Best Practices for Achieving

First-Class Address Quality White Paper

Avoiding the High Cost of Bad Addresses

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Contents Introduction ................................................................................................................................................... 1 The High Cost of Bad Addresses .................................................................................................................. 2 Make Address Quality Second Nature .......................................................................................................... 3 Validate Addresses at All Points of Entry ...................................................................................................... 3 Cleanse and Update Existing Addresses ...................................................................................................... 5 Address Quality for a Greener Enterprise ..................................................................................................... 7 Decreased Waste, Increased Budget ........................................................................................................... 7 Free Address Quality Analysis ...................................................................................................................... 8 References .................................................................................................................................................... 8

Introduction At the 2009 National Postal Forum, USPS® revealed that up to 23.6% of all mail is addressed incorrectly. This means that, of more than 1 in 5 mail pieces handled by USPS, at least part of the address is missing, incorrect or misspelled — or the addressee has moved. Of course, not every organization has the same percentage of incomplete or incorrect addresses. Consider this. In 2006 The Data Warehousing Institute (TDWI) reported that while 82.5% of the organizations surveyed believed that their data quality was fine, “half of the practitioners surveyed warn that data quality is worse than their organization realizes.” This discrepancy can be attributed to several questionable assumptions: customers always provide accurate address data because they want the product or service, call center representatives diligently confirm address data during calls, returned mail and packages don’t cost that much. Unfortunately those that do not actively pursue high data quality may have much higher rates of return than they realize. USPS estimates that the data quality of stored US addresses decays at a rate of 17% per year. How is that possible? People and businesses move or go out of business, streets are renamed, and ZIP Code™ boundaries adjust as mail volume and population densities change. In reality the quality of your organization’s address data affects your ability to efficiently communicate with prospects and customers, coordinate orders and fulfillment operations and control postage, material and labor costs. Improving address quality through point-ofentry validation, regular database cleansing and removing duplicate entries allows your organization to control costs, improve efficiency and even increase revenues.

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The High Cost of Bad Addresses Cost Factors Wasted materials

USPS reports that bad addresses cost it nearly 2 billion dollars annually. The true cost runs much deeper. Nearly every cost incurred by USPS is matched or exceeded by the mailer.

Lost postage

UAA Result

Cost to USPS

Cost to Mailer

Address correction fees

Return

51.3¢/ea.

Original postage + cost of mailer + any return service and address correction fees

Delayed payments

Discard

4.4¢/ea.

Original postage + cost of mailer

Redelivery costs

Forward

21.3¢/ea.

Original postage + cost of mailer + any address correction fees

Return service and address correction fees are dependent on the mailing class and service type selected.

For a very conservative example, consider that for a mailing of 10,000, where it cost $1.50 for printing, postage and mailing preparation, a 20% undeliverable rate equals 2000 printed pieces thrown-out and $3,000 in wasted budget. Beyond these hard costs, the response rate could have been 20% higher. Bad addresses can cost shippers even more. Most common carriers charge up to $10 for any address that is incorrect, even if they are able to deliver the shipment on the first try. This often happens when a unit number is missing or incorrect, but the delivery person is able to determine the correct address onsite. Surprisingly, this is the best-case scenario; otherwise the package is returned to the shipper. Now the customer must be contacted and the order reshipped. Even if the problem with the address originated with the customer, some level of dissatisfaction with the transaction remains. These costs may seem small, but they add up fast. If only 10% of an organization’s addresses are bad, 10% of the budget spent on shipping and mailing is wasted. Researching and correcting the bad addresses once they are identified through returns represents more costs and possibly lost business opportunities. 10% is conservative. As noted, without an address management system, the percentage of bad addresses is likely to be twice as much.

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Make Address Quality Second Nature The best address quality solutions require little training or extra effort. Integrating a validation solution into common entry points and batch cleansing and updating on the backend makes maintaining address quality less onerous. The benefits in saved time, resources and money affect more than just marketing, fulfillment operations or IT. As forward thinking organizations are starting to realize, the net result is more profitability.

Validate Addresses at All Points of Entry Much of an organization’s address quality problem begins at the point of entry, and a back-end processing method cannot provide a full remedy. The reason is simple: addresses already in a database can only be corrected and updated if there is enough valid information for the software to identify a match. If a sufficiently erroneous record is entered or a unit number is missing, the backend process will not have enough correct data to determine which address it should be.

Validate Addresses When taking orders During service calls At retail counters In web forms

First, organizations need to determine how addresses are entering their data stream. In some cases an address validation system may seem counterintuitive. Surely customers placing an order will make sure their address is correct. The truth is that people are in a hurry and may assume that they typed their address correctly or that the call center representative heard them correctly. Frequently this is not the case; up to 1 in 4 times it is not the case.

At self-service kiosks

Organizations need to make address quality a priority and use verification software in their call centers, Web forms, and when entering written requests for information — a comprehensive solution attends to the quality of addresses at every entry point. Using point-of-entry address verification, errors are detected and corrected while the original data is being recorded. After all, the person making the entry is the best person to fix an error before it is lost inside a massive address file. If the address doesn’t pass verification, more information can be requested immediately. This instant address verification also makes it easier to flag or merge duplicate address records because the addresses are formatted to USPS standards.

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On Web Forms Organizations that collect address data on their websites often suffer from poor address quality. The many incomplete or incorrect addresses entered often result in wasted resources, lost opportunities and poor customer experiences. Poor address collection undermines the hard work put into website optimization, pay-per-click advertising and multichannel marketing.

Point-of-Entry Validation Results Input 620 s alder stret newportt or

Corrected address 620 SW Alder St Newport OR 97365-4997

Many organizations provide a free service, report or software in exchange for registration. Integrating point-of-entry address validation into web forms ensures that addresses are correct before the registrant collects their premium and leaves your website. With the right address quality system the process is seamless and takes no more time than typical form validation checks. •

Visitors receive friendly instructions to correct addresses — or flag the record for alternate resolution.

Directional and ZIP changed Matched to the ZIP+4™ file. Input Primary matched, but highrise missing secondary number.

•

Shorter forms result in a higher registration rate. Remove the city and state fields — the street address and ZIP Code are all that’s needed.

Optional information

•

Duplicate registrations can be detected and merged or restricted more easily.

Notes

County name: Lincoln County code: 41041 Delivery point check digit: 993 Carrier Route: C003 PreDirectional: SW Congressional District: 5

In Call Centers One of the performance measurements most call centers use to evaluate its representatives is their ability to complete calls within a specific timeframe. In the rush to complete the call, it’s very easy to mistype a street number, leave off the directional or misspell the street name—especially if the caller has a bad connection or thick accent. In a busy call center environment, a good address data entry system will both save time and ensure valid address entry. Once the representative collects the caller’s ZIP Code™, just the street number and a few letters of the street name are all that’s needed to drill down to a valid address. Callers no longer have to spell and clarify uncommon city and street names — both parties avoid this major hassle. Plus, the call center representative can immediately be notified that the address is a USPS delivery point and if it is residential. This helps determine the best shipping method when an order is being placed.

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Point-of-Entry Validation ROI The cost of an address capture solution for every data entry point is quickly offset by the savings incurred by reducing undeliverable mail, manual correction of addresses and lost productivity. When a complete address can be entered with as little as a postal code and street address, Web forms can be shorter, which encourages more people to complete them. Advanced call center software can identify an address with only a partial company name. Implementation need not create a huge IT or training burden. Once installed, the right software is intuitive enough for data entry representatives to learn quickly. Features can include on-thefly field mapping, making it easy to set up and use with any entry form, in any application or browser.

Cleanse and Update Existing Addresses As noted earlier, 17% of an organization’s addresses will change over time. Point-of-entry software does not eliminate the need for on-going address maintenance, which includes batch cleansing and change-ofaddress processing through NCOALink® processing or some other address change notification system. Point-of-entry validation does, however, improve the efficiency of any address maintenance processing. Simply put, an uncorrectable address cannot be updated by an automated process. A person must research uncorrectable addresses. Sometimes it just takes a phone call, email or Internet search to correct the error. Without a phone number or email address… well, the contact may be lost. In any case, the time spent by any person increases the overall costs of bad address incurred by your organization.

Maintain Quality Revise addresses converted by USPS Update addresses due to moves Add missing data Standardize formats Identify and remove duplicates

Batch Address Cleansing Software certified by USPS® to provide CASS™ batch-cleansing processing checks all records and returns standardized address data. Spellings, abbreviations, city names and ZIP™ codes are all corrected to meet USPS guidelines. Any missing postal data elements, including nine-digit ZIP codes, line of travel data, carrier route numbers, delivery points, geocode information and more can be added for future use. When an address cannot be corrected or validated, useful error information makes it possible to flag the record for more research. A batch address cleansing process can be performed in two ways. The first option is to lockdown your database, export your address records and send them to a vendor for processing. After a few hours or days, the vendor returns the address list, which must then be reconciled back into the database. The second option is to integrate an address quality process into the database. This requires a little more IT work upfront, but Achieving First-Class Address Quality | 5

eliminates the need to lockdown the database, wait for an outside vendor, or reconcile corrected records.

Move Update Processing Of the nearly two billion dollars that undeliverable and badly addressed mail cost USPS annually, it estimates that 79% is related to handling moves. No wonder the USPS Move Update standard has become more stringent. Now all addresses used for First-Class Mail® and Standard Mail® must be updated within 95 days prior to mailing to qualify for discounted postage rates. Of all the approved Move Update methods, the NCOALink service is the only one that updates addresses before printing and mailing costs are incurred. NCOALink processing checks an address list against the USPS NCOALink data set and returns the addresses of the people and businesses that have moved. Many organizations perform these processes infrequently, because change-of-address processing can be time-consuming and expensive. And merging the data can be difficult and prone to error. This can be avoided by choosing an integrated address cleansing and updating, like MailRoom ToolKit® Architect. Integrated products provide built-in NCOALink processing, which eliminates the need to manually export; then import address files between systems. Even daily updates are operationally and economically practical.

Identify and Remove Duplicates Duplicate address entries cause more problems than just wasted materials. They waste time and may lead to poor customer satisfaction. Imagine the problems and ill will generated when a customer record is duplicated as a prospect. This can happen when a contact comes through a call center but purchased through a website or visa-versa. That customer may get promotions for a product they already own, perhaps at a lower price, resulting in a poor impression of the organization. Good address management includes standardizing each address so that each element is similarly formatted regarding abbreviations. This makes it easier to find and remove these duplicate addresses. Even loyal customers prefer not to receive duplicate promotions.

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Address Quality for a Greener Enterprise Within the last decade general awareness of environmental concerns has become front-page news. Independent studies conducted by Global Market Insite, the Carbon Trust and ICM Omnibus show that the majority of consumers in the U.S. and U.K. are concerned about climate change and what they can do to make a positive impact. Even the current economic situation has only drawn more attention to green business practices. Beyond the hope for economic recovery through the creation of green business, organizations are realizing that environmentally friendly practices can save money today, often with little additional start-up expense. Point-of-entry validation, regular database cleansing and removing duplicate entries allows an organization to produce only the materials needed to achieve business goals. Updating moves and removing duplicates and undeliverable addresses before mailing saves paper and energy that would be wasted on mail that could never result in ROI. Address management is the most pain-free and economical method to improve a mailer’s impact on the environment. It’s a painless reduction in the carbon footprint that makes good economic sense.

Savings & Benefits Reduced materials Less postage costs Faster mail delivery Better direct mail response rates More timely payments More reliable shipments Increased customer satisfaction A better corporate image

Decreased Waste, Increased Budget Sometimes the most effective financial decisions are also the most uncomplicated. An address quality solution offers one of the simplest, most profitable investments your organization can make. What makes this investment so extraordinary is that its results are so easily calculated. Based upon the way your organization uses contact data, you can determine where your most significant savings will manifest. Cost justification, based upon return-on-investment, can quickly be penciled out. An address quality solution maximizes your direct marketing, shipping and mailing budgets, making your dollars go much further. MailRoom ToolKit products deliver exceptional, surprisingly affordable address quality.

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Free Address Quality Analysis To determine if your organization’s address quality can be improved, you can track your returned mail for few weeks, take a quick look at your shipping address change fees for the past month or simply contact a Satori Software representative for an address quality checkup. In an hour or less we can help you better understand your opportunities for address quality and postage savings. Our experts, together with your team, will map out the next steps on your way to address management success. Our program will help you answer the questions: •

How much are we losing because of bad address quality?

•

Which postage discounts are available to my organization?

We’ll evaluate the opportunities and savings your organization can achieve with an address management solution. Once the solution and return on investment are identified, we will help develop an appropriate implementation strategy that can be used by you or in conjunction with our Professional Services team. To schedule your Address Quality ROI Evaluation, call 800-553-6477 option 3 or email [email protected].

References “Intelligent Addressing To Achieve 100% Mail Integrity,” National Postal Forum, May 2009 “New Move Update Standards,” USPS workshop, April 2009 “Taking Data Quality to the Enterprise through Data Governance,” The Data Warehousing Institute, March 2006 “What are “Bad” Addresses & What Do You Do with Them—Exactly?” National Postal Forum, May 2009 “90% of Americans Concerned About Environment,” GMI Poll Press Release, April 2006

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Best Practices for Achieving First-Class Address Quality February 2010 ©2010 Satori Software, Inc. All rights reserved. Satori Software, Bulk Mailer and MailRoom ToolKit are registered trademarks of Satori Software, Inc. Satori Software is a nonexclusive NCOALink Full Service Provider Licensee of the United States Postal Service®. The following trademarks are owned by the United States Postal Service: CASS, CASS Certified, First-Class Mail, NCOALink, PAVE, Standard Mail, ZIP, ZIP Code, ZIP+4, USPS and United States Postal Service. AD#1.10 www.satorisoftware.com