Shipment accuracy of 99 percent sounds praiseworthy, but guess again.
Presuming $8 million in sales and 100,000 orders, that one percent of lost shipments, or ones requiring personnel intervention to correct address data, costs you $92,500 per year.
That is how Avantiico figures the cost of bad address data. The team detailed these costs further in their September 6th webinar: Save Time, Stay Compliant and Increase Profitability by Correcting Address Data in Microsoft Dynamics 365/AX, hosted by MSDynamicsWorld. (You can download the recording here.)
What do companies require, and why?
First, they need to scrub legacy data before it is used. “People leave organizations, move addresses, and nobody really watches and pays close attention to that data unless it comes to use, and then it’s too late,” says Avantiico Marketing & Sales Manager, Amir Khoshniyati.
Thus, a second requirement is real-time address verification; this is especially crucial for companies using ecommerce platforms to move a high frequency of sales orders, Amazon style.
A third requirement is shipment assurance – can the address accept a commercial shipment? “We have really homed in on that to make sure we can decipher between commercial and residential, decipher between PO boxes for example, and also military addresses-as granular as that,” says Khoshniyati.
Avantiico partnered with Experian to develop the Quality Addressing for AX (QuAAX) real-time address verification system for Microsoft Dynamics 365 and AX. Khoshniyati describes the solution as a data “washing machine” to “rinse and repeat” and cleanse legacy address data; and to validate addresses in real time.
Lest a company think of a few mis-ships as a cost of doing business, or answer “We have people for that” when it comes to scrubbing address data, that theoretical $92,500 in losses presumes a half-hour of labor per order across all personnel involved (e.g., the shipper and order entry clerk), at an average $25 per hour. That adds up, in our theoretical 1,000 orders that require handling.
But the goal of clean address data is not just to recoup those costs. An industry rule-of-thumb is that unhappy customers make about 15 “anti-referrals,” while happy customers make about nine referrals.
So, good address data not only generates referrals, it heads off the squawkers. “Customers are much more satisfied, the organization’s brand perception is better, and all-in-all it’s an overall cost savings for everybody,” says Khoshniyati.
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