| The "Domino Effect": a compounding repercussion | | | | institutions misfortune and fuel all the collateral |
| or chain-reaction, which originates from what | | | | hemorrhaging as it evolves. |
| many consider an innocuous event. | | | | THE REPERCUSSIONS |
| Maybe the best way to illustrate this is by | | | | Reprinting and re-mailing a retraction offer for |
| example. Here's how the "Domino Effect" can | | | | prior direct mail material? |
| adversely impact a business. Granted, this | | | | (Cost: $5,240,000) Plus, production rush charges |
| example may seem a bit of a stretch, but it's | | | | (Cost: $900,000) |
| intended to illustrate how costly dirty data could | | | | Institution hiring consultant to manage new ad |
| actually become. Agreeing with the dollar amounts | | | | agency selection process; securings the services |
| is insignificant. Understanding the devastating | | | | of a PR firm for "brand damage control" and to |
| impact, which dirty data has on your organization, | | | | manage the mounting negative press coverage at |
| is. | | | | $150 per hour for an initial 90 days? |
| THE PLAN | | | | (Cost: $1,250,000) |
| A large national financial institution, using its | | | | Brand damage causing BDI and CDI to fall more |
| proprietary database of 4,500,000 high value | | | | than 40 points, mirroring an 18% loss in market |
| domestic retail customers sent out, via US mail, a | | | | cap? |
| $250,000 pre-qualified 3.5% home-equity line of | | | | (Cost: 3,343,005,000) |
| credit offer. The campaign's cost: $5,240,000 | | | | The institution hiring outside council specializing in |
| (postage, paper, printing, power, people). The | | | | advertising law at $170 per hour; securings outside |
| strategy behind this marketing tactic was to build | | | | council specializing in class-action suits at $250 per |
| a tighter bond with these customers while | | | | hour to address a suit brought on by "injured" mail |
| generating incremental revenue. However, the | | | | recipients; retaining law firm specializing in |
| inverse actually occurred. | | | | employment law at $225 per hour; contracting |
| THE FLAW | | | | with council specializing in executive compensation |
| Nearly 23% of the database, which the marketing | | | | law at $300 per hour? |
| department used, included individuals no longer | | | | (Cost: $1,756,000) |
| meeting the institution's specific criteria necessary | | | | Court fining in favor of "injured" mail recipient |
| to receive the offer. Here's the hitch: the offer | | | | plaintiffs? |
| stated the named recipient on each piece of | | | | (Cost: $18,750,000) |
| mailed collateral was already guaranteed to | | | | FTC fining institution for deceptive business |
| receive the $250,000 line of credit based on their | | | | practices? |
| prior credit activity. So, the financial institution's | | | | (Cost: $250,000) |
| exposure was $1,035,000 in wasted marketing | | | | Court Fees? |
| funds for mailing to the wrong individuals-right? No | | | | (Cost: $200,000) |
| exactly. | | | | Confidentiality of multi-year corporate marketing |
| THE DOMINO EFFECT | | | | strategy compromised? |
| "Injured" mail recipients (those no longer meeting | | | | (Cost: $70,000,000) |
| the qualifications) file a class-action suit against the | | | | Medical premiums rising as a result of an increase |
| institution citing discriminatory and unfair business | | | | in claim activity, which the institution promptly |
| practices. | | | | passes along to its employees? |
| Investigations started by FTC, FDIC Bank | | | | (Cost: Additional $178 per month increase in |
| Examiners and the USPS mail fraud department. | | | | employee paid healthcare premium) |
| DM agency was saddled with the blame for using | | | | Institution contracting with an out-source HR |
| dirty data prompting the relation between the | | | | service company to manage influx of new job |
| financial institution and the agency to be | | | | postings as a result of the employee exodus |
| terminated. | | | | stemming from initial employee firings and |
| A contractual breech occurs in the employment | | | | dramatic rise in medical premiums? |
| contract between the institution and its CMO as a | | | | (Cost: $200,000) |
| result of all the bad press surrounding this matter. | | | | Institution securing the services of an executive |
| The senior executive immediately seized the | | | | recruiting firm to conduct a global search for a |
| moment to extricate herself from the relationship | | | | new CMO, new board directors and other key |
| and promptly joins a competitor, taking with her | | | | executives? |
| all the "first-hand knowledge" of the financial | | | | (Cost: $1,120,000) |
| institution's business strategies she had amassed | | | | Increasing advertising expenditures to stabilize |
| during her 5 year tenure. | | | | brand equity? |
| Several of the terminated marketing department | | | | (Cost: $75,000,000) |
| employees file a multi-million dollar suit against the | | | | Institution hiring off-shore call-center to handle |
| financial institution, citing discriminatory | | | | dramatic increase in customer service calls? |
| employment practices. | | | | (Cost: $2,000,000) |
| Individuals in the marketing department, not fired | | | | Re-training of recently hired off-shore Customer |
| from their jobs as a result of the direct mail | | | | Service call-center's employees to speak |
| debacle, and being fearful for their jobs, begin to | | | | understandable English? |
| suffer post-traumatic-stress-syndrome and seek | | | | (Cost: $3,000,000) |
| counseling or take extended leaves of absence. In | | | | Repairing branch vandalism? |
| effect: a paralysis occurs in the marketing | | | | (Cost: $985,000) |
| department as a result of the anemic leadership | | | | Postponing "indefinitely" Multi-billion dollar merger?" |
| direction trickling down from the executive suite | | | | (Cost: $12,000,000,000) |
| after the departure of the CMO. | | | | Institution securing a law firm specializing in |
| Employees file worker's compensation claims or | | | | Chapter 7, 11 and 13 filings? |
| disability insurance as a result of headaches and | | | | (Cost: $ 4,560,000 paid in advance) |
| neck problems brought on by excessive job | | | | From this embellished scenario, one can certainly |
| stress and mental anguish directly related to an | | | | appreciate the potential negative ramifications of |
| increase in customer service issues stemming | | | | using dirty data as. The point being made is; |
| from the offer. | | | | preemptively invest in your company's future |
| Customer Service quality levels plummet as a | | | | success rather than attempting to rescue your |
| result of reductions in staff. | | | | business later. |
| The financial institution's HR department becomes | | | | The average US company has anywhere |
| over-whelmed by employee attrition as a result | | | | between 25 and 40 percent bad data. Not only is |
| of employees pursuing alternative employment. | | | | this worthless data, it's a dangerous data liability |
| Stockholders demand immediate action to resolve | | | | as well. However, this risk exposure can be easily |
| the multiplying issues and restore stock value and | | | | averted for a fraction of the costs of just the |
| brand equity. | | | | original printing costs referenced in this document |
| High profile "captains of industry" who sit on the | | | | by leveraging the power of a robust integrated |
| institution's board, seeking to distance themselves | | | | data management software solution. Investing in |
| and their companies from the troubled financial | | | | high quality data standardization and business |
| institution, resign their board of director posts. | | | | intelligence analytics software will help mitigate a |
| Merger discussions with a multinational financial | | | | business falling prey to a dirty data disaster. |
| institution are put on "temporary hold" citing a | | | | It's difficult to put a value on investing in highly |
| need for reevaluation. | | | | scalable data management software because, |
| Financial institution's property becomes a focus for | | | | with the right software you may never know |
| vandalism by disgruntled employees and irate | | | | exactly what it made for you, much less, saved |
| citizens. | | | | you. |
| The media promptly begins to follow the | | | | Having a whistle clean data base? |