Consider the Source in Address Update

Americans are a brand-conscious people. Like most assertions, this can be viewed in a positive and negative way.

To acquire a product or service based on the quality reputation of its name is a good practice. Wearing labels simply for namesake recognition raises questions of a person's self-assurance and values. Being brand conscious means we qualify sources (I drive brand X because of the impression it makes, i.e., luxury, sporty, thrifty, etc.). However, often our practical side dominates the decision-making process, which leads to selection of reasonable-quality but less-costly alternatives.

How this relates to the U.S. Postal Service requires a bit of imagination. Is it analogous to compare a single General Motors automotive frame used for certain Buick, Chevrolet and Cadillac models to a single USPS source document used for the postal service's Address Change Service, FASTforward, National Change of Address and Return Mail Endorsements (yellow stickers)? Absolutely.

Brand consciousness is often included in the purchase decision of one model versus another, even if all vehicles use some of the same elements. Similarly, mailers choose one database update method over others based on personal preference, right? Well, that is not always the case. One option may be used for policy reasons, or simplicity, or a combination of reasons. However, before the analogy is stretched further, let's give more clarity to these address change options.

The process begins when movers go to their local post office and submit the USPS Change of Address Form PS 3575.

“All data housed in National Change of Address [NCOA], FASTforward, Address Change Service, and Return Mail Endorsements [yellow stickers] originates from the Computer Forwarding System [CFS] database,” said Jim Wilson, an address specialist at the USPS' Address Management and National Customer Support Center in Memphis, TN.

Old and new address information along with the name of filer are compiled daily and incorporated into a master Change of Address file weekly. This same data from CFS is then shared by all three postal venues that handle address changes, ACS, Endorsements and NCOA/FASTforward.

“Although the source is identical, NCOA provides a more complete record of movement than FASTforward, Endorsements or ACS,” Wilson said. “Because the NCOA database holds a history of moves for the past three-plus years, multiple moves by the same customer are 'chained' in NCOA where they are not in the other address change options. For example, if I move from San Francisco to Memphis, and then move from Memphis to Chicago, NCOA will change my San Francisco address to Chicago but updates coming through the other services will only capture the San Francisco to Memphis move. The bottom line is that NCOA, FASTforward, ACS and yellow sticker Endorsements should, for the most part, be equal and accurate sources for change-of-address updates.”

However, it is important to understand that the different programs use this same data differently. It is the differences that mailers need to understand to best select a program that meets their needs. For example, NCOA and FASTforward employ very conservative matching algorithms while ACS and Ancillary Endorsements are generated by postal carrier knowledge.

This is not new news. Why then do many legal departments only allow use of Endorsements, which is the most costly and cumbersome option, when there is no appreciable difference between the services?

In whose interest is it to mail with Endorsements when pre-mail options are readily available? Not the USPS, which bears the high-cost burden of handling the undeliverable piece, and certainly not the mailer, who is incurring an expense often far greater than the cost of pre-mail cleansing services.

Belay the thought that this just applies to big mailers. Here's a quick comparison of a 10,000-piece mailing comparing the economics of Endorsements and NCOA.

We will use a reasonable in-the-mail cost of 45 cents, which includes basic discounted First-Class postage and materials, with the assumption that 6 percent of the mail is returned by Endorsement. The 600 pieces returned are valued at $270.

Industry's minimum fee for NCOA service, which applies to a small file such as this, is about $95, about one-third of the return mail cost. Add the cost of re-mailing (another $270) and the cost differential, $445, is almost five times the minimum cost of NCOA. Further, the cost disparity between pre- and post-mail address change services increases as mail volumes increase.

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