There's no greater opportunity facing First-Class, high-volume mailers today than achieving full compliance with the U.S. Postal Service's Move Update initiative.
Unfortunately, many are paying little attention to Move Update and, in the process, are ignoring the substantial benefits of compliance. Why? Because they mistakenly view the entire effort — especially the news that the USPS is dispatching teams to conduct compliance reviews — in the wrong light.
These mailers see only the problem of compliance instead of the opportunities that compliance offers to improve the fundamental operations of their organizations. Compliance isn't a burden to be avoided but a solution to be embraced. Some high-volume mailers will no doubt dread the arrival of a compliance review team on their doorstep. But the forward-looking mailers will see the team as an opportunity to review the effectiveness of their existing compliance method and learn how other methods can eliminate work, reduce costs, boost customer relations and speed delivery of the mail.
The best compliance method for most high-volume mailers is a zero defect approach that assures preparation and delivery of mail with the correct address the first time. Roughly 18 months ago, the USPS announced the Move Update requirement, which is one of the most aggressive steps it has ever taken to help control costs and improve the quality of mail delivery. The initiative requires that addresses used on presorted or automated rate First-Class mail be updated within the six months preceding the date of mailing using a USPS-approved address Move Update method. Organizations that don't conform to the regulation can't receive postal discounts.
The reasoning behind the new rule was simple. Americans have a habit of moving and the postal service wanted to eliminate the redundant work processes and unnecessary costs involved in forwarding mail to new addresses. After all, the USPS — like its customers — wants fast, assured delivery of the mail.
The average American family moves once every five years. So 17 percent of Americans move every year — that's about 1.5 percent of the entire population every month. The cost to the USPS to forward a piece of mail to a new address is roughly 25 cents each, or a total of $1 billion a year. If the addresses were updated and correct before the mailing, the USPS wouldn't incur the costs of forwarding and the mail would reach the intended recipients sooner.
The postal service even permitted high-volume mailers a choice of four USPS-approved methods of compliance. But there's been little progress over the past year and a half in reducing the volume of mail that needs forwarding. And it is concluding that many high-volume mailers aren't complying with the rules and are now unfairly claiming presort discounts.
Cost of noncompliance is huge. But more importantly, mailers who aren't complying with Move Update have failed to consider what the cost of noncompliance is to their organizations. And the cost of dealing with returned mail — or what I like to call the disruption to existing work processes — can be enormous.
One financial investment firm recently conducted an in-depth examination
of the total work involved in receiving and sorting returned mail, manually updating customer address information, re-creating and reprocessing individual mail pieces and remailing with the correct address. It discovered the total cost to be in excess of $3 million a year. And that doesn't include the cost of any tangible or intangible impacts the delay in delivery caused to customer relations.
Given that Americans like to move, and are unlikely to change that habit anytime soon, high-volume mailers should look for ways to eliminate the costs associated with poor address quality.
A business issue, not just a mailing issue. The entire Move Update initiative is really an opportunity for high-volume mailers to eliminate unnecessary costs and redundant work procedures and speed delivery of their key messages to their most important trading partner: their customers.
After all, isn't the fundamental reason businesses are in business in the first place to sell products and services and to receive payment for the products sold and the services rendered? While there are four USPS-approved methods to comply with Move Update, a great many mailers initially chose to print an endorsement on the envelope. The option was the easiest to implement, least expensive on the surface and shifted much of the work burden to the USPS. Or so they thought.
The results? Mailers have increased the amount of mail they must reprocess, boosted their postage expenses, and delayed the delivery of the mail that requires reworking. Hardly a cost-effective or efficient solution.
The best method — like a zero defects production environment — is to eliminate errors before they occur, which also eliminates the need to take corrective action.
The USPS-approved method that most resembles a zero defect approach is called FastForward for Mailing List Correction. This system relies on USPS change of address data from the latest six months, can reside at the mailer's site and allows mailers to electronically interrogate and automatically update their customer address list before a mailing goes out. The result? No disruption to the business, no delay in processing and the mailing is as up-to-date practical.
Collectively, everyone benefits from a postal service that is more efficient and more cost effective. That's the broad goal of the USPS Move Update, which is being enforced with the launch of the Move Update compliance teams.
But individually, we benefit when we act in our self-interest. As mailers and as businesses, we benefit when we eliminate unnecessary costs and procedures from our own work processes and take steps to assure that our messages are reaching our customers as quickly and as professionally as intended. And that's the goal that every high-volume mailer should strive for.
Paul D. Greene is executive director of industry relations at Pitney Bowes Software Systems.