop store locator.
POSTCODE ANYWHERE
- Data cleansing
Postcode Anywhere Data Cleansing
- Data enhancement and profiling
Postcode Anywhere Lifestyle profiling
Postcode Anywhere - Global Business Data from D&B
- Standardisation and formatting
Postcode Anywhere Global Address Data
The Web Service
GB GROUP
- Data capture and validation
GB Accelerator and GB Accelerator B2B
- Postcode appending
GB Accelerator Batch
- Meter information verification
GB Accelerator Utilities Register
- Mobile data verification
GB Accelerator Mobile Toolkit
- Suppression
disConnect and reConnect
- New property data
Not Yet Built and Just Built
- ID fraud prevention
URU (UK citizen verification)
EXPERIAN QAS
- Data auditing - QAS Batch.
- Data capture - QAS Pro, QAS Gateway and QAS Bank Wizard
- Data cleansing - QAS Batch
- Data matching - QAS Match
- Suppression - QAS Batch with Suppression
- Data enhancement - QAS DataPlus sets
- ID fraud prevention - QAS Authentication
POWER POINTS
- The practice now goes beyond core address cleansing and validation
- It is spreading into wider data quality territory
- Marketers are seeking the benefits of integrated kit.