Silos Are Bad For Address Quality

By Adam Collinson

Address quality impacts the entire enterprise, yet processes from various silos impact address quality in some way.

Silos, while great for farmers, can be detrimental to Address Quality within an organization. Address quality impacts the entire enterprise, yet numerous sub-processes from various silos contribute to address quality in some way.

Consider these examples:

• Data Entry: The primary goal is speed and accuracy. However, there may be insufficient checks to ensure an address is not only valid but also the correct address to meet business needs and industry regulations.
• IT/Maintenance: This silo performs database maintenance but often cannot take action when data deficiencies are identified.
• Mailing: The objective is often to achieve the lowest possible postage. This can involve methods that require IT or will impact returns operations, and might not maximize response rates or overall ROI.
• Returns: This involves processing undelivered mail. Best practices necessitate ongoing IT support and a feedback loop to impact future mailing operations.
• Customer Service: This department handles customer calls and issues related to delayed or returned mail. Resolving these often requires ongoing IT efforts for data access.

Unfortunately, each of these sub-processes often has its own goals and budgets that may not align with or support overall Address Quality.

I recall evaluating a Company over a decade ago where silos were deeply entrenched. Address quality was not a mature process. The Company’s process for detecting when people moved was driven by USPS requirements for postage discounts. They believed they had best practices in place, utilizing both pre- and post-mailing solutions, as detailed in a three-year-old process document.

However, each process was managed within a different silo. In an unrelated budget cutting process, each silo had been tasked with cost reduction. Consequently, both silos had ceased their address quality management processes, assuming the other would maintain their processes – thus maintaining compliance. Neither had updated the corporate process document – so most thought both processes were still in place.

All too often, address quality management falls to the wayside of other priorities within a silo’s operation. More commonly, I find that while each silo recognizes the value of and need for improvements, two issues arise:

• Cost vs. Benefit Disparity: The costs of implementation and ongoing management of address quality often fall to operations that do not directly benefit. It is too easy for that department/silo to reprioritize for more important KPIs.
• Cost-Sharing Stalemate: Each department wants others to bear the majority of the costs, while they contribute only their specific portion. For example, if a core installation costs $80K with an additional $20K for each silo’s specific needs, each silo might justify that the $80K be paid by another, as each expects a $90K annual return in savings. In such a scenario, the silo covering the $80K install and their $20K custom costs wouldn’t see a positive ROI until the second year. But if another silo covers the $80K, and they only bear their $20K custom cost, then they will see a $70K return in the first year.
  In short, Address Quality must be a corporation-level initiative, led by a corporate champion capable of making decisions across silos for the overall benefit of the organization. In the example above, if each silo covered half of the $80K and their custom $20K, each would see a $30K return in the first year.  But, the real winner is the entire corporation.

Businesses that embrace this corporate-level support for address quality consistently experience significant benefits across the entire organization.