Orphan mail

It sounds like something out of Alice in Wonderland. Merchants, so desperate for relief on the postal front, now have to stop mailing some good customers just to qualify for automation presort discounts.

That’s one way of looking at CASS Cycle L, the latest version of the U.S. Postal Service’s Coding Accuracy Support Software.

Rolled out in August, CASS Cycle L requires that mailing lists have numbered addresses to qualify for discounts. Previously, they only needed the correct block number.

And mailers must use the USPS Delivery Point Validation system, which makes sure the addresses exist. If they do, an 11-digit barcode will be applied to the pieces (in addition to the zip+4 code), and the discount will be awarded.

And if they don’t? The pieces will get a 5-digit zip barcode. And all they will be eligible for is the presort non-automation rate.

At that point, there are two choices: Suppress those addresses or mail them at a higher price.

Sources say that 1% to 3% of the pieces that used to get automation presort discounts no longer qualify. And if you mail them, you may be paying from 0.5% to 1% more.

But most experts will tell you to do it anyway. “Absolutely,” says Jeff Stangle, director of solutions development for Pitney Bowes Management Services. “The actual product will still get delivered through the mail, so there’s no reason not to mail catalogs to non-compliant addresses.”

Andrew Kapochunas, who leads Dun & Bradstreet’s customer data quality division, agrees with Stangle. Most business-to-business marketers will mail to the so-called bad addresses, he says.

If the business you are trying to reach is in an airport or does not have a street address or a building number, it would be disqualified, he adds.

Kapochunas urges clients to run a test with those DPV-suppressed addresses. While some of the addresses may be bad, others may just not fit the new set of rules.

Choose the firms that have the largest number of employees or the companies that have been in business the longest. Yes, it will cost more, but they could still produce a strong return on investment, Kapochunas says.

“The delivery person who has the route in the city or town you are mailing to may be familiar with the company you are trying to reach, and could decide to bring it to its final destination,” he explains.

Case in point: The mail carrier in Hoffman Estates, IL, probably knows that SBC is now AT&T, and that its street name has been changed from SBC Center Dr. to AT&T Center Dr., Kapochunas explains.

Stangle estimates that it will cost a little more than a nickel per book to mail to the bad addresses. And that should be a wake-up call: Running address hygiene programs against their files can save high-volume mailers millions in postage.

“[Postmaster General] Jack Potter has sent a message to mailers — he wants to cut the number of undeliverable-as-addressed pieces in half by 2010,” Stangle says. “The postal service wants to make sure mail is not only deliverable, but deliverable in as efficient a way as possible.”

How do you get your lists into shape? One way is to run them against the National Change of Address before each mailing, says Gregg Keiffer, a solutions architect at Knowledgebase Marketing. But cost can be an issue even then.

“For the mom-and-pop catalogers, it would probably cost them more to run the NCOA file with the merge/purge than to just mail the UAAs,” Keiffer says. “A lot of folks like that panic because they have a static budget that they need to stick to. But for the bigger guys with a large volume of customer records, it’s almost a no-brainer that will save them money.”

But don’t mail or remove names without doing some solid analysis.

Ask your service provider to come up with a model that can be used during merge/purge, advises Mike Yapuncich, vice president of solutions support for Experian Marketing Services. Use it to rank the names that fall below your breakeven to see whether they should be mailed or suppressed.

And run your old or inactive records through the Postal Service’s Locatable Address Conversion System (LACS), a DPV tool that helps determine if the business still exists but with a different address.

Or you can use an outside source to verify the address — a good idea especially for b-to-b mailers. “If a business moves, it’s still going to want to get its mail,” Stangle says.

Wine merchant Geerlings & Wade segments the non-compliant names by recency, frequency, and monetary value, says director of consumer marketing Jake Hall. The ones that top breakeven, including the postage penalty, continue being mailed.

“For our best customers, we will go to increasingly expensive means to correct the address, like e-mail them, then follow up with a phone call, and then maybe send a postcard,” Hall explains.

Geerlings & Wade also tests lesser segments of non-qualified addresses to track any differences in response.

“In the past, I’ve seen non-zip+4 addresses perform better than so-called ‘good’ addresses, simply because they don’t suffer the same mailbox glut as others,” Hall adds.

Yapuncich agrees with Hall. If all catalogers drop non-qualified addresses, few catalogs will reach rural areas where addresses may still include “rural route” and not even be compliant with LACS.

“If merchants all decide they aren’t going to spend extra to mail to a non-qualified address, that means a lot of households in middle America won’t be getting catalogs,” Yapuncich says. “You may get a better response if you mail to those addresses because no one else is reaching them. You may have to pay a premium to mail them, but you probably won’t have a lot of competition.”

Only 60% of the households that move fill out a change of address form with the USPS. But every mover will go to their regular mailers to make sure they will still receive “wanted” mail, Stangle says.

Thus, he recommends segmenting non-compliant addresses and running a merge/purge against magazine subscription lists, utility bills and warranty cards.

Sometimes it’s as simple as going to an online directory like whitepages.com or LinkedIn to correct respective b-to-c and b-to-b addresses. Better yet, if the phone number is included in the data, give the customer a call and ask if the address is correct.

But there’s another problem as well: Not all bad addresses are caused by a business or household move, or an address that was updated by LACS. Sometimes they are due to simple data entry errors that put things out of whack.

Misspellings can make it through CASS, but Stangle says they are easy to fix. Sometimes it just takes some proofreading to correct the spelling of “Maiin St.” At other times, you may have to cross-check with another list to see if Bobby Jones lives at 101 or 103 Main St.

With that in mind, mailers such as Geerlings & Wade are investing in address verification software that will assist with corrections while the customer is still on the phone.

The USPS DPV database is loaded into the call-center software. So if an address is being entered incorrectly, it will be flagged. Then the operator can ask for verification.

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