A complete, correct, and current name and address on the mail piece is the foundation for any successful mailing campaign. This “3C Approach to Address Accuracy” is something that I’ve personally been preaching for nearly a decade. It is essential for achieving postage workshare discounts and is the only way to ensure timely, predicable, and ultimate delivery of the mail.
It has been two years since the USPS began requiring an approved Move Update compliant methodology prior to the mailing for all discounted Standard and First-Class Mail. The basis for this was the UAA (Undeliverable As Addressed) Mail Study conducted in 2004. That study revealed that nearly ten billion pieces of mail were undeliverable as address each year costing the USPS (and effectively the mailing industry) nearly $1.5 billion. The vast majority (over 75%) of the attributable costs and volume were move-related addresses, thus clearly supporting the Move Update requirement.
To ensure that the industry is following this requirement, the USPS enhanced their PBV (Performance Based Verification) system, which leverages the MERLIN technology and is actively verifying Move Update compliance. Today’s tolerance threshold is 70 percent. Anything below that amount will result in a postage assessment at the time of acceptance charged at 7 cents per piece across a prorated amount of the entire mailing.
The exigency rate case (R2010-4), which was rejected by the Postal Regulatory Commission, proposed increasing that tolerance to 75 percent on January 2, 2010. Since R2010-4 was rejected, the tolerance increase was also rejected with it. However, it is very likely that the USPS will still push for an increase in the tolerance in 2011 to at least the 75 percent amount. Yet, that is just the beginning. At the August 2010 Mailers Technical Advisory Committee meetings, the USPS stated that they intend to increase the tolerance to 85 percent in 2012 and ultimately 95 percent in 2013.
Justification for this increase in the Move Update compliance tolerance is based on a performance study conducted by the National Customer Support Center (NCSC), which is the source of the change-of-address data and where the enhanced PBV system actively evaluates mailing samples via MERLIN. Between May 9 and July 15 of 2010, the USPS evaluated 45,589 mailings for Move Update compliance. Of those, 98.8 percent of the mailings passed with an average score of 99.7 percent. The 1.2 percent that failed did so miserably at an average score of 64.04 percent. This resulted in postage assessments totaling $47,000 across the 546 failed mailings.
While the average score of over 99 percent is certainly encouraging news and part of the basis by which the USPS intends to progressively move toward 95 percent tolerance, caution should be considered. First, the sample timeframe is relatively short and doesn’t consider seasonal mailings such as the traditional fall mailing season. Second, this sample timeframe does not consider certain types of mail lists, such as election and voter registrations, which have been known to contain a higher amount of non-current addresses. Third, it is not readily apparent what classes of mail were involved in this study. This is important as First-Class mailers often have legal restraints that can inhibit updating addresses without the recipients’ specific authorization.
While the industry and the USPS may debate aggressively over what the specific tolerance should be for PBV, the common goal of improving the value of mail through quality addresses is still shared. Astute mailers know that the address is not only crucial for timely mail delivery; it is also the foundation for effective matching and consolidating of data to provide additional content about the recipient. Through this data enrichment, a more personalized message can be crafted and when leveraged with the Intelligent Mail barcode can be an effective way to deliver a multichannel message to customers at the right time and in the right manner.
The future of mail is all about quality and no longer quantity. We may never again see 200 billion pieces annually. However, with improved data sources, continually enhanced software technology, and a 3C approach to address quality, we can all strive to make every mailpiece and indeed every message count.