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What is the Cost of Bad Addressing?

According to an IDS report, bad data costs the US economy around 3.1 trillion dollars each year (an IBM study). For example, an audit of sorting machine efficiency at New York City’s Queens Processing and Distribution Center found that in one machine, 17% of trays were bogged down by recirculating packages, since the sorter was unable to read the address.

Companies that use private shipping companies also face seemingly small address change fees that can quickly add up and eat away the bottom line. However, the cost of wrong addresses goes beyond re-shipping fees. Here are just some of the other negative aspects:

  • Customer dissatisfaction skyrockets when products ordered, and perhaps paid for, do not arrive
  • Vital supply-chain logistics are negatively impacted, producing a knock-on effect
  • Direct mail marketing campaigns fail
  • Invoices and purchase orders sent out by mail fail to arrive, resulting in delayed payments

A great solution to these problems might be easier than you imagine. This blog shows you how to nip the problem in the bud by implementing AI-driven address normalization.

What is Address Normalization?

Address Normalization is the process of formatting an address suggested by the appropriate postal authority. For example, in the US, the United States Postal Service (USPS) Publication 28 determines and precisely defines postal addressing standards.

Address normalization involves verifying and revising address records to follow a standard format using a reliable database. It entails correcting addresses to a normalized form and checking for spelling, formatting, and abbreviation issues. Once the process completes, you’ll have flawlessly formatted and styled addresses that you can use for shipping, billing, and customer segmentation for marketing campaigns.