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LIST PROCESSING IS THE SECOND STEP in improving response rates, controlling campaign costs and boosting your bottom-line ROI and profits. Rediscovered Customers Boost Sales Fast and Making Flat Sales Take Off Fast showcase two real-life examples of how list processing helps cut costs and boost profits. |
WHAT IS LIST PROCESSING?
List processing eliminates duplicated names and non-deliverable addresses in your contact and address lists. This cuts costs for mailing, telemarketing, printing, media and fulfullment. As a fringe benefit, avoiding duplicated contacts reduces possible customer criticism about waste and inefficiency.
Anyone that uses name lists -- even when they come from their own in-house systems -- can benefit from good list processing techniques. Even greater benefits accrue when contact lists (“mailing lists”) are obtained from list brokers or other organizations. A good example is when a company combines its customer list with an "outside" list of prospective customers. It is likely that some overlap will occur between the two lists. List processing focuses upon resolving these overlaps.
There are two kinds of overlap problems. The first is to ensure that the overlaps are real. That is, the duplicated names are in fact true duplicates before deleting one of them. Obviously, if the names are now true duplicates, a deletion will remove a valid customer from the list. This is called an "overmatch" and it causes valuable customers to be dropped from the list.
A second overmatch problem appears when customer lists from different departments are combined to roll up sales to a single contact person, company or location. In this situation, overmatching causes activities or sales are assigned to the wrong person or location. This makes it appear that some customers are buying more -- and less -- than they really do. This kind of problem wreaks havoc with salesmen's commissions, advertising efforts and campaign effectiveness.
There can also problems with not removing all of the duplicated names. If true duplicates are allowed to remain in the list, then the same person will receive more than one contact. This is called an "undermatch." Receiving duplicated mail, phone calls or emails annoys customers and wastes money.
HOW DOES LIST PROCESSING WORK?
Finding and eliminating duplicate addresses in a list is not as simple as it may seem. It requires a series of different logical rules to determine what is (and what is not) a duplicate address. If these rules are not designed carefully, it is easy to undermatch or overmatch addresses. Again, undermatches miss duplicated addresses, waste money and may annoy customers. In contrast, overmatches throw out good (unique) customers and addresses even when they are not duplicates.
Example
1 |
Example
2 |
Example
3 |
Example
4 |
|---|---|---|---|
| 101 Main
Street Anytown, Missouri 64444 |
P.O. Box
11 101 Main Street Anytown, MO 64444 |
POB #11 Anytown, Missouri 64444 |
101 Main
Court Anytown, Missouri 64444 |
For example, consider the addresses above. Good list processing will match the first three of these addresses and identify the first and third as duplicates of the second. Not spotting these duplicates is an undermatch and will cause two or three items to be sent to the same address. At best, this wastes money -- and it may also annoy your customer or prospect.
However, overmatching destroys the value of a list more quickly than leaving duplicates. In the above examples, consider what would happen if Example 4 were to be mistaken as a duplicate of any of the others. This would result in the loss of a contact -- and possibly assign this person's purchases with someone who did not make them.
Management Analytics Group has developed sophisticated tools and techniques that work in conjunction to minimize both undermatches and overmatches. Business-to-business marketing campaigns are especially sensitive to these problems. Simple matching rules often fail the needs of the B2B marketer. For example, several contact persons may share the same street address or PO Box. Or, the company name can be entered as initials on one list (ABC, Inc.) and spelled out on another (Acme Bag Company, Inc.) and so forth.
Many list processing programs still use the soundex matching logic invented by the Census Bureau in the 1920’s. Soundex looks at the first four characters of a name to spot duplicates. This approach is likely to confuse “Johnson”, “Johnston” and “Johnstone” and can cause many overmatches. Newer phonetic matching techniques avoid such problems by processing at least eight characters of a name and using sophisticated phonetic language rules. Even more sophisticated logic rules are needed to handle initials.
IS LIST PROCESSING WORTH THE COST?
It costs money to clean up, standardize and de-dupe a list. Often special logic rules must be developed for your specific needs such as a list containing many Hispanic or Asian names. Or, perhaps you are contacting people in certain cities that have unusual street naming conventions. (Atlanta, GA, comes to mind.) Nevertheless, the payback on good list processing can be immediate.
Consider the actual case where one organization switched from using an off-the-shelf merge/purge program to using custom logic rules developed just for their needs. They had a master list of 1.1 million households that they had processed with their program. Yet when Management Analytics Group analyzed their list, the customized rules we created revealed (and removed) 65,000 duplicate addresses. We did this at a fraction of the cost of mailing to the 65,000 duplicates just once – and our client mails to their customers four times a year, every year!
The challenge is greater when the address list has many, many duplicates. This happens when a company combines their own customer list with a purchased or rented list. In this situation, it is not unusual to find that 10% to 70% of the addresses are duplicates. Many less sophisticated list processing programs cannot handle duplication rates this high.
WHAT'S THE BOTTOM LINE?
Deciding whether to invest in merge/purge list processing is both an economic and an aesthetic decision. Duplicated mailings or telemarketing contacts is expensive and annoying. At the same time, failing to communicate with a legitimate contact may cause you to lose a customer. And, it makes no sense to send mail to an undeliverable address.
However, it also makes no business sense to spend more on list processing than will be saved in contact costs. It may be that the most cost-effective alternative is to go ahead and mail out duplicates. A good rule of thumb is to use merge/purge list processing when the cost of processing is small compared to the potential savings in collateral, production, mailing and other contact costs.
Finally, remember that it is far easier to remove a few duplicates from a relatively clean list than it is to remove lots of dupes from a poorly maintained ("dirty") list. If the list you start with is poorly maintained, you may expect list processing to provide you an improved list -- but do not expect the same results as you would get if you started with a clean, well-maintained list. (Learn more about this with Data Hygiene - Database Bullets To Dodge.)
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