The U.S. Postal Service recently announced an aggressive approach to reducing undeliverable-as-addressed mail by limiting postal automation discounts to only those mail pieces that have a confirmed primary address. This supports Postmaster General John Potter’s challenge to reduce UAA mail 50 percent by 2010. The changes are part of CASS cycle L, which takes effect Aug. 1, 2007. Like many changes in this industry, the details of how this affects mailers are not always readily visible.
The dollar effects of UAA mail for the USPS and the industry as a whole can be counted in the billions. In 2004, the USPS spent $1.8 billion to handle the 10 billion pieces of UAA mail. The cost to the industry is likely twice that amount, considering the lost marketing opportunity, customer response and general waste. One could argue that the true definition of “junk mail” is UAA mail, as the “junk” is where these pieces end up, depending on their class-specific disposition.
To get tough on UAA mail, the USPS is making part of the Delivery Point Validation technology required as part of all CASS Certified software solutions. Today, mailers assign a ZIP+4 code to addresses that may be deliverable within a known address range. For example, 123 Elm St. may exist because Elm Street runs from 100 to 200 and thus a ZIP+4 code could be applied. But according to DPV data, 123 Elm St. is an empty lot and thus a non-confirmed delivery point. Beginning Aug. 1, 2007, the CASS Certified software will not return a ZIP+4 code if the address is not a confirmed delivery point, even if it had a pre-existing ZIP+4 code.
Certainly this aggressive approach to UAA will affect mailings. The USPS reported at the Mailers Technical Advisory Committee meetings in May that the “worst case will probably be around 2 percent” of the addresses from a mailing list that could lose their automation discount. Of course, this may not apply to every mailing list, nor is this the only cost the industry should consider.
Important factors need to be considered relating to the CASS cycle L requirement of primary address confirmation. The first is that given the nature of how DPV data are used, the entire industry will have to obtain their postal directories on a monthly basis as opposed to bimonthly today. Literally thousands of mailers receive their directories bimonthly. This is a 100 percent increase in fulfillment costs to software vendors and likely would affect mailers’ IT departments.
The other concern related to fulfillment is media. DPV data are large enough to require their own CD-ROM. Thus, many mailers would get two CD-ROMs each month to load onto their systems. This is another cost to the industry and likely will cause vendors and mailers to switch to electronic fulfillment as opposed to CD-ROM delivery.
Also, two operational issues relate to this next CASS cycle. The first is performance. Depending on the platform and the manner in which the software vendor has implemented the DPV data, some mailers may see a performance degradation of 20 percent or more. Of course, there are mailers who already have implemented DPV and are seeing a negligible impact. As with the 2 percent assignment issue, mileage will vary.
Second, the DPV data contain “false positive” seeded addresses. The data are effectively every deliverable address in the United States. Of course, the data are highly encrypted, first because the USPS must adhere to Title 39 privacy laws and, second, because the USPS does not want mailers to create a mailing list from it. To ensure this, the USPS has inserted certain addresses within the DPV data that should never appear in a typical mailing list. This is a way to detect whether a mailer has done reverse engineering of the encrypted data in order to generate a mailing list. If the software encounters one of these “false positive” addresses while processing a list, the software is required to stop processing the DPV option and forces the user to obtain an unlock code from the certified software vendor to continue processing. This may be a serious concern for mailers who rely on unattended batch processes for cleansing their mailing lists.
There are just 13 months before this new approach to reducing UAA mail takes effect. What can mailers do now to prepare?
• Notify the IT department of these changes. Some software vendors already have implemented electronic data fulfillment for their customers to download the postal directories for their CASS Certified solutions. This could be a cost-effective alternative to receiving physical media like CD-ROMs.
• Learn your CASS Certified software vendor’s process for handling a false-positive lockup. Some vendors have implemented an automated system to receive an unlock code should you encounter this. It is highly unlikely that you ever will encounter one of these, but you need to be prepared.
• Understand the licensing rules for use of the DPV data. For example, the USPS does not permit the data to leave the boundaries of the United States. (Click on Licensing rules for use of the DPV data to read it.)
• Find out how bad your address list is now and take steps to correct the UAA. If you don’t already use DPV data, send your list to an NCOALink provider. Full service providers can give your address list a thorough analysis and have access to the latest USPS tools. For those most stubborn addresses, send them to the USPS for processing through its AEC II service. This leverages Delivery Force Knowledge and is a great “last resort” approach to UAA.
• Revisit your approach to address quality. Strive to keep your addresses complete, correct and current by using best practices in address quality. MTAC recently completed a document containing 27 best practices in address quality methodologies. Click on MTAC to access it.