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DQ Blog Data Quality How to Harness the Power of the Postcode

How to Harness the Power of the Postcode

Martin Doyle September 10th, 2013 Data Quality

One of the key pieces of data businesses hold about customers – and suppliers – is their postcode. In this article, we’ll look at how the Royal Mail’s Postcode Address File (PAF) system is helping businesses improve data quality, customer service and a healthy return on investment.

What is Address Management? 

Before looking at postcodes, we need to understand what address management is and why businesses care so much about it.

In short, address management is a process whereby customers’ details are reviewed and updated on an ongoing basis. This helps the company to gain the customer’s trust, and it dramatically improves brand image. After all, a customer whose address is spelled correctly is more likely to respond favourably to marketing than a customer whose details have been sloppily input or incorrectly recorded.

With address management, every section of a customer’s address is analysed using data quality applications. That includes their name and postcode.

This is where the postcode comes into play.

What is PAF? 

The Royal Mail’s PAF database is a valuable data quality tool; it’s an index of more than 29 million postcodes, together with any relevant address data. Every single address in the UK is included in the PAF.

Royal Mail has maintained the PAF database for almost three decades, and data quality tools depend on it for their address information. These data quality applications can evaluate addresses and compare them against the PAF version, automatically correcting individual addresses, validating entry of addresses or scanning entire databases for incorrect information.

PAF scans postcodes to determine area, district, sector and street. On average, every postcode covers 15 properties. The property number is typically the last piece in the puzzle, but some organisations and businesses are assigned their own unique postcode instead of having to share.

PAF benefits business and customers in a number of ways:

  • Customers experience better service when they contact a company; their details are easier to locate using the postcode.
  • Marketing material is distributed more efficiently to customers, improving return on investment, since the chance of successful delivery is higher.
  • Customers are not frustrated and inconvenienced by duplicate mailings or incorrectly addressed material. Duplicates are easy to find.
  • Customers are retained for longer, since they trust the business to keep accurate records about them.
  • Businesses can access accurate demographic data about customers based on their postcode, making market research more effective.

PAF is also dynamically updated. If new houses are built, or addresses are reclassified, postcodes can change. The Royal Mail also sometimes runs out of postcodes for an area and is forced to issue new ones. Using PAF is a good way to ensure these changes are picked up automatically.

How to Use PAF In Your Business

To benefit from the huge advantage of the Royal Mail PAF system, choose a data quality tool that draws on its database and picks up dynamic updates from Royal Mail. When it comes to data quality, the postcode – and the PAF system – are two of the most powerful tools at your disposal.


Written by Martin Doyle

Martin is CEO and founder of DQ Global, a Data Quality Software company based in the UK. With an engineering background, Martin previously ran a CRM Software business. He has gained a wealth of knowledge and experience over the years and has established himself as a Data Quality Improvement Evangelist and an industry expert.