Move Update: You May Save Money if You Clean Up Files

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Here's an unusual situation: the U.S. Postal Service wearing the "white hat" and some First-Class mailers wearing the "black hat." The situation refers to USPS' Move Update regulation, which requires First-Class mailers to conduct name and address hygiene on their files at least once within 180 days before mailing.


A number of mailers are grousing over the dollop of good medicine the postal service is demanding be taken. But scruffy files are resulting in about 5 billion pieces of mail being returned, which translates to $1.5 billion of potentially avoidable labor expense to USPS.


The sad fact is that First-Class mail accounts for 51 percent of all "undeliverable as addressed" mail, and 90 percent of this is business mail.


Besides keeping postage discounts, there are two important incentives to update files: timely delivery of our mail (i.e. invoices); and avoiding increased postage rates caused by our undeliverable mail costs.


So, doing our part will improve the timeliness of our mail and start shrinking the 5 billion returns we cause.


Consider this: Assume you mail 100,000 customer statements monthly and your file has a 5 percent delivery error factor, which is normal. That means 5,000 statements are returned and need to be reprocessed. Calculate the added data-entry, mail-process, materials and postage costs to remail these statements and the interest lost on the delayed receipts. Then compare that to the cost for FastForward or NCOA.


All this makes sense, but a number have expressed a couple of concerns:


Concern No. 1: Some colleagues think passing files through NCOA or FastForward is a complete remedy.


Yes, they do provide current address change information and standardize every input record to USPS specifications, which results in greater postal discounts and faster delivery.


But no address-change service is completely correct. We are a mobile society, and last year 40 million people moved. This dynamic makes address correction a challenging task. NCOA and FastForward provide a base point for file correction, but additional work is needed to update customer files.


For example, list owners have to compare the move-effective date provided by these services to other address-change input such as customer-supplied information. This is especially true when using three-year address-change history contained in the full NCOA process.


Concern No. 2: There is a lack of computer and programming availability to update change-of-address information.


This is a somewhat spurious argument, as these same resources are used to process changes captured from undeliverable mail returned by the postal service.


Often, it takes cost-savings analysis to break this mode of thought: A relatively small mailer, who endorsed envelopes for address change, data entered returns and remailed corrections, decided to try the NCOA service. Over a year, the mailer processed 1 million records through NCOA.


The results were impressive: combined savings of $4,000 per month in processing costs and postage reductions because of address standardization; and $48,000 in annual savings.


Imagine the reduced gastritis and stress headaches -- not to mention operating expense -- if First-Class mailers would look at the cost savings and cash-flow benefits from the Move Update regulation.


Let's get with the program. It's in our best interests.


Robert B. Swick is vice president of data services for Anchor Computer Inc., Deerfield Beach, FL.
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