Remember being a child and finding something which seemed particularly valuable. Since you found it, naturally it was yours to keep. Pitney Bowes Software Systems (PBSS) puts a slightly different spin on "finders, keepers."
The "finding" that PBSS can accomplish involves your customers. But don't you know your customers better than anybody else? You'd expect the answer to be "Yes." However, the reality is that Pitney Bowes Software Systems knows how to find your customers better than you do. Fortunately for you, once they find them, they don't keep them you do. And, once PBSS has "found" your customers, they can also help you communicate more effectively with them. Imagine the positive impact that can have on your company's bottom line.
Pitney Bowes Software Systems (PBSS) is a division of Pitney Bowes and part of its strategic business unit called Software Solutions. This division became a part of Pitney Bowes in 1988 when Pitney Bowes acquired List Processing Company. Initially, PBSS focused on updating databases around America to include ZIP codes in order to automate mail delivery.
Michael B. Cooper, president of Pitney Bowes Software Systems, explains, "Back in our early days, we were happy if the database was about 75 percent correct. Now, when using PBSS products, top consumer databases are between 92 and 96 percent correct," he says. "Correct," he continues, "is defined as having a correct address that matches an address in the USPS database. And for years, that was all that we did enable our clients to understand how people actually expressed addresses and make them deliverable."
Cooper joined PBSS in 1993 as president. "Basically, my job has been to grow PBSS into a financially successful division of Pitney Bowes. We've been able to accomplish that through our data quality products and our document transformation services," he states. "When I joined PBSS it was a very single-focus company, and it was not growing to anybody's satisfaction. I like to see things grow, and I am very proud of the good top line and bottom line growth that we have achieved. What's really good, too, is that people in the company have had an excellent opportunity for personal career growth," Cooper adds.
Cooper points out that the main business driver for PBSS growth has always been responding to customer problems. "The model of this business is to be market and problem- oriented. We want our technology to be a means to an end, and not the end in itself. Additionally, we have trained our salespeople to deal with business issues. Our expertise is what we want to be known for our ability to solve business problems."
Reflecting on his early years at PBSS, Cooper explains how customers' problems directed the growth of the company. Through discussions with clients, Cooper identified that in addition to needing the right addresses for their customers, PBSS clients also needed to be able to identify the right customer at each address. Additionally, PBSS customers wanted to be able to track customer moves. "In response to those needs, we focused on developing a product line that was customer information-oriented, a product that would help our clients create clean information that was timely and complete. Our research indicates that, on average, 15 percent of the information contained in a company's database is flawed. Poor quality data makes it impossible to communicate with customers, resulting in 'lost' or incorrectly targeted messages that negatively impact a company's bottom line. Now when organizations think of how they can solve problems of this type, they look to PBSS and our Customer Information Management product line," Cooper states.
"The second part of our business," Cooper continues, "is oriented around transforming documents. This is closely related to customer information management. Our Documentation Transformation product line automates mailings to maximize postage savings and ensure the effectiveness of mailings."
Cooper states that the connection of these two product lines will enable exciting innovation for PBSS. "Our unique capability to listen to our customers is enabling us to integrate these two technologies to create a new line of customer transformation products. This enables our clients to more effectively communicate with their customers. For example, when a customer record is updated to reflect a move, that should trigger the mailing of certain documents to that customer. Or, if one of the members of a household dies, that death should trigger that communications be directed to another member of that household. This new product line will enable our clients to efficiently react to changes in their customer database we call it event-triggered marketing," says Cooper. "We help our clients connect customers and documents in fact, that has become our mission statement," he adds.
One of the obstacles that PBSS faces each day is convincing potential clients that they do, in fact, have to find some of their customers. Often, companies don't realize the data quality problems that exist in their data warehouse or customer databases. Cooper provides the example of a retailer that mails catalogs to customers or potential customers. Standard practice for this retailer is that if a customer does not have an apartment number or street number, the names are thrown out no catalog is mailed. Cooper explains the ramifications of that action. "Literally every time they do a marketing run, they throw out six percent of their files, right off the top. Then, we come in and we're able to give them an uplift in apartment numbers and street numbers, and all of a sudden they've increased the numbers of customers to whom they can market. And, since this retailer knows that an average customer who receives a catalog will spend $250 a year, even a one percent lift very quickly translates into millions of dollars of revenue," explains Cooper.
"We're breaking down an old paradigm," Cooper states. "There is a wall of resistance. No one wants to admit that their data may be flawed. And, it's not just the incomplete files that we can correct. I recently visited a company that assumed all of their problems were due to missing or incomplete addresses. We requested that this company provide us with their 'good' customer records so that we could do testing. The company claimed their 'good' files were perfect. Needless to say," emphasizes Cooper, "they were quite surprised when we corrected 20 percent of the names and addresses in their 'good' files."
"When we talk to potential customers," explains Cooper, "we explain that postage savings realized from our address correction services are not the big payoff. The real payoff is in the marketing enabled by correctly identifying customers to facilitate a better customer relationship. Even if you're sending them bills, don't annoy them with a misspelled name or incorrect address. Or, don't give them reasons to call you if you are simply informing them of new services or products. A typical bill costs about 45 cents per customer; but if that customer picks up the phone to call you to tell you about an error in your communication to them, that call typically costs you $10 or $15. We help our clients transform the effectiveness of their mailings."
The recent flurry of mergers and acquisitions has also created a huge demand for PBSS services. As an example, Cooper cites the case of a bank merger where the customer records of 30 banks across the country needed to be combined. "Banks typically merge to increase their ability to cross-market. They are not buying clients, but rather are adding customers who may be able to take advantage of other products and services provided by the merged entity. The problem arises since it is highly unlikely that each acquired bank expresses client data in the same way. But in order for cross-marketing to be effective, these records need to be merged not only for names and addresses, but also for types of services each customer is currently receiving. It would be a very poor marketing effort if a customer was approached to inquire about interest in opening a brokerage account, only to find out that they already have such an account," explains Cooper. "Our Customer Information Management services can be used very effectively in this type of situation," he adds.
While the Internet is generally lauded as an outstanding vehicle for reaching customers, Cooper explains that it creates a whole new set of data quality problems. He explains, "We know that data entry groups have about a 30 percent error rate when entering raw data. On the Web, the opportunity for a person to mis-key and misspell the information entered goes way up. Many people are not very careful, even when keying their own information on an Internet site. The further you get away from any type of real contact with the customer, the higher the risk is that the data you're capturing is wrong. And, unfortunately, the Internet also introduces the very high risk of fraud," Cooper emphasizes.
"We want to be sure," Cooper emphasizes, "that companies recognize the importance of connecting customers to documents and the tremendous revenue gains from each incremental gain in quality data. Finding and keeping customers in this highly competitive global marketplace is one of the top differentiators between market laggards and market leaders."
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