The Essential Role Data Quality Plays in Compliance
These data quality best practices will both protect you and improve your marketing and customer contact.
- By Geoff Grow
- November 6, 2018
For many businesses, regulatory compliance is about as much fun as getting your tires rotated. To me, being proactive with data quality and compliance is about much more than managing risk: it has the potential to be a competitive differentiator that can grow your bottom line as the world moves further away from interruptive marketing and towards meaningful customer relationships.
Either way, compliance has become mission critical for any customer-facing business. Most people know that laws and regulations involving consumer privacy are rapidly increasing and penalties for violators are often severe. With all of the different privacy and data protection regulations recently passed or in the process of being enacted (over 100 to date), businesses need to adopt a best-practices approach to managing the quality of their contact data.
Whether it is the U.S. Telephone Consumer Protection Act (TCPA), Europe's new GDPR, the proposed California Consumer Privacy Act, or other new laws, many regulations boil down to two components: permission-based marketing and data quality. The first component often involves rethinking your lead acquisition process, ranging from how customers opt in to making it easy for them to manage their preferences.
The second component, however, requires a structured approach that ensures you are making valid and legal marketing contacts. Some examples of invalid contacts include:
- A mistyped email address or phone number results in marketing to someone who never requested it
- Someone provides fake contact information in response to a marketing promotion
- A "role" email address (such as "firstname.lastname@example.org") gets taken over by a new person
- The natural process of decay in contact information renders it incorrect as people move, change jobs, retire, or take on new roles
- A contact is located in Europe, where stricter GDPR requirements apply
Although these are all technically sins of omission, they can still come back to haunt an organization. Well-publicized high-dollar judgments have hit major companies for lapses such as sending text messages to cellphone numbers that had been reassigned to new owners.
In a previous column, I discussed several process-level issues in data quality and compliance. In this column I will drill down to the technical issues to look for. These data quality best practices will protect you and raise your quality game for marketing and customer contact.
Know Your Customer
You need to know whether incoming contact data is genuine, accurate, and valid. This requires automated validation tools that at a minimum can detect incorrect contact data, common forms of fake information, address validity, and deliverability. (Note that these are not all the same thing; a valid street address may include an undeliverable suite number.) Because contact data changes constantly, make sure your tools use authoritative and continually updated data sources such as the United States Postal Service or Canada Post.
Evaluate Inbound Leads
Some tools take the verification process a step further and cross-validate contact data against numerous sources to help quantify whether it represents a "good" marketing lead. You may even use publicly available data sources to fill in any missing contact data. Either way, you want your data to at least be clean and correct at data entry time.
Validate Each Touchpoint
Contact-data records are multidimensional sources of perishable information. A bad phone number can cause you to run afoul of TCPA; a bad email address could put you in jeopardy with the U.S. CAN-SPAM act. Make sure you validate each contact touchpoint that may be used by your organization and its various departments, now or in the future.
Gathering additional geographic information about your contacts may be important at multiple levels. First, if you do business globally, you must identify whether a contact is in a location such as Europe that is subject to tighter data privacy and marketing regulations. Second, you may need geographic documentation for industry-specific compliance issues such as the U.S. Community Reinvestment Act, which requires lenders to prove they aren't redlining specific low-income neighborhoods.
Lather, Rinse, Repeat
Many compliance issues revolve around data that was good at one time but has changed as people move or change jobs. This means you must have a process in place to revalidate data at the time it's used as well as the time it's entered.
A Final Word
Compliance is a tool for growth. The landscape of sales and marketing is changing quickly, and most new privacy laws were created in response. Consumers hate interruptive marketing and want quality relationships with their business partners. It is a new era where the customer is in charge, as he or she always should have been. By putting a renewed focus on contact-data quality, you can leverage this new era of marketing while protecting your organization from unnecessary risk.
Geoff Grow is the founder and CEO of Service Objects. Originally founded in 2001 to solve problems of inefficiency and waste through mathematical equations, Service Objects has validated and improved more than 3 billion contact records for over 2,500 clients. You can contact the author here.