Do you often encounter situations in which customers, users or recipients provide incomplete or incorrect address data? Do you wonder if and how their behavior can affect your company’s processes and overall business health?
In this article, we’ll take a look at common problems with wrong address data, their scale, their effects on your business and ways to deal with them. We will use up-to-date market information from the first quarter of 2023.
An incorrect postal code is a common problem that can negatively affect logistics processes, goods delivery and customer service. Many companies from various industries, such as e-commerce, logistics and financial services, face this challenge on a daily basis.
In the table below, we have presented the most common types of errors in this area and their scale, broken down by 3 industries – logistics, ecommerce and finance.
An incorrect postal code can have a negative impact on businesses, especially in the courier industry. Postal codes are essential for sorting packages and forwarding them for delivery. If the postal code is incorrect, it can prevent the parcel from being automatically assigned to the correct sorting facility or logistics terminal. This results in longer delivery times and the need for manual address verification, which generates additional costs and makes the logistics process more difficult.
The problem of imprecise addresses poses a significant challenge in analyzing location data. Lack of precision can lead to erroneous conclusions and limit the ability to use this information for business processes, efficient delivery or correct identification of customers.
The following table shows typical errors from imprecise addresses.
Accurate address information is important for e-commerce, courier and local service delivery companies. Inaccurate address information makes it impossible to accurately geocode the delivery location (which can translate into longer delivery times and lower efficiency). This in turn requires manual analysis by employees to determine the actual delivery location. Such procedures increase delivery times, generate additional costs and can lead to loss of customers.
In addition, manual analysis of records does not fully eliminate the risk of incorrect address identification, which can result in returns and dissatisfied customers who did not receive their shipments.
Moreover, inaccurate addresses complicate fraud detection and prevention processes because the lack of clear identification of repeated addresses limits the power of detecting links between individual customers. An inaccurate and imprecise address is itself an important variable that can be effectively used to quickly detect and prevent abuse.
Another problem in the area of address data quality is missing data. Customers provide an incomplete address, which makes it difficult to identify the correct locations.
You can see which deficiencies are most common in the table below.
Missing address elements, such as street name, apartment number, postal code or city, can significantly affect companies’ operational efficiency. Employees are forced to manually verify inaccurate order information, leading to a decrease in work quality and prolonged logistics processes.
Example: Indicating the building number, but without the apartment number, makes it necessary for the courier to contact the recipient of the shipment, which naturally lengthens and complicates the delivery process. Especially when this contact is difficult, because the person, for example, does not answer the phone.
Bottom line – poor quality address data has a direct impact on a company’s operational efficiency. When address data is inaccurate, employees are forced to manually verify order information. The need for such intervention leads to a decrease in the quality of staff work and prolongs the entire process of orders processing.
Manual address verification not only requires more time and resources, but also increases the risk of errors, which can lead to mistaken deliveries or delays.
Poor quality address information also affects customer satisfaction. When orders are delayed or there are delivery problems due to inaccurate address information, the customer may feel frustrated and disappointed. This, in turn, can lead to a loss of customer confidence, negative reviews of the company and a decrease in loyalty.
The inability to uniquely identify and compare addresses makes it more difficult to detect connections between them and identify potential fraud patterns, which translates into greater operational risk and thus additional costs for the company.
That’s why it’s so important to take care of the high quality of address data and invest in tools to accurately collect and verify this information. The correctness of address data translates directly into operational efficiency, cost reduction and customer satisfaction and all of this is the foundation for company growth.
Another noteworthy aspect is the quality of address data for ecommerce companies delivering packages abroad. In this context, it is crucial to fully understand the addressing rules of the country to which products are shipped. Failure to do so can lead to significant errors in databases and shipment returns. Such a scenario can negatively affect the trust among new customers and significantly slow down the company’s foreign expansion.
In the graphic below you can see for which countries Algolytics has own address databases.
There are many factors that can contribute to incorrect address data. Awareness of these is key to identifying the problem and taking appropriate action to improve data quality. Here are some of the main causes:
Often, simple customer mistakes are the main cause of incorrect address data. These can include typos, omitting part of an address or swapping the order of information. On the other hand, data entry staff may make mistakes during the manual entry process or misinterpret data received from customers.
Address data can change over time, for example, due to changes in street name, building number or postal code. Failure to regularly update databases can lead to errors.
The use of unverified or untrusted sources of address data can lead to the acquisition of incorrect information. Incorrect data may come from incomplete or outdated address records, unverified Internet sources, or other unauthorized databases.
The lack of standardization of the address data entry process can lead to the collection of disparate information. For example, the lack of a uniform format for entering building numbers, street names or postal codes can hinder the process of analyzing and verifying address data.
Irregularities may result from an inadequate address data collection process, such as a lack of proper form-filling rules, lack of knowledge of local addressing standards, insufficient staff training, or lack of automation in the data collection process.
To minimize the occurrence of incorrect address data, companies should invest in address verification tools, regularly update their databases, use reliable information sources, and standardize the data entry process. It is also essential to regularly train staff to increase awareness and skills on how to correctly manage address data.
Errors occurring in address data significantly limit the capabilities of Location Intelligence – business analysis based on spatial data.
If you have incorrect data, you are not able to geocode it correctly, which naturally translates into lower effectiveness of such activities as:
In either case, it is useful to have precise information about where your customers are.
If you are concerned about minimizing the risk of receiving and processing incorrect data – consider using dedicated support. You can use the API for this, which allows you to standardize the data on the fly (for each new record) or in bulk for the entire address package. An additional option is Autocomplete mechanism, which will allow you to increase the quality of the input address data in your forms. In the same time it will improve the user experience of your site as it enables faster and easier form completion. A full list of options awaits you HERE.
Another excellent solution for the address data quality management is our web application, which you can test for free (up to 1000 records). You can find all the details and available demos at https://algomaps.com/.