Deutsche Post Direkt – Address Study 2021: Every seventh address cannot be delivered – The results of the study reflected in an interview with Petra Weber, Managing Director of Deutsche Post Direkt

Excerpt from the study website: “The results of the Address Study 2021 by Deutsche Post Direkt are sobering: 14.7 percent of customer addresses are still undeliverable. Two other problems: duplicates, i.e. duplicate addresses (2.8 percent on average), and incorrect addresses (6.5 percent). This is the summary of the current address study 2021. A ray of hope compared to the last address study from 2018: The data quality has improved slightly over the past three years. The proportion of incorrect customer data fell from 16.4 to 14.7 percent.

The main cause of bounce, with a share of 8 percent, is that a person has moved or the person has died without disclosing their new address. Although 2.8 percent of the addresses are not up-to-date with the companies and would actually be undeliverable, Deutsche Post Direkt has forwarding orders or other relocation information for these addresses. This means that address cleanup can eliminate this cause of bounce.”

By the way, the complete study can be downloaded free of charge:

https://alles-ueber-mailings.deutschepost.de/de/direktmarketing-wissen/studien/adress-studie-21.html

Deutsche Post Direkt – Address Study 2021

Now to the very interesting interview with Deutsche Post Direkt Managing Director Petra Weber.

Hello Mrs. Weber,
Thank you for answering a few questions about the Address Quality 2021 study.

Georg Blum:
A slight improvement has occurred. Did the result surprise you? Or do you see within the support that companies put more emphasis on address quality?

Answer Petra Weber:
Deutsche Post Direkt has been conducting studies on address quality for around ten years. Until 2018, a steady decrease in data quality was observed.

This year, data quality has improved slightly for the first time. While the proportion of undeliverable customer addresses was 16.4 percent in 2018, this figure has fallen to 14.7 percent this year.

One possible reason for the improved data quality may be the General Data Protection Regulation, which came into force in 2018. Since then, many companies have been updating their customer data, for example to meet the requirements for accuracy of the data and the avoidance of data breaches due to incorrect addressing and delivery. In addition, the significant increase in online trading has led many companies to focus on the importance of correct addresses, as incorrect addresses lead to unnecessary costs in the logistics sector.

Georg Blum:
Let’s go into the most important results:
What are the biggest sources of error?

Answer Petra Weber:
A frequently underestimated source of error is already data entry.

If you live in the “Bischöflich-Geistlicher-Rat-Josef-Zinnbauer-Straße in 84130 Dingolfing”, some systems here are already overwhelmed with the length of the street name.

At the same time, spelling and typing errors are possible when entering the address. Without an address check, incorrect data enters the CRM system and thus produces avoidable costs, for example when sending parcels. Around 3.4 percent of the addresses examined in the study had such serious postal errors that they could not be delivered. Our analyses have shown that the biggest source of error with around eight percent are undeliverable addresses of households or people who have died or moved. A new relocation address could be found for a further almost three percent of the addresses examined. These customer contacts can be maintained by updating the address before shipping.

Georg Blum:
What does this mean in detail? What can a company do about this?

Answer Petra Weber:
In e-commerce, there is a lot of talk about abandonment rates. If I am already supported with the address entry at check-out, errors and cancellation of the order are less likely. For example, companies can use assistance systems to make it easier to enter addresses.

With our solution, customers receive up to 15 suggestions for suitable street or place names right from the first alphanumeric characters in the input field.

A total of about 1.2 million different address suggestions are available. In addition, regular test comparisons are recommended for the address inventory to determine how often the addresses should be cleaned. The frequency of address cleanup depends on several factors, such as the relocation behavior of customers or the frequency of customer contact by letter and parcel.

Deutsche Post Direkt – Address Study 2021

Georg Blum:
20 results per industry were included in the study: Is the result representative? 

Answer Petra Weber:
As we explain in the study design, the analysis carried out does not claim to be representative. However, it shows very clearly what differences exist between different industries in terms of the timeliness and accuracy of address data. After all, a total of 87 million addresses were examined.

Georg Blum:
The insurance companies are the best, the tourism companies the worst.
Why are the insurances so good and the tourism professionals significantly worse?

Answer Petra Weber:
In the case of insurance companies, there is an ongoing contractual relationship with the customer. The data must be kept up-to-date for the fulfilment of the services and mandatory information. In addition, customers have a great self-interest in notifying their insurance company of changes of address in order to be covered in the event of an insured event. This always keeps the address quality at a good level.

With 21 percent undeliverable addresses, the tourism companies land in last place in the industry comparison. Every fifth address is therefore incorrect or outdated. Compared to insurance companies, very few hotels or tour operators receive information from their customers about a change of address.

It is therefore primarily up to you to maintain your address inventory. And here, the moderate address quality is often only recognized during customer reactivation measures.

Georg Blum: The results also show the changes for the last time.
Who has deteriorated? What could be the reasons for this?

Answer Petra Weber:
The mail order business experienced a large influx of customers in 2020 due to the pandemic. Many shippers took the opportunity to woo inactive customer bases. The address quality of old customers is worse in most cases. This is probably an important reason for the reduced data quality in the mail order business.

For banks, data quality has deteriorated by 6 percentage points compared to 2018. The comparatively only moderate performance of the banking industry in terms of address quality could sometimes be due to the increasingly rare personal contact between customers and companies in fewer and fewer branches.

Many companies in the non-profit sector do not have regular contact with their donors. This means that the address quality deteriorates continuously due to the time factor alone. If donation organizations invest in an address check before a mailing, the lack of data quality often only becomes apparent. Fortunately, many companies have now realized that an address check before shipping can save a lot and use an address check. We have already talked about possible reasons in the tourism sector.

Deutsche Post Direkt – Address Study 2021

Georg Blum:
Let’s go one more analysis level down to the individual results per industry: This shows an extreme spread of the results. In some cases, results were above 60% error rate, others were 1.2%. What can you learn from the best?

Answer Petra Weber:
Regular address maintenance is the be-all and end-all. The best companies maintain this data more frequently, so the quality is also much better. The more time there is between address cleanups, the less new addresses I receive from relocation messages. Because with the largest source of moving addresses from deutsche Post’s forwarding orders, the new address may only be disclosed for 24 months. If supplementary relocation sources cannot provide a new address, the old address is undeliverable. This means that many addresses are lost due to large distances between the address comparisons. The shorter the distances, the fewer addresses you lose.

In addition, it is important to include correct addresses in the CRM system right from the start. As the analysis has shown, many addresses still contain such serious postal errors that the addresses are undeliverable.

These are addresses where postal code, city and street do not match or where street names are so misspelled that the systems cannot recognize them. Here we are again on the subject of assisted entry of addresses directly at the first customer contact, whether during online registration or ordering or customer contact in the call center.

Georg Blum:
Let’s summarize the results:
Partly excellent, partly catastrophic – on average so lala. Correct?

Answer Petra Weber:
The Address Study 2021 has shown that no prospect and customer database is error-free. However, in terms of current and correct customer addresses, there are large differences between the ten industries examined and also between the companies. Many companies know that customer addresses are an important part of their working capital. Of course, this is especially true for companies that sell at a distance. Without the correct address, the customer can neither be wooed by post nor can goods be delivered to him.

More and more companies are recognizing that address maintenance ultimately saves costs by reducing printing, postage, shipping and returns costs.

Georg Blum:
Has the GDPR made a difference for one or the other company? If so, what?

Answer Petra Weber:
The EU General Data Protection Regulation obliges companies to keep their customer data up-to-date and correct. Thus, according to the principle of accuracy in accordance with Article 5 GDPR, companies themselves must ensure that the personal data they process is correct. Most companies are therefore now taking a closer look at their addresses. In the past, old addresses were rarely deleted. Now many companies have also deleted old stocks that are no longer used for advertising. The conscious handling of customer addresses has become significantly greater.

Georg Blum:
The result is one thing, but more importantly, what do you learn from it?

Answer Petra Weber:
There is still a great need for information and advice on the benefits of address matching and its potential savings. As already explained, the GDPR has led to a rethink for many companies. Companies that already have a central point of contact for address quality in both strategic and technical terms are clearly superior to other companies in this area.

Deutsche Post Direkt – Address Study 2021

Georg Blum:
What are the reasons for permanent changes? How much money could be saved if a company consistently tackles the topic?

Answer Petra Weber:
The reasons for address changes are manifold. In 2020 alone, 100 place names changed and 9,000 streets were newly created, divided or renamed. In addition, there were around 14 million removals last year. In addition, there are 370,000 weddings and around 150,000 divorces, which are often associated with name changes.

How high the savings potential is varies from company to company. Companies can get a first and quick overview of the data quality in-house with our free address check. This helps to determine the number of incorrect, incorrect and outdated addresses. Based on this quota and own data, such as returns due to incorrect addresses or postage and production costs per mailing, the savings potential can be quickly calculated. We have customers who save 5-digit amounts per year just by correctly entering the addresses during the first entry with one of our assistance systems.

Georg Blum:
How long does it take for the investment to pay for correction?

Answer Petra Weber:
The filtering of undeliverable addresses usually pays off at the first postal mailing, as it is lower than the postage costs. For moving addresses you have to calculate a little differently, as they cost between 1.29 € and 1.40 € per hit. However, since it is known to be five times as expensive to acquire a new customer than to keep an existing customer, this is a good investment in customer loyalty. Since the amount for the new address from the move is very small.

Georg Blum:
What are the most important steps a company should take? One-time correction, ongoing correction?

Answer Petra Weber:
Regular clean-up is very important. The frequency depends on various factors. For example, how often I write to customers, whether I have a young target group that moves more often or an older one that hardly moves. We recommend doing a quarterly test comparison at the beginning to see how the quality develops. Then you set the right rhythm. However, many customers do not use their entire address inventory.

Deutsche Post Direkt – Address Study 2021

Georg Blum:
Finally, a note for the online pure-focused companies. There are companies that believe they no longer need postal addresses. But “oh woe”, there was a case years ago in my clientele in their British branch. There, the passwords were “hacked” and a new password had to be sent to the customers and interested parties. This was a medium disaster because the postal addresses were so poorly maintained that the company upset or lost a high percentage of customers. It is therefore still worthwhile to maintain the postal address despite all the digitization. This is comparable to the fire brigade: you hopefully never need them, but if you do, then all equipment and people should be ready for use. And so it is with the addresses.
Or how do you see it, Ms. Weber?

Answer Petra Weber:
Absolutely right! Since 2018, the General Data Protection Regulation has obliged companies to actively take care of the addresses of their customers. Since then, many companies have been updating their customer data to ensure the accuracy of the data and to avoid data breaches due to incorrect addressing and delivery. In addition to this legal requirement, companies should have their own interest in high data quality. Because wrong or outdated addresses cost money. Every time companies sell something and send goods to the customer, the postal address is required. If this is not correct, the package comes back and causes high costs. For services and contracts, I usually also need the address, for example for the invoice. So you won’t be able to do without the address in the future.

Georg Blum: Finally, what is your conclusion?

Answer Petra Weber:
As the address study has shown, there is still a lot to do in view of almost 15 percent incorrect and outdated data. Maintained customer addresses are indispensable for dialogue marketing and a prerequisite for business mail and parcels to be delivered.

It makes sense to appoint a central person responsible for address quality within each company organization.

This coordinates the needs for the appropriate address quality between marketing, sales, IT and controlling. So there is a clear responsibility for this important issue.

Georg Blum:
Thank you very much Ms. Weber for the very good conversation and the many detailed answers.

By the way, the study can be found under
Download https://alles-ueber-mailings.deutschepost.de/de/direktmarketing-wissen/studien/adress-studie-21.html.

More about address and data quality can be found here

 

Note: This is a machine translation. It is neither 100% complete nor 100% correct. We can therefore not guarantee the result.