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Mailers Set for NCOALink Era

Mailers, vendors and the U.S. Postal Service are on track to start using NCOALink on Oct. 1.

NCOALink is a data set of address changes from the USPS. It lets companies update name and address mailing lists with new addresses from individuals, families and businesses that moved so mailers can qualify for First-Class automation and presort discounts.

NCOALink replaces the National Change of Address and FASTforward products with one system that lets the USPS release address information in a secure format. This format is a mathematical, 11-digit representation of the new address.

The USPS says the system will reduce postal oversight and improve undeliverable-as-addressed mail. NCOA licensees processed 244.6 billion address records last year.

The postal service discontinues support for the 18-year-old NCOA service Sept. 30. FASTforward Mailing List Correction ends Sept. 30, 2005, while FASTforward Multiline Optical Character Reader is replaced Sept. 30, 2006.

However, mailers should expect few changes when they begin using NCOALink.

“For our client base, it should be entirely transparent,” said Lance Williams, executive vice president at Merkle Direct Marketing Inc., Lanham, MD, which has run NCOA for more than 350 clients.

There will be small changes. For customers who use “Nixies,” or addresses that were not properly matched with the postal database and have not been standardized on their NCOA output files, the USPS changed the name to “Return Codes” and changed the coding classifications in NCOALink.

“Generally, a very small percent of names are affected by this,” Williams said.

The USPS has licensed the product in three categories: full-service providers, limited-service providers and end-user mailers.

· Full-service providers use NCOALink to update mailing lists, most of which are owned by unrelated third parties. The USPS will provide FSPs with a 48-month NCOALink data set updated weekly, covering 160 million addresses. FSPs pay a $175,000 base annual license fee to the USPS.

As of Sept. 24, the USPS reportedly granted FSP licenses to at least 14 companies, all of which had offered NCOA before the change: Acxiom Corp., Anchor Computer, Consumer Direct Inc., Creative Automation, Donnelley Marketing, Equifax, Experian Marketing Services, Fair Isaac Corp., Globe Life and Accident Insurance Co., Harte-Hanks Data Service, KnowledgeBase Marketing, MBS Insight Inc., Merkle Direct Marketing and Time Customer Service.

· Limited-service providers use NCOALink to update their own mailing lists or those owned by third parties. The USPS provides an 18-month data set updated weekly, covering 60 million addresses. LSPs pay a $15,000 base annual license fee. The USPS so far has granted these licenses to: BCC Software Inc., Campaign Mail & Data Inc., Firstlogic Inc., Group 1 Software, I-Centrix, Satori Software Inc., Select Systems Inc., Transunion and Worldata Infocenter. Many of these vendors offer FastForward MLC, which gives 13 months of data.

· End-user mailers use the product to update lists for their own mailings. They may not update lists for third parties. The USPS provides an 18-month data set updated monthly, covering 60 million addresses. They pay a $7,500 base annual license fee. The USPS has granted one such license, to the Automobile Club Association of Southern California.

Software developers and distributors also have been authorized to offer NCOALink software solutions to providers.

Though most current NCOA vendors say NCOALink is important in trying to reduce undeliverable mail, concern exists that the field will have more competition. Indeed, more FSPs, LSPs and end-user mailers are seeking certification.

“We've got several companies in the process of being certified at all three provider levels,” said Jan Caldwell, USPS manager of address management.

One large mailer who requested anonymity plans to use the same vendor for NCOALink but may become an end-user mailer “if the price is right.” Paying for software from a vendor as well as for a license from the USPS may not be worth it, the mailer said. And with more competition, “the NCOALink full-service providers may start lowering their prices.”

Williams said he was wasn't too concerned.

“Do I wish they hadn't made the NCOA product more available to a broader part of the market? Sure,” he said. “At the same time, our possession of NCOA capability is no longer a primary competitive advantage of what we do. It is still a valuable service, but it is not the primary reason that people do business with us versus someone else.”

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