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By Ken Brashears



re you struggling to keep printing postage and service costs down? One culprit that could be putting a drain on your profit is return mail. You’d be surprised how undeliverable-as-addressed mail (UAA) can operate like a small tax on your business — costing a little bit in a lot of areas: increased postage and paper usage, as well as duplicated work, poor cash flow, loss of customers. The best way to combat UAA mail is to recognize the root causes of the problem, and put into place a rigorous address quality program.

How Bad Data Rears its Ugly Head Roughly 25% of a database deteriorates after one year, and as much as 50% after two years, according to MarketingSherpa. The reason? Data degrades over time as individuals move, get married, get divorced, buy new homes, change jobs, retire, or die. According to USPS, an estimated 40 million people move each year. Some file a change-of-address notice with the USPS, while many others do not. And this is where businesses start running into issues with UAA mail. If customer addresses aren’t updated with the most recent move information, your business mailing goes nowhere. In addition to data that is out of date, there’s data that is just plain bad — typos in street addresses; addresses without apartment numbers or incomplete ZIP Codes; duplicate records; mismatched or incorrectly 24

MAY-JUNE 2015 | www.MailingSystemsTechnology.com

fielded information and more. Collectively, stale data and bad contact data cascade quickly to create a negative impact on business mailing efforts.

A Hard Look at the Costs of Bad Data The U.S. Postal Service processed more than 158 billion mail pieces in 2013, according to a recent Office of Inspector General (OIG) audit report on UAA mail. Of those, nearly 6.8 billion pieces (4.3%) were identified as UAA mail. USPS estimated $1.5 billion in UAA processing costs in 2013 alone, the report states. Returned mail or UAA mail has tormented mailers for years. According to DM News, UAA mail costs direct mailers over $6 billion per year. If left unchecked, can you imagine how much UAA mail will cost your mail operations? Answering that question goes beyond the hard costs of printing and mailing, and includes the long-term cost of missed business opportunities through poor customer communications. The damage can first be measured by analyzing the direct costs of wasted mail. According to the 2013 OIG audit report, UAA First-Class mail was 2.4 billion pieces (about 3.7% of total First-Class mail volume.) So, a First-Class mail piece (one ounce letter) costs $0.38 at the 5-digit presort rate category. If a mail campaign includes 250,000 pieces and 9,250 are UAA (250K x .037) — your mail operations wasted $3,515 in postage alone.

Add to that the costs to create and print the mail piece. For instance, assume a cost of $1.10 to design and print a letter and 9,250 pieces never get to the right people — that’s an additional loss of $10,175 in marketing costs above and beyond the wasted postage, for a total loss of about $13,690. UAA mail, as a result, creates the inevitable domino effect of lost opportunities, lost customers, fraud, poor cash flow, unnecessary costs, and damage to brand reputation. What’s needed is some quality control — that is, contact data quality control. This is a set of formal, automated, and continuous processes to profile, clean, enrich and update bad data, in turn preventing or avoiding the recurrence of returned or UAA mail.

Step 1: Profile and Analyze the Quality of Your Database The first step to quality control is to profile and analyze the health of your contact data. Identifying any data quality issues at the start helps determine weaknesses in your database. Once bad data is detected, data quality tools can suppress those database records and exclude them for mailing until bad address elements are evaluated and repaired.

Step 2: Clean Dirty Data The next step to maintaining good data quality and preventing UAA mail is to eliminate or clean bad data. Use a CASS Certified address verification solution to validate, correct, and standardize address data to qualify mailings for postal discounts.

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Mailing Systems Technology May/June 2015  

Mailing Systems Technology May/June 2015

Mailing Systems Technology May/June 2015  

Mailing Systems Technology May/June 2015