UAA Mail Costing DMers Over $6 Billion

Ever wonder why someone you know, who hasn’t got as much going for himself as you do, is doing so much better? Of course you do. That thought has come to mind to all of us, perhaps more times than we care to admit. Do we just chalk it up to good luck for someone else, swallow our envy and go on with life? Or, have we ever reflected on why another is rewarded with good luck and we’re not?

Luck comes in many stripes, and personal benefit can come from such self-reflection if one acts on that which can be changed or improved. This is where the luck factor comes into play: situations that can affect us based on our action or inaction.

Let’s clear the air before going further in the theoretical mode. Discussion of luck doesn’t suggest that one run out and buy 10 times the normal quantity of lottery tickets or take out a second mortgage and head for the nearest roulette wheel. Talking about luck in our business environment is meant to stimulate us to be alert to opportunities to create our own luck.

One case in point is the much-ballyhooed expansion of the U.S. Postal Service’s Move Update regulation. Rather than playing ostrich whenever the topic arises or countering it with a negative, imagine what might happen if you seize upon this for the opportunity it is.

The USPS plans to expand Move Update to include all mail classes and on a more frequent basis. Those who act on this knowledge will grasp control of the luck factor, whereas those who do nothing will struggle to adjust and put their customer base at risk. Knowledge is power, and those who use the knowledge make their own luck!

Irony of ironies: The postal service has been the lead communicator on the undeliverable-as-addressed matter. The industry, except for individual proclamations, has been far less outspoken. This mystifies me because while the UAA cost is estimated to be an extraordinary $2 billion to the USPS, it’s at least three times that to mailers!

Further, the mix of mail has flipped, with Standard mail holding the dominant position in carriers’ mailbags. UAA costs have not abated even though NCOA use has grown yearly and First-Class mail has dropped in volume. What does that suggest in terms of deliverability of Standard mail?

It shows that First-Class mailers have shifted from the old, tired strategy, “Get mail into the mail stream,” to “Get mail into mailboxes!” The deliverability issue also screams of opportunity to help Standard mailers improve performance. To quote a departed senator, “We’re talking real money here.”

Imagine the potential you can bring to your next mail campaign. Assume a 25,000-piece campaign with a conservative in-mail cost of 35 cents per piece (postage, material and labor). That requires a budget of $8,750. Now assume an equally conservative 4 percent UAA factor. Those two assumptions translate to front-end waste of $350 plus the sales lost on non-delivery to that 4 percent (1,000 recipients).

If those records were made deliverable and the usual 2 percent response factor applied, 20 orders would be the sales upside. With a $50 value per order, that’s $1,000 lost revenue on the back end added to the $350 wasted on the front end. This simple, realistic example probably will not be realized and thus will be repeated time and again. Why? The waste and lost revenue aren’t seen because the undeliverable mail is trashed. It doesn’t get returned to haunt and prod one to take corrective action on the file corruption.

Continuing the irony, our industry associations and organizations have as their common bond the quality of direct mail. Undeliverable mail is an affront – some might say a slap in the face – to this benchmark. We don’t need the postal service to continue to tell us (mailers and mail service providers) again to clean up our act as it did when Move Update was introduced eight years ago.

As responsible practitioners, we should be applying mail delivery improvement procedures routinely. It begins with adjusting our objective to getting mail into mailboxes, not simply into the mail stream. Put luck to work for you. After all, knowledge is power only when it’s acted on.

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