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BUSINESS DATA REPORTedly degrades about 3% to 5% per month. Whew. That means a third or more of your company's information on business buyers and prospects may be useless by the end of every year. Given this, the need for list hygiene is critical.

Here are some annual percentages by data element from Dun & Bradstreet:

• In a year, 20.7% of the business postal addresses on your file will have changed. If your customer is a new business, the rate is higher (27.3%).

• Phone numbers change at around 18% overall, and 22.7% among new businesses. No wonder your sales force is always complaining that your data is no good (although they probably use more colorful words not suited for a publication like Direct).

• Even the company name is unstable, changing at the rate of 12.4% among all companies and a whopping 36.4% among new businesses.

But it's not only about data churn, it's also about the complexity of a business's customer record itself. Leaving aside important factors like purchase and promotion histories, let's just consider contact information. In a typical B-to-B database, you need details about what the company does, postal address, phone and fax numbers, as well as “firmographics” like industry and size. But many companies conduct business at multiple sites, and you often need to get in touch with several people — buyers, product specifiers, purchasing agents — at each location. Now you see why B-to-B database administrators tend to be a very patient lot.

This goes way beyond “four-line,” our traditional mail order view of a business address. In fact, the U.S. Postal Service recognizes up to eight lines, including the mail stop, the contact name, lines for two types of titles, company name, department name and the regular two-line address.

So it's complicated, but it's also a joy for those who find the complexity a welcome challenge. Among those who take pleasure in wrestling with business data are David Knutson, customer database manager at Uline, a shipping supplies company outside Chicago; Bernice Grossman, president of the B-to-B database marketing consultancy DMRS Group; and — I admit — myself.

The three of us held a workshop at the Annual Catalog Conference in Orlando, FL in May, where interested parties could share ideas and experiences on B-to-B data issues. We were joined by more than 30 people, representing not only catalogs, but also database service companies, list brokers and multichannel marketing companies. The group divided into four sessions, addressing such thorny topics as address standardization and formatting; file cleaning and updating; company classification and buyer role identification; and new customer data collection and verification, both online and offline.

With thanks to the workshop attendees for their energy and enthusiasm, I am delighted to report on the ideas generated. A similar session is planned for the Direct Marketing Association's Annual Conference in Atlanta in October.

• Refer to USPS Publication 28 for examples of field selection and layout for business addresses. It's downloadable from the postal service's Web site (www.usps.com).

• Find the input editing standards document that was developed when your system was first created. It's probably buried in a file somewhere in your office. Use the standards to train personnel who do key entry. Update the document as needed, and keep it current.

• Create a standard operating procedure for data entry, and train your key-entry personnel on it.

• Add an open-ended field for “delivery instructions” to keep these instructions from getting into your name and address fields. But remember: Open-ended fields are not to be used for selection or for later marketing efforts. They're only useful if someone is going to actually read and act on the content. Typically these fields exist on the customer master, attached to the “ship to” record, if they're to be used for every order; or as a special message within the order record for one-time use.

• Include three types of address options for a customer: “ship to,” “bill to” and “mail to.”

• Good address standardization and consistent formatting helps reduce duplicate accounts, allowing both internal and external dupe identification programs to work more effectively.

• Use data analytics to create exception reporting. Then have your less-busy call center shifts review the exceptions and clean them up, either by common sense or through outbound contact to verify.

• Make sure your salespeople are compensated correctly. If they are commissioned on new key-entered orders, you're likely to end up with a lot of duplicate records.

• Pay for postal returns (endorsements) and update your files with the returns. This should be done at least once a year, and ideally two to four times a year.

Learn the pros and cons of the different endorsement options and how they operate within both standard and first class mail: address change service; address service requested; return service requested; change service requested; forwarding service requested.

For information and tips on addressing options, go to usps.com.

• Add NCOA as a new address and mail to both old and new addresses. But after mailing to the old address once, you may want to suppress additional mail to the old.

• Send a sample of your data to hygiene vendors, to find out which one does the best job on your file.

• Use overtime or off hours (second or third shift) to review suspect records identified by the outside vendor.

• For Standard Industrial Classification (SIC) or North American Industry Classification System (NAICS) appending: Send a sample of your data to append vendors. The sample should include some companies whose SIC or NAICS codes you already know. This will allow you to assess the vendors' quality.

• Don't bother asking customers their SIC or NAICS codes. They don't know them. Look at other options, like providing an industry-level classification option, such as manufacturing, distribution, retail, etc. Or ask for a more complete description in an open-ended field.

• If you really care about SIC codes, set up data appending with Dun & Bradstreet or InfoUSA.

• The number of employees can be just as important as an SIC code. And it's often easier to obtain, especially if you provide check-off boxes and ranges.

• The role of a buyer can vary from company to company. Use drop-down menus to gather buyer-role information and include an open-ended field so customers can indicate if their role doesn't appear. Keep in mind that open-ended fields will not allow the data within to be used for selection. But it can be used to spot higher frequency titles, which you can then add to the functional drop-down menu.

• Use separate fields for actual title and functional title. While this approach is ideal, most companies allot just one field for it.

• Invite Internet users to note whether they're business, consumer or government customers, so your name and address screens can be tailored to make sense.

• Ask for customer data more than once, and make it easy for buyers to provide it.

• Train new reps on your input standards. Give all reps refresher courses every 90 days. Send out frequent reminders and updates to the reps.

• If the costs of goods sold is low (say for software), ship the product before verifying the address.

• If you need to verify before shipping, use programs such as those from QAS Systems or Group 1 Software to identify suspect addresses and send them to customer service for review. Ideally, this can be set up as an interactive process so the customer service rep can make fixes on the spot.

• Consider conducting a review of all Internet orders.

• Confirm e-mail address by sending an order confirmation or a newsletter. If it bounces, verify the address by outbound phone.

• Improve e-mail capture rates by requesting that the address be typed in twice.

• QAS is offering software that lets the customer review a suspect address in real time. It can either pop up a message saying something like “Please look over your address and make sure it's correct,” or it can identify the actual problem and offer valid alternative choices.

• Use input edits to either prompt customers about problems or to kick out orders for manual review.

• Some characteristics that make an address suspect:

1. ZIP does not agree with city/state.

2. Address does not exist within a given ZIP.

3. Missing/wrong directional on the street (i.e., East, West).

4. Building number does not exist within the street.

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RUTH P. STEVENS (ruth@ruthstevens.com) consults on customer acquisition and retention and teaches marketing to graduate students at Columbia Business School. She is the author of “The DMA Lead Generation Handbook” and “Trade Show and Event Marketing.”

• A new business opens every minute.
• A new business files for bankruptcy every eight minutes.
• A company closes every three minutes.
• A CEO is replaced every minute.
• A company name change occurs every two minutes.

Source: Dun & Bradstreet