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Portugal: A Population of Global Explorers and Diasporas

Vasco da Gama Bridge

Vasco da Gama Bridge

I am sitting in a nondescript office in the harbor sector of the city of Lisbon looking out at the beautiful Vasco da Gama Bridge. This bridge is the longest bridge in Europe spanning over 12 kilometers across the Tagus River in Lisbon. While this bridge is a modern wonder, the discussion taking p
lace inside the office is also a bit of a wonder in the world of global identity verification.

I am reviewing the results of a test file with our Portuguese Data expert. We had originally processed his file and achieved somewhat lower results than desired. The timing of the file processing and my trip to Portugal allowed for me to sit down directly with him and a colleague to review the results and better understand why the results were so low.

One of the first things we discovered about the data is that a percentage of the data was made up of foreign names meaning non-Portuguese in origin. As a result, these people were likely not citizens of the country but might still be residents. Portugal is unique in Europe because it has a large and growing population of ex-pats who retire there from the United Kingdom and France. The way our expert described it is that Portugal was a country where “many people are passing through”. Some stay for a little time and some stay forever. Given the temperatures, the beauty of its beaches and the great cost of living I completely understand this.

So while we could not accurately validate those people with our Portuguese Identity Verification we were able to architect within our system to run those people who did not validate in Portugal through our UK and then French Identity Verification providers all within the same system. This “waterfall” approach allowed for us to gain some immediate lift in the results and better validate the ex-pats that had settled in the region.

The next data validation challenge that was unique to Portugal (and likely unique to Brazil) was what I dubbed “The Maria Effect”. A large number of the women in Portugal are named Maria. This is a statement made by a guy who has spent more than 20 years working with consumer data in Portugal so I am going to choose to believe this statement of fact. Many of the Marias have secondary first or middle names which create differentiators (example: Maria-Theresa). Additionally the last name of her family and/or the last name of her husband might be used when completing some types of documentation thus Maria becomes possibly Maria Theresa de Salvo Carlos de Herrera. This a complete legitimate full name. At 32 characters this name likely would not even fit into most online data entry fields but that is the smaller of the concerns. Maria may also express her name as any combination of the above depending on how she choosing to distinctly represent herself. So she might be Theresa de Salvo or Theresa de Herrera or Theresa Carlos de Herrera. In all of these examples Maria may be substituted for Theresa creating a database of Marias that may or may not link back to a known identity in Portuguese data systems. This is where customized and localized fuzzy matching and rules logic are needed to ensure the best possible match result when attempting a identity verification for this country.

The next example of local data uniqueness is the “da Effect”. Many last names in Portugal have a preposition of da or de associated with them. Names can thus be represented in systems as Vasco da Gama or Vasco Gama. In both cases they are the same person. Many identity verification systems may choose to work with a hard 1:1 match and thus this would not generate a match on this particular name. Other systems may elect to drop the da/de as extraneous characters and not recognize them as part of the last name thus corrupting the name and likely generating a poor response.

After reviewing all of these examples we were able to ensure that we tuned our inputs to properly parse data going into our platform for Portuguese nuances. This allowed for us to create a better result and improve the overall match rates. This in turn helps satisfy our customer’s needs which at the end of the day was the goal of the conversation.

The above is a great view on how hyper-local knowledge and skills will produce quantifiably better results for global eKYC and identity resolution efforts. Whether it is mobile customer onboarding at BBVA or HSBC; or fraud risk analysis at Kreditech of fulfillment of European 4th Money Laundering Initiative compliance regulations between customer transactions. At GDC we enjoy learning these nuances from our local partners and much like the vision of da Gama we seek to spread this knowledge throughout the world.

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Our Report Card

Today is a memorable day for GDC. 18 months ago our first customer went live with our Worldview product, relying on GDC and Worldview to provide Address Verification. This client took a chance –to meet their needs for the best verification rates possible, they had to embrace a new model.

When we first speak with clients we explain our model – we find, qualify and integrate local companies that have the best address processing technology in their country. We harmonize our partner’s technologies and serve up all of that global value with a single OnDemand API. We understand that this model differs from other companies who build a single product, from a single data source, delivered the same way year-after-year.

Our clients embrace Worldview for innovative use cases. Companies validating address information as a key component of Identity Verification. eCommerce companies supporting cross-border commerce. Global organizations verifying and locating millions of points of interest. Delivery companies testing addresses to de-risk their logistics processes.

Now that we have been live for 18 months we can test the assumptions we made at the beginning. We had certain beliefs at the onset, how did we do? Let’s look at 4 of our initial suppositions.

Local Partners = Local Insight

We believed at the beginning that local partners would understand their country best and three themes have emerged. Within their country our partners handle regional variation, bad data patterns, and multilingual challenges better than anyone else.

Local Partners = Access to Unique Local Data

We thought that our partners would have insight on accessing, integrating and utilizing additional local data into their solution. GDC partners understand how to blend unique data into their solution, and they have the time and focus to do this work. Over half of our partners are using some form of data that is not being used by a global player.

Local Partners = Battle Tested Technology

Great address technology only gets great because it gets utilized; no one starts with an A+ product. We surmised our partners’ technology would be battle tested. For example, one partner’s offering is used by their country’s national post, and is accessed over a million times per week; the national post validates the goodness of their technology. This is representative of all of our partners – their technology is great because it gets used in-country, by clients that demand the best results.

Local Partners = Awesome Responsiveness

We knew our partners would be responsive in many ways. Our partners react quickly to new use cases and new address forms. Last month one of our customers had an issue with how a certain address suffix type was being handled, a pattern that would never be used in-country. Our partner enhanced their behavior and a correction was available the following day. Our partners are creating the next required services. A great example is our India partner that launched an advanced service. Our partners must continuously innovate; they don’t have the luxury of only revisiting their technology once a year, or when enough complaints for their country have piled up.

Where Are We Now?

After 18 months we have proven our beliefs at the beginning of this journey. We have worked with partners and clients that are willing to challenge conventions for how global address processing gets done. We continue to add countries to Worldview, and continue to tune Worldview to handle innovative eCommerce, Identity Verification, global point of interest, and delivery logistics use cases.

So that’s where we are 18 months since going live. Let’s see what the next 18 months brings. As always, we enjoy speaking with clients about how we can help you solve your business problems. Give us a shout and let’s see how we can expand your Worldview.

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New Advanced Address Verification Services in India

At GDC we are continuously searching the globe for new partners, new countries and new services for our customers; we enjoy telling the stories about our discovery and availability of these services!  We also work with our Partner Community to add additional capabilities to existing Worldview countries, and we are excited to announce the availability of Advanced Address Verification for India.

Our global expertise tells us that India is the most challenging country to provide great Address Verification due to the size of the country, the complexity of address information, and the regional variations of address information.  We hear from our customers and read recent studies that project tremendous opportunity in India for companies that are using the best available Address Verification solutions for eCommerce, Finance, and Logistics business problems.

Working with our premier Indian Partner, our Advanced Address Verification for India provides you with the most reliable solution for interpreting Indian Addresses.  Do you know that across India there are over 400 different building descriptors?  We do.  Our highly configurable solution reliably parses, interprets and verifies all of the components of an Indian address – road differentiation, sublocalities, localities, pin codes, buildings, building numbers, wings, floors, and more.  We can turn on additional custom capabilities to meet the needs of your business problem – delivery flags that set shipment expectation, corporate address indicators, and rural/urban coding.

We are always excited to open up additional services for our Worldview customers. If you want to understand more about Advanced Address Verification for India and discuss the challenges of addressing in India, give us a call. We’d love to help expand your Worldview.

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GDC Onboards France’s Best In-Country Data Provider

This week at GDC we’re thrilled to add a new partner from France, bringing the best in-country data solutions for French address verification. This is an important addition for us; at 62 billion dollars in eCommerce sales, France is the sixth largest eCommerce market worldwide. On top of that France is a wired culture, and nearly 89% of the country’s internet users are shopping online, with individual purchase rates going up. From both a local and global perspective, France is an important player in the market and eCommerce companies need to have a reliable solution when it comes to French data.

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But the value of having our best in-country data provider goes beyond just meeting the market. When it comes to culture, French consumers place a high value on service quality. A DPD survey of online commerce habits showed that one in five deliveries in France was problematic, and 49% of the time this was because the delivery was late. They go on to show that French consumers overwhelmingly (84%) prefer things delivered directly to their home, rather than to post offices or other pick up sites.

 

eCommerce companies recognize the implications in this. They want to be able to attract new customers in France by offering convenient, on-time door deliveries. They also want to retain customers by making sure that they can follow through on that promise. After all, nearly 70% of customers said they wouldn’t buy again from a website that didn’t deliver on time.

 

This is a challenge in France. Delivering to secluded cottages in Champagné can be just as difficult as delivering to a one-room apartment off of la République in Paris because of how address information is used and changed. Generic data, which might be managed anywhere in the world, is never going to be able to effectively keep up with the dynamics of French society. That’s where our local data solution can provide the most ‘lift’.

 

The Dynamic French Landscape

 

Last spring, I visited a friend in Paris while checking up on some of our local European providers and I needed a couple of books. They happened to be on Amazon.fr, and I asked for the building’s address so I could get them delivered to me while I was there. My friend told me that it was better to send them somewhere else, since most of the packages for that apartment had never showed up at all.

 

Being in this business, I got interested and dug a bit deeper. The apartment did not have a number, which is common, and that the name used for deliveries was of a prior leaser, not my friend’s name, which is also common. The process of updating address and identity information with La Poste, the French postal service, can be prohibitive and so data can often be left outdated. In this case, the “address” of the apartment was under the name of a woman who had been leasing it 4 years ago. It’s like if I wanted to send something there, I would have to know the history of the apartment ownership to do it.

 

The reality of these deliveries is that the package might show up at the right building, but after that it’s anyone’s guess. It might end up at the right apartment, it might end up at another apartment, or it might not get delivered at all. In the end, I sent the delivery to an office in town that said they had no problems with deliveries. But if I had wanted to send it to that apartment, I would have had to write several names down on the package to get it to the right place. Depending on how that package changed hands it might still have gotten misplaced.

 

Local Data Knowledge as a Solution

 

This is obviously not the optimal way to do things, and that’s where GDC’s unique approach to address verification comes in. When we set out to solve this problem, it was apparent to us that generic datasets can be useful but are inherently problematic. They aren’t managed by people that understand the context of the data and they can often go without updates. At GDC, our team fans out across the globe to find the best LOCAL providers of knowledge, and then puts those companies through rigorous testing to make sure that their data is up to scratch. The result is what we call the ‘intelligent stack’. We take an address and redirect it to the best in-country data source in our consortium.

 

The results of using these local data sources are impressive, and our new partner in France is a powerful example of this. They combine data from marketing databases and private commercial sources that has coverage all across France and can have better resolution than other datasets. Our partner is also updating this data constantly, receiving information from sources constantly and applying address and verification rule changes at least once a month.

 

This kind of data and refresh rate prevents problems like the one I had in Paris, and can improve delivery reliability overall. Companies know this is critical to the French market, and they know just how fickle consumers can be if deliveries aren’t right the first time. It’s a survival need, and for a dynamic like France, generic data just doesn’t cut it. Businesses need local data for France, and with our newest French partner, we are pleased to deliver for our Worldview customers. If you are looking for a more reliable solution to delivering in France, or anywhere else in the world, please give me a call. We’d love to help expand your worldview.

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GDC Integrates Best Turkey Address Partner into Worldview

This week we announce the integration of Turkey’s best address intelligence service into GDC’s Worldview platform. Our partner, an Istanbul business with over 10 years of experience working closely with the Turkish government, demonstrates the command of local nuance needed to be the country’s most reliable address resource. As I discovered on a recent trip, if ever there is a country where local details make a difference in getting the right address…it’s Turkey.

The Turkish Opportunity

Istanbul straddles the East and the West. Standing on a bridge watching ships traffic the waterways and listening to the call to prayer in the background brings into stark clarity – I have ventured into a brand new cultural world. While Turkish commerce maintains its traditions of merchants peddling wares in the Grand Bazaar, it has evolved to also include the most sophisticated forms of cross-border eCommerce.

The world’s great brands recognize that Turkey is an exciting market. eCommerce has grown over 500 percent since 2009, most of which has come from consumers buying goods that are shipped from out of country. And the youth are driving the economic boom. Less than 15 percent of the population is over 55, meaning a tech-savvy and brand-conscious generation is defining the country’s new buying habits.

But when it comes to addresses, businesses shipping product into Turkey are going to need a lot of local help.

My Address Confusion in Istanbul

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While in Istanbul I had a couple of key experiences that highlighted the difference and difficulties of address verification in a city in this region.

The first was getting to my hotel. My bus dropped me off in the city’s famous Taksim Square, a tightly-packed area with nearly 20 hotels all within a few blocks. I tried to use my phone to navigate to my hotel’s address, but the map could only get me to the center of the square. It could not find the location with any greater precision, so – in an effort to triangulate my way to the proper destination – I resorted to stopping into shops and asking clerks to point me in the right direction. Even though I had the proper address, the mapping technology was not able to provide the granular result I needed to find my hotel.

Then I had to get to our local partner’s office. Istanbul is massive with many districts and neighborhoods. I gave the taxi driver the office address, and he immediately honed in the district, then found the proper neighborhood and upon “arrival” he starting asking locals where to find the final destination. Why? Because the address I had was missing a crucial piece of information…a proper cross street. As I came to discover, in much of Turkey you need to provide cross street information both when getting directions and also to ensure prompt and accurate delivery.

These kind of details are often overlooked by global address verification systems that rely on generic, international standards for formatting and validation. As I’ve found over and over again in my long address intelligence career, you simply cannot know the nuances of a country unless you are working with partners that live there, speak the language, and provide address services to local businesses that rely on accuracy. That’s the power of local intelligence in making sure you get your addresses right.

Dinner on the Bosphorous River and Reflections on Local Intelligence

On my last night in Turkey the founder of our partner company squired me out of Istanbul, bringing me north along the Bosphorous River. We traveled until the road ended at a quaint fishing village, and we sat outside on a chilly evening, dining on some of the best seafood I’ve ever had in my life.

At dinner we spoke at length about his company and how they apply local knowledge to help businesses get Turkish addresses right. He talked in length about serving Turkish companies, taking their feedback, and constantly improving his address data and rules. We spoke about the growth opportunities that his clients were experiencing in Turkey and beyond. We discussed the expansive world of international commerce and yet how so much of success depends on getting things right on a local level.

As I peered out into the night, I saw the flashing red lights of a freighter cruising up the river. My colleague pointed out that around the bend, and some miles away, the Bosphorous empties into the Black Sea. I couldn’t help but reflect on how close we were to Crimea and Ukraine, countries that had always seemed to me to be so different from Turkey, but are so close and so connected.

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GDC’s Integrates New India Address Partner into Worldview

This month GDC welcomed to the consortium a best in-country address validation solution for India, an exciting addition to the Worldview global platform. India is the world’s second largest country in terms of population, its consumer class is growing by leaps and bounds, and rising income is creating an appetite for eCommerce goods. Internet orders are literally doubling every few months. According to Morgan Stanley estimates, Indian online sales will grow from US$3 billion in 2013 to US$100 billion in 2020.

But its address infrastructure is notoriously under-developed, and this creates massive headaches for eCommerce companies that want to ship products to Indian customers. They’re afraid of the risk that comes with the unreliable address services they get from the generic global verification systems (a topic we covered in detail in my Open Letter last month). They want to sell their goods to this massive consumer class in India, but they’re hesitating because of the costs that come when you can’t verify addresses with confidence. Like mis-deliveries, ship-backs, lost shipments, credit card chargebacks, and frustrated customers, to name a few.

That’s why we’re excited to offer this new data partner in India. As a Mumbai-based business, it’s a truly LOCAL solution providing LOCAL intelligence. The company has enriched India Post address data by layering in alternative sources and adding business logic that helps resolve the most common address mistakes. Our own tests of their data demonstrates significant lift over what’s offered in the major generic global systems. And they are constantly refreshing the information to keep ahead of the quick pace of construction as India’s economy keeps building new homes and apartments and demolishing old ones.

In particular, this partner is able to provide more granular delivery details in more cities, suburbs, and villages. While the generic global systems rarely provide verification below the city or post code level, this partner is able to verify many more addresses to the street, premise or even delivery point level.

This is what LOCAL address solutions do, and it makes a big difference to eCommerce businesses (both the big platforms and the individual merchants) seeking growth in the Indian market. Let me explain…

The India Address and Delivery Challenge

Last month Wall Street Journal reporter Sean McLain shadowed two motorcycle deliverymen as they hauled eCommerce goods through the streets of some of India’s largest cities. One worked for Flipkart, an enormous Bangalore-based online marketplace, and the other for Amazon.

Each would pile as much as 150 pounds into their backpacks and fan out through the cities, suburbs and villages to deliver such sundry goods as laser printers, coffee makers and six-packs of Coca-Cola. They’re expected to make at least 45 deliveries each day, but the address infrastructure in India makes this no easy task.

Delhi, for example, is a city of nearly 17 million people. Addresses are a combination of neighborhood names, block numbers and house numbers. Many house numbers aren’t even arranged sequentially along a street. Three houses in a row might skip from 225 to 657 and back to 301. The complexity of it means deliverymen spend a lot of time asking for directions. When following the Amazon driver, the

reporter noted that each delivery “involved at least four stops to ask cycle-rickshaw drivers, security guards or roadside barbers for directions. Each time the response was the same: an outstretched finger and a one-word answer: ‘Straight.'”

Neither Amazon nor Flipkart trust India Post or other traditional delivery services to get their parcels to customers. They’re investing huge sums of cash to build their own delivery infrastructure. This is how desperate they are to build local intelligence to make sure packages arrive on customer’s doorsteps quickly. Even then, it’s all terribly inefficient.

There’s a better way.

The Difference in LOCAL Intelligence for Address Verification

Even though they want to expand their businesses into India, eCommerce merchants are wary of the address and delivery challenge. Generic global address services aren’t helping. In most of India they can only verify addresses to city or district level. Think about what that means. They expect you to ship products – potentially expensive products – to an address about which they can tell you nothing more than “we know the city exists.” It means you have to ship first and then hope the deliverymen figure out the neighborhood, street and house number portions of the address. That creates too much uncertainty for merchants.

With our new data partner in India, GDC is able to flip that equation around. Rather than sending the package and hoping the deliveryman’s local knowledge is sufficient to find the address, we use our partner’s local intelligence to provide address detail to the street, premise and delivery point levels. We can also tell you if an address is not deliverable. It’s like having the local deliveryman in Delhi tell you the address exists before you ever ship the package.

For eCommerce merchants holding back from the Indian market, this should give you reason to reconsider. There’s a massive growth opportunity there, and in using our local intelligence for address verification, you can be confident your parcel will arrive even when you’re using local delivery services.

For the big eCommerce platforms – even those that have invested so heavily in these armies of motorcycle deliverymen – there’s an opportunity for you, too. With this local intelligence for address verification, you can stage your orders for more efficient delivery. If the goal is 45 packages a day per deliveryman, imagine how much throughput you could get if he started with better address information…if he didn’t have to stop four times to ask directions for each package!

So, we welcome our new India partner into the Global Data Consortium. We’re excited to open up access to India for Worldview customers. And if you’re looking for help in India, or any other country in our global platform, give us a call. We’d love to help expand your Worldview.

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Post-Script – The Innovator’s Dilemma and Local Disruption

I recently published an open letter to the address verification industry, a group to which I’ve belonged professionally for over 20 years. In it, I critiqued our lack of innovation over the years and suggested another way: making global address verification better by using local intelligence.

As hoped, the letter spurred a lot of interesting dialogue. In hopes to keep the conversation going, I’m posting a series of blog entries that dig deeper into the themes of technology, address data and how we can meet the needs of our most demanding customers.

Part I: History Lessons

Part II: A Fateful Trip to Brazil and My “Eureka!” Moment

Part III: Making Local Intelligence a Reality in Global Address Verification

Part IV: Post-Script – The Innovator’s Dilemma and Local Disruption

In 1997, Harvard Business School professor Clayton Christensen published his landmark book, The Innovator’s Dilemma. His guiding questions: why is it that innovation always seems to come with disruption? True innovation rarely comes from market leaders with established products. It always comes from an upstart with little to lose and a scrappy mentality.

The minicomputer didn’t come from IBM, Christensen instructs us, though IBM had the deep pockets, experienced sales force, and engineering know-how to make it happen. No, IBM kept clinging to the profits from its dominant mainframe technology before Digital Equipment Corporation (and a host of other upstarts) swooped in and launched the better, faster, cheaper alternative.

History will show the global address verification market is going through a similar disruption.

On the surface, it’s baffling that the older global address companies aren’t pushing local intelligence into the verification process. The new model makes so much more sense. But looking at it through Christensen’s innovator’s dilemma lens, we can begin to understand why. They’re captive to their own success; to the demands of their big customers. Rather than look to the future of our industry – the rise of cross-border commerce, increasing parcel shipment, and consumers demanding ever faster delivery – they remain focused on protecting what they have.

It’s a hard cycle to break.

They aren’t doing it, and I don’t expect that to change. What I do expect is that Global Data Consortium continues leaning into this new and developing market. We will build a critical mass of data partners providing best in-country solutions; we will help our partners continue improving their data through faster feedback loops; and we will make our services less expensive with time (though, perhaps surprisingly, it’s already price competitive with the major global generics).

This is the way of disruption. Quality keeps getting better, prices keep coming down, and eventually even the most price-sensitive customers want the better service.

Five years from now I predict that most of the market has shifted to this model. We will no longer accept “good enough is good enough.” We’ll demand innovations that move local intelligence (that’s so rich at the delivery level) upstream to the address verification process. Rather than depend on local intelligence to fix it, our local data will prevent the problems that lead to mis-delivery and delays.

That’s when we can say the local disruption has truly taken hold. That’s the future that I want GDC to be part of.

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Making Local Intelligence a Reality in Global Address Verification

I recently published an open letter to the address verification industry, a group to which I’ve belonged professionally for over 20 years. In it, I critiqued our lack of innovation over the years and suggested another way: making global address verification better by using local intelligence.

As hoped, the letter spurred a lot of interesting dialogue. In hopes to keep the conversation going, I’m posting a series of blog entries that dig deeper into the themes of technology, address data and how we can meet the needs of our most demanding customers.

Part I: History Lessons

Part II: A Fateful Trip to Brazil and My “Eureka!” Moment

Part III: Making Local Intelligence a Reality in Global Address Verification

In 2010, on a long plane ride back from Brazil, my mind was racing with ideas. Two years prior, an eCommerce executive had challenged me (read that story here) to solve the last mile problem of global address verification. In his world, every package had to be delivered and as quickly as possible. He couldn’t afford to ship to bad addresses, but existing global address verification systems weren’t reliable enough. They depended too much on local delivery intelligence to fix address mistakes. His criticism stung because I was COO of one of those businesses, but I knew he was right.

I had gone to Brazil to ask its postal operator, Correios, to give my company an update to its address database. That had not worked, but in a stroke of serendipity, I met the owner of a business that maintained more complete address data than Correios and that refreshed its addresses constantly. (See that story here.)

This was exactly what the eCommerce executive had been asking for! And if it existed in Brazil, there must be similar services in other countries. I began talking with my colleague (and eventual co-founder) about creating a better global address verification system; one that used the local intelligence of best in-country sources of data; one that kept up with the constant changes of addresses by constantly refreshing its data. If we could build access to a network of these data sources, we could create an entirely new (and more reliable) model for global address verification.

If we could build something that met the lofty requirements of eCommerce, where every package counts and there’s no margin of error for bad addresses, we could also help the companies on which the eCommerce industry leans for help (logistics, fulfillment and delivery). We could help data cleansing services that need more reliable results than the older global address systems provided. Perhaps we could even help software companies that do mapping and navigation based on addresses.

I began sketching the blueprint for a company based on these ideas. It would be complicated, no doubt. We would have to…

  1. Identify the Right Partners and Build Relationships

Just as the best address provider in Brazil had been hard to find (really, there was no small element of luck that I met him on that trip!), so would its counterparts in other countries. I would have to rely heavily on my network of friends in the address data industry to identify the right partners.

And I would need to keep my passport up-to-date…this would not be a job I could do while sitting behind a desk. I was going to need to spend a lot of time traveling to meet data providers, vetting them face-to-face to establish trust and to feel confident they play by all the right rules in collecting and sharing their data.

  1. Test to Verify

Most data providers say they’re the best, so frequent testing was going to be critical to finding the actual best in-country partners. We would need to create clear testing parameters to demonstrate these companies provided more reliable address results than postal operators.

  1. Build Sophisticated Technology

Finally (and it almost seems funny that this comes third), we would have to invest in a robust cloud-based technology platform for integrating with our data partners and providing our customers with a single place to access the world’s best address data. This would be the only way to take full advantage of their refresh cycles (the feedback loops that keeps their address data current).

This was the basic blueprint, and later that year my partner Charles and I formed the Global Data Consortium. In the five years since, we’ve been executing on the plan, step-by-step. I flew around the world finding the best data providers for key countries. I developed friendships that turned into trusted partnerships. We tested everyone’s data to verify its quality and reliability. And we developed the GDC Worldview product – an API management engine and data validation platform – to provide our customers a single point of access to the world’s most reliable address data.

We’ve come a long way since Brazil! Worldview now has over 30 countries covered by best in-country partners, and we’re adding up to four new ones each month.

It’s a solid start, and we keep investing in Worldview to make it better for our existing customers and anyone for whom the old global address systems just aren’t good enough.

Here’s my challenge to consumers of global address verification services: If you’ve found that the generic systems aren’t providing the results you want; if bad address information is leading to mis-delivery or slow delivery; if your service isn’t formatting addresses in the way your global customers expect to see them…there’s no reason to be captive to “good enough.” You can do better.

If that describes you, let’s talk. Let’s set up a test to see how our best in-country data partners use their local intelligence to fix problems before a package ever ships.

Let us improve your world view.

Next: My final thoughts in this blog series…The innovator’s dilemma and predicting the future of the global address verification industry.

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A Fateful Trip to Brazil and My “Eureka!” Moment

I recently published an open letter to the address verification industry, a group to which I’ve belonged professionally for over 20 years. In it, I critiqued our lack of innovation over the years and suggested another way: making global address verification better by using local intelligence.

As hoped, the letter spurred a lot of interesting dialogue. In hopes to keep the conversation going, I’m posting a series of blog entries that dig deeper into the themes of technology, address data and how we can meet the needs of our most demanding customers.

Part I: History Lessons

Part II: A Fateful Trip to Brazil and My “Eureka!” Moment

In 2010 my address verification company was having trouble with Brazil’s postal operator, Correios. For ten years they had refused to provide updates of their address data to foreign businesses.

For the past 50 years building a global address database meant a company (like mine at the time) had to gather information from the world’s various postal agencies. Since addresses are in a state of constant flux (new apartments going up, old buildings torn down, office spaces partitioned into suites, etc.), we took updates once or twice a year in an attempt to keep up with the changes. Think of it like a subscription to the old encyclopedia Britannica: you would pay them to send a replacement volume periodically so your research information didn’t get too dated. Bi-annual updates were the norm. Waiting ten years, however, meant our Brazilian data was desperately outdated.

For years I had tried to break this logjam with Correios to no avail. Finally, I decided it was time to take action. I flew to Brazil one week that summer, hoping that being in country would convince them to finally meet with me.

Alas, no. They weren’t budging, and they had no interest in talking with me. But all was not lost. Rather than sitting in my Sao Paulo hotel room, I made a sales call on a direct mail marketing company. The owner and I hit it off and spent most of a day together. I explained to him my frustration with Correios. He laughed, telling me he had no problems getting updates. Then he hesitated, got a quizzical look on his face and asked me, “But why would you want their address data. It’s garbage. You should use mine instead.”

He explained further: Like most postal agencies, Correios was not very good at keeping track of its addresses. This entrepreneur had discovered that fact years ago as he started building his company. He saw an opportunity to make a reputation for himself as having the best address data in the country. Having the most accurate addresses meant more of his mailers would be delivered by the postal carriers accurately and more quickly (no need to rely on the local delivery person to fix your mistakes). This would be a competitive advantage against other direct marketing businesses.

So he built his own database, taking Correios addresses (which, because he was a Brazilian, they would update at normal intervals) and enriching it with his own efforts. He created an information network throughout Brazil, ensuring he would get notice of new and changed addresses. If a new apartment complex was coming online in Brasilia, he collected that information and made the updates. In places where data was particularly hard to get, he literally hired people to walk the street and gather address information themselves. He even created an immediate feedback loop to correct bad addresses: When an envelope was returned as undeliverable, his people would quickly update the database.

Most impressive of all, he created enhanced postal rules to account for local nuances and expectation. If a Rio de Janeiro neighborhood called itself by a name not recognized by Correios, say for vanity reasons, his system caught that and during verification would suggest a change more likely to get the mail delivered quickly and in a format the recipient expected to see.

As a result of his innovations, he had created a competitive advantage for his business. It was thriving. Other businesses needing accurate Brazilian addresses were seeking his help. Courier services, utility companies, even retail stores (who needed better address verification in order to extend credit to people living in the working-class favelas). Correios addresses weren’t good enough, and my new friend had established himself as the superior alternative.

While he had focused exclusively on serving domestic Brazilian companies with his address solution, he was open to finding a way to help me solve my Correios problem.

This was my “Eureka!” moment. This business had found a way to incorporate local intelligence into the address verification process, and he had feedback loops in place that guaranteed rapid data refreshes. If going through Correios was like subscribing to the encyclopedia Britannica, going through him was like having a team of experts building a maintaining our own personal Wikipedia for addresses.

If this worked in Brazil, there must be similar services in other major countries. And if I could find a way to bring it all together on a single technology platform, we could solve that eCommerce cross-border problem. We could bring local intelligence into the address verification process.

Next: We create the blueprint for the Global Data Consortium and begin building Worldview.

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Local Intelligence in Global Address Verification: History Lessons

I recently published an open letter to the address verification industry, a group to which I’ve belonged professionally for over 20 years. In it, I critiqued our lack of innovation over the years and suggested another way: making global address verification better by using local intelligence.

As hoped, the letter spurred a lot of interesting dialogue. In hopes to keep the conversation going, I’m posting a series of blog entries that dig deeper into the themes of technology, address data and how we can meet the needs of our most demanding customers.

History Lessons

Let’s start with some of the history that made me aware of the problems we have in the address verification industry.

In 2008 I received a call from an executive with a prominent eCommerce company. He had been piloting a cross-border initiative in which customers from other countries could order from his website and he would ship their products directly from a U.S. distribution facility.

The experiment was not going well, he told me. Deliveries were getting lost, shipped back, or just taking longer to arrive than he (or the customer) expected. The problems stemmed from addresses. “Could you help me?” he asked.

I had worked in the address data industry for 15 years at that point and was currently Chief Operating Officer for a leading provider of generic global address verification services. We had accumulated a massive database of addresses which we licensed mostly from national postal operators. It covered 240 countries and territories. We solved the very problems the eCommerce executive was describing. Or at least we thought we did.

I asked him to send me some address files, and I’d have my team run them against our database.

When the results came back, I was pleased. We had cleaned up his files nicely and our analysis said he could confidently ship his packages to nearly every address. But when I called him back to share what I thought was good news, he just sighed.

“No, this won’t do at all,” he told me. “You’re quick to tell me to ship, but I happen to know these addresses are incomplete. You’re asking me to put my packages into the postal stream and trust that the local infrastructure to do the dirty work to get it delivered.”

He had conducted the same test with other “generic” global address services, and they all came back the same. As hard as I tried, I didn’t have a good response to his points.

“When you figure out how to solve that last mile problem before I ship,” he concluded, “give me a call. But for now what you have just isn’t good enough.”

His criticism stung, but it wasn’t entirely unfair or inaccurate. Since the dawn of our industry in the 1960’s, we global generic address companies had struck a Faustian bargain with our primary customers – direct mail businesses and the vendors that provided them support. If we could supply them a good enough service for a cheap enough price, the bargain went, they would license our address data. But if we raised the price for any reason, they would just stop using us.

It sounded brutal (and it was), but it made sense for the problem they wanted us to help solve. They sent mailers en masse. These were inexpensive cards and envelopes that often went out in batches of many thousands at a time. It often didn’t matter if some percent of them didn’t get delivered. It was a volume game with everyone operating on tiny margins. Our job was not to get every envelope delivered. It was more of an actuarial calculation: if they could use us to cull out some small percentage of the bad addresses, the pennies they spent on us would save them at least that much in postage costs.

And then we had our dirty secret: our False-Positive Bias. If we could verify an address to a locality level, confirming, for example, that the street existed even if the number was wrong – we would call the result reliable and advise the customer to send it.

Why?

Because we knew most countries have impressive last mile delivery infrastructures. If you can get mail to the locality level, the people in the post office were really good at fixing your mistakes and getting the letter where it needed to go. It would take longer to get there because it had to go through exception processing, but the direct mail customers were generally okay with that. As long as the right percentage got through and our prices stayed low enough, the Faustian bargain held.

At the time the eCommerce executive contacted me, over 70 percent of our revenue came from customers related to direct mail. We were beholden to their requirements, and to be candid, we weren’t making very high margins ourselves. This was not exactly an environment conducive to innovation.

Without investing in a lot of improvements, we were never going to be good enough to satisfy the eCommerce industry’s needs. Their requirements were based on precision and spend – they expected every package to be delivered…and quickly! Mis-delivery cost them shipping and product losses and slow delivery cost them customers. The “good enough” approach that defined the generic global address industry – that False-Positive Bias – wouldn’t cut it.

For the next couple years I watched eCommerce trends closely. I saw cross-border shipping accelerate, growing rapidly quarter over quarter even while the address problem persisted. They hadn’t yet found good alternatives to meet their needs.

There is an opportunity here to do something useful, I remember thinking to myself, if only we can find a way to take the local intelligence that’s so good in delivery and apply it earlier in the chain of events for shipping packages. We needed to find a way to apply local intelligence in the address verification process. Before a package ever leaves the warehouse.

Two years later, during a trip to Brazil, I finally saw a way forward. More on that in my next post.