Reducing Undeliverable Mail Is Key to Controlling CostsCHICAGO -- Improving address assignments and reducing undeliverable-as-addressed mail are crucial for direct marketers, database-track attendees at the Chicago Association of Direct Marketing's 49th annual show were told yesterday.
One-third of all mailing addresses are incorrect or incomplete, said Steve Varsolona, information quality market manager at Firstlogic, citing a U.S. Postal Service study.
"This costs the post office a lot of money, which in turn costs us a lot of money because they pass on the costs [to marketers]," he said.
According to the USPS study, 25 percent of incorrect addresses have missing or wrong directionals or suffixes, 18 percent have the wrong street name and 12.7 percent the wrong ZIP code and city name. A further 9.1 percent have the wrong apartment number, and 26.3 percent have moved.
Undeliverable-as-addressed mail cost the USPS $1.8 billion in 2000. Total volume of such mail in that year was 5.7 billion. Comparable figures for 1998 were $1.5 billion and 5.4 billion pieces.
"It's not getting better, it's getting worse," Varsolona said.
So better address validation becomes all the more critical, he said. Standard technology allows only primary range validation. For example, 105 Main Street when compared with the USPS National Directory may run from 101 to 199. This may lead marketers to deduce that 105 must be valid as it fits within that range.
Delivery point validation, he noted, offers an extra level. It lets marketers query whether 105 Main Street really exists. Simply put, DPV lets marketers confirm whether a particular address is deliverable through the USPS. A yes or no indicator is provided that relates to the address. Second, it enables the identification of a commercial receiving agency.
Finally, delivery point validation can be used to query an address that is missing a suffix or directional to gauge the correct address. This alone can increase assignment rates 1 percent to 2 percent, Varsolona said.
How does DPV work? The USPS provides Firstlogic with four data files. The USPS encrypts these files using a proprietary format, delivering them monthly. Firstlogic tags these files and redistributes them. The final combined size, roughly 550 megabytes, is roughly the size of the USPS National Directory.
In addition, the USPS offers a proprietary development library, which the software calls for processing the address. Software vendors have no access to the technology that enables this nor can they optimize the process, Varsolona said.
So, after the address is standardized and a ZIP+4 added, it is passed on to delivery point validation. Again, it will determine whether the address is deliverable via the USPS, and whether it is a commercial mail receiving agency.
Finally, for mailers or service bureaus, DPV may be an additional chargeable service. Its scoring results will help a bureau set client expectations regarding the deliverability of a list, Varsolona said.
"As always, the bump in assignment rate means more mail qualifying for automation rates and simplified preparation," he said.