A year ago, the U.S. Postal Service instituted Classification Reform: Move Update — a directive mandating First-Class mailers to perform name and address hygiene on their customer files. So, how effective has the regulation been? Is First-Class mail more deliverable now compared to a year ago? You're not really expecting a simple answer, are you?
The postal service continues to earn its money for processing our growing mail volumes. Overall, mail volume has increased to 123.8 billion pieces vs. 120.1 billion pieces last year. First-Class mail has increased similarly, 63.3 billion vs. 62.8 billion.
Concern for accurate delivery by mailers in general is clearly reflected with increased use of the USPS' Address Change Service (ACS) and National Change of Address (NCOA) service. NCOA use has skyrocketed: up 45 percent over last year. Adding the first-year volume of FastForward — the USPS' newest name/address hygiene service — the two premail address hygiene services have a combined 50 percent increase over last year's NCOA activity. ACS use has grown as well, by 13 percent over last year, with 93 percent of that increase attributed to First-Class mailers.
But does this say Move Update is working? To paraphrase a familiar commercial: “Not exactly.” Here's where it gets confusing. While the above measurements show a greater degree of interest by mailers to improve the delivery of their mail, the following data presents a contradiction.
A primary reason for instituting Move Update was to reduce the volume and tremendous cost of Undelivered As Addressed (UAA) mail. ($1.5 billion to process 5 billion pieces.) The postal service's rationale being that consistently cleansed files will result in more deliverable mail and, therefore, reduce the undeliverable problem.
Herein lies the dilemma: On the one hand, use of the postal service's NCOA and FastForward premail hygiene services has increased markedly. On the other hand, there has been zero reduction in UAA mail. The contradiction rests in the increased use of premail hygiene services to total mail. That is, a greater percent of mailing records have gone through the update process, but the undeliverable mail has not yet reflected these efforts with a corresponding reduction in volume. Is this merely a temporary anomaly or an indicator of something else? Stay tuned.
Views from the field: Of all First-Class mailers, the financial industry segment has been among the most affected by the Move Update regulation. Banks and security firms have experienced significant difficulty and cost to be in compliance (and retain their postal discounts). Specifically, many institutions have incorporated a customer inquiry and response procedures (i.e. mail out/mail back) to verify move information received from the NCOA process.
These institutions have taken serious measures to make their customer files more accurate. However, the results have been murky. NationsBank, for example, was among the first to abide by the regulation using envelope endorsements. Peter Glenn, vice president at NationsBank, is surprised and disappointed to find that the bank's volume of return mail has not decreased after three complete cycles of this hygiene process. (Recognizing the delay factor of letter endorsements, I understand a study is under way to analyze other hygiene services.) Other financial institutions are experiencing similar anomalies, such as lowered NCOA match rates but no appreciable reductions in returned mail.
“Conceptually we're in agreement with the postal service. [Cleaning up our files] is the right thing to do, but we need to understand why the corresponding decrease in postal costs and returned mail hasn't happened,” said Chuck Frattore, vice president of distribution, transportation and logistics at First Chicago NBD.
So, what's the verdict? Reduction of UAA mail was the postal service's rationale for implementing Move Update and the basis by which success would be measured. Well, using this criterion, the first year of Move Update has been woefully short of its goal. On the other hand, increased use of USPS name and address hygiene services — endorsements, ACS, NCOA and FastForward — are positive identifiers of raised consciousness by mailers. First-Class mailers are beginning to think that more frequent use of these hygiene tools, i.e. quarterly runs, may be necessary to reduce their returned mail problem.
A final note on consciousness: Are all First-Class mailers analyzing their NCOA NIXIES and are all premail corrections actually being applied?
Robert Swick is vice president of data services for Anchor Computer Inc., Deerfield Beach, FL.
