The Undeliverable Problem Persists

In 1997, the U.S. Postal Service instituted its Move Update regulation. A stipulation of the regulation requires First-Class mailers to update their files with current name and address information to qualify for postage discounts. The purpose of the regulation has been to reduce the USPS’ huge volume of “undeliverable as addressed” mail and the enormous cost burden to the USPS of $1.5 billion to process these billions of undeliverable pieces of mail.

The terrible irony is that despite high rates of compliance, the problem persists as mail volumes continue to grow. Don’t shrug and say it’s not your problem. The UAA problem is attributable to First-Class and Standard Class mailers. It is a 5 billion-plus undeliverable mail piece problem that affects every database owner, regardless of mail volume or frequency or cl irony is that expenses and lost revenues resulting from undelivered mail are not truly appreciated by most senior business managers. Certainly sales and marketing managers would listen carefully to a message that offers greater response rates to mail campaigns. Similarly, cost-conscious managers would listen with equal intensity to procedures that offer significant reductions in statement mailings, promotional mailings and other types of direct mail activities.

So what’s the problem? Like so many situations in business, the problem is easier stated than fixed. Resolution begins by capturing the attention of responsible managers. To do so effectively, solutions need to be presented in a straightforward, bottom-line manner. Here are two eye-opening examples:

• We can save $5,000 on our next mailing.

• We stand to gain $5 for every $1 invested in cleaning our mail file.

A captivating conclusion like either of the above allows the presenter to bring forth the supporting facts to managers predisposed to taking appropriate action.

The details regarding the above examples, for instance, can be presented succinctly as follows:

Save $5,000 on next mailing:

• File size @ 220,000 customer records.

• Based on historical performance we anticipate 11,000 changes (5 percent).

• Saved postage and materials valued @ 50 cents per piece corrected ($5,500).

• Cost of service of $2/M input records ($440).

• Conclusion: NCOA service expected to result in a net savings of $5,060.

• Recommendation: Conduct NCOA processing before next mailing.

Gain $5 for every $1 invested in file cleansing:

• File size @ 1 million customer records.

• Based on historical performance we anticipate 25,000 changes (2.5 percent).

• Saved postage and material valued @ 30 cents per piece corrected ($7,500).

• Cost of service of $1.25/M input records ($1,250).

• Using historical performance, net savings are projected at $6,250, a fivefold return on investment.

• Recommendation: Conduct NCOA processing before next mailing.

Another way to reduce mailing costs and improve response rates is to examine addresses in your file that fail to obtain ZIP-plus-four codes when processed through USPS-certified Coding Accuracy Support System software. Many files still have 5 percent to 10 percent of addresses lacking a ZIP-plus-four code because of errors in the address field.

This, of course, raises the question of how many of such records result in undelivered mail. There are USPS and third-party proprietary services that correct these non-ZIP-plus-four coded addresses and provide ZIP-plus-four codes. One process averages 50 percent improvement.

There is one last effect of the UAA problem to consider. About 60 percent of the estimated 5 billion-plus pieces of undeliverable mail is returned to sender. This means, for example, undeliverable Standard Class mail with ancillary endorsements or using the USPS address change service will incur a postage surcharge on top of the wasted postage and material expense.

The UAA problem begins with us, and it is in our power to end it.

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