First Class Mailers: Get With The Program
By Robert B. Swick,

Vice President Data Services, Anchor Computer, Inc.

Here’s an unusual situation: The US Postal Service wearing the "white hat" and First Class Mailers (some) wearing the "black hat"?! The situation refers to United States Postal Service’s Move Update regulation, which requires first class mailers to conduct name and address hygiene on their files at least once within 180 days before mailing.

Like petulant children not wanting to take their much-needed medicine, a number of first class mailers are grousing over the dollop of good medicine the Postal Service is demanding be taken. Why are we being required to clean up our first class files anyway? Because scruffy files are resulting in too much mail being returned. "Too much" in this case means about 5 billion pieces, which translates to $1,500,000,000 of potentially avoidable labor expense to the United States Postal Service. The sad fact is first class mail accounts for 51% of all "undeliverable as addressed" (UAA) mail. And no, it is not grandma making address errors; 90+% of first class undeliverable mail is business mail.

O.K., we need to acknowledge our accountability but what’s the incentive to update our files besides keeping our postage discounts? Actually, there are two important incentives: (1) timely delivery of our mail (i.e. invoices) and (2) avoiding increased postage rates caused by our undeliverable mail costs. So, doing our part will improve the timeliness of our mail and start shrinking the 5 billion returns we cause. Win; win situation, as they say.

Here’s a quick exercise to ponder. Assume you mail 100,000 customer statements monthly and your file has a 5% delivery error factor (normal). That means 5,000 statements are returned and need to be reprocessed. Have your accountant calculate the added data entry, mail process, materials and postage costs to re-mail these statements and the interest lost on the delayed receipts; then compare to the cost for FASTforward^® or NCOA.

All this makes sense, so what’s the beef? Well, a number of mailers have expressed a couple of concerns:

Concern number 1:

Some colleagues think passing files through NCOA or FASTforward^® is a complete remedy. Not so. Yes, they do provide current address change information and standardize every input record to United States Postal Service specifications, (which results in greater postal discounts and faster delivery). However, no address change service is completely correct. We are a mobile society and last year some 40 million people moved! This dynamic makes address correction a challenging task. NCOA and FASTforward^® provide a base point for file correction but additional work is needed to update customer files. For example, list owners have to compare the move-effective date provided by these services to other address change input such as customer-supplied information. This is especially true when using 3-year address change history contained in the full NCOA process.

Concern number 2:

Lack of computer and programming availability to update change of address information. This is a somewhat spurious argument since these same resources are presently used to process changes captured from undeliverable mail returned by the United States Postal Service. Often times it takes cost-savings analysis to break this mode of thought. Here’s a live result of such analysis.

A relatively small mailer, who endorsed envelopes for address change, data entered returns and re-mailed corrections, decided to try the NCOA service. Over a one-year period they processed 1 million records through NCOA. The results were impressive: Combined savings of $4,000 per month in processing costs and postage reductions due to address standardization; $48,000 in annual savings net to bottom line.

A perspective! Imagine our reduced gastritis and stress headaches (not to mention operating expense) if we first class mailers would look at the cost savings and cash flow benefits to be gained by complying with the Move Update regulation. Let’s get with the program. It is in our best interests.

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