By some estimates, up to 30% of the records in house files and prospect files are undeliverable. Even among cooperative databases, up to 8% of the records may be undeliverable.
Dismal though those figures are, they also suggest huge potential for improved response. Using several list hygiene products and services, you can improve your response rates by as much as 10%.
The U.S. Postal Service licenses several valuable list hygiene tools to service bureaus. The most basic tools are zip+4, Carrier Route Coding, National Change of Address (NCOA), and Delivery Point Validation (DPV).
The Coding Accuracy Support System (CASS) improves the delivery accuracy and enables mailers to qualify for postal discounts. To receive CASS certification, the USPS requires that a mailing be processed for zip+4 and Carrier Route Coding within 90 days of the mail date. Such coding allows for automated sortation, increasing speed and certainty of delivery and postage discounts. What’s more, this coding is a prerequisite to NCOA processing. Zip+4 and Carrier Route Coding are part of the routine that all service bureaus do prior to a mailing.
As of Nov. 15, DPV has also been required for CASS certification and NCOA processing. DPV identifies invalid addresses by comparing the input file to a file maintained by the Postal Service of all valid addresses. Unlike zip+4, which matches records to ranges of addresses, DPV matches them to specific, valid addresses. DPV, however, does not assure that the actual addressee resides at the address.
Between 1.5% and 4% of records cannot be zip+4 corrected, because they simply do not match existing address ranges. If match rates for DPV are similar to those of another Postal Service product, Second-Generation Delivery Sequence File (DSF2), 7%-12% of records will not match DPV.
DSF2 uses a file of all valid delivery addresses in the U.S., akin to that of DPV. But DSF2 tags records that do not match with at least one of more than 60 footnotes providing the reasons for non-matches or identifying whether the addresses are other types of delivery points such as mail drops, multifamily units, business addresses, and seasonal addresses. Service bureaus often subsequently categorize footnotes into groups based on the likelihood of deliverability.
Available through most service bureaus, Locatable Address Conversion System (LACS) converts rural-style addresses (RR 2 Box 37, Stanton, SD) to street-style address (1034 W. Hwy 234, Stanton, SD). This conversion, needed for the 911 emergency phone system, is an ongoing process that adds about 75,000 addresses monthly. Once an address is converted, the rural version is valid for delivery for only 12 months. The average address conversion rate for most files is 0.5% of total input.
Since up to 1.5% of individuals on any given file move each month, most catalogers find it highly cost-effective to apply NCOA to all files prior to the merge/purge. NCOA will update the old address to the new one in most cases.
But NCOA will provide the new address only if there is an absolute exact match with the name and address information. NCOA does not consider a record for John Doe at 123 Main Street as a match for Jon Doe at 123 Main Street. Such close matches are called nixies.
As part of NCOA, Nixie Option Processing identifies the close matches, which usually account for 3.5%-7% of the files reviewed for address changes, and supplies footnotes as to why the matches aren’t exact. Most service bureaus categorize these footnotes into groups based on the likelihood of the person being at the address. About 20%-30% of these footnotes are indicative of “probable movers.”
Proprietary list hygiene processes
NCOA contains only address changes from the past 48 months. So when you want to reactivate older files that have not been regularly NCOA’d, you should consider the proprietary hygiene products offered by service providers. I have also simply sent files to co-op database Abacus for optimization, discarding any records that do not match the Abacus database.
Several service bureaus, including Acxiom, Donnelley Marketing, Experian, and Anchor Computer, have developed products that match input files to validated, resident-specific addresses and to address changes compiled from sources such as insurance, credit, and publishing files. Experian, for example, maintains that it can correct 30%-50% of input files that are not zip+4 coded following routine processing through comparisons to these databases. Usually, the cost of supplemental zip+4 processes is modest, about $0.04 per change.
It is also estimated that 35% of people who move each year do not file an official change of address with the USPS. Experian reports that 1%-3% of input records will match its proprietary change of address process that have not matched NCOA; Donnelley Marketing, Acxiom, and Anchor Computer make similar claims.
The above companies verify through a positive match process with their databases that the address is deliverable and the addressee resides at the address. The positive matching may also correct missing address elements such as apartment numbers. The cost of these processes varies by vendor, but charges range from $0.06-$0.10 per change, with some service bureaus also imposing a charge of up to $2.75/M for records input.
A relative newcomer to the service bureau business, CognitiveData, focuses exclusively on list hygiene using more than 20 independent databases maintained by Acxiom. Using an interactive file management system and multiple passes, CognitiveData claims its tests have shown that it can correct or suppress all but 2% of undeliverable addresses. In two mail tests of CognitiveData that I have conducted with clients, the service proved effective in identifying names to be suppressed and corrected an additional 7% of addresses not corrected by NCOA.
A suppression caveat
In addition to “deceased individual” suppression files and the DMA pander file (consisting of those who write the Direct Marketing Association indicating they do not want unsolicited mail), service bureaus frequently offer suppression files that include prison addresses, multifamily dwelling units, exact age files, bankruptcy files, college campuses, nursing homes, and commercial centers.
But do not blindly suppress any category of addresses without first testing the response to your particular offer. Some mailers, for instance, find prisoners to be excellent customers! Similarly, you should test-mail military/government addresses (APO and FPO) to determine if they are responsive to your offer — don’t assume they won’t work.
John F. Lenser is president of Lenser, a catalog consultancy based in San Rafael, CA.
A Four-Step List Hygiene Strategy
As the cost of putting a catalog in the mailbox continues to increase, advanced list hygiene processes may prove highly cost-effective. Consider the following steps to create a cohesive hygiene strategy:
- Test the response of both buyers and prospects that are not zip+4 qualified or are unmatched using Delivery Point Validation.
- Test the response of both buyers and prospects that are in each group of Nixie Option footnotes.
- Explore the data available through Second-Generation Delivery Sequence File and suppression/append options available from your service bureau to determine any potential affinities with your particular offer.
- Test advanced list hygiene products available directly from your service bureau or a firm specializing in such processing.