In my last education piece regarding Postal Transformation, I focused on the significant changes happening within the USPS as they related to the USPS Strategic Transformation Plan. The concept was, businesses must take action to align their mail production with the direction of Postal Service initiatives. By doing this, businesses can identify opportunities to make positive contributions to their bottom line. Additionally, the article highlighted the notion that mail is a vehicle for business communication, and therefore, companies must begin to view mail in a more strategic way to maximize the effectiveness of this communication vehicle.
The USPS continues to announce and implement new requirements for business mailers, the latest being the Move Update. As of November 23, 2008, requirements for Move Update will be changed as part of the USPS' initiative to reduce UAA (undeliverable as addressed) mail.
Two specific key components are:
- The USPS is increasing the minimum frequency of processing from 185 days to 95 days prior to the date of mailing.
· The USPS is expanding Move Update from First-Class Mail to automation and presorted mailings to include all Standard Mail. And with a little planning, all businesses, whether they are affected by the new rules or not, can use these changes as a springboard to positive change. For more information please visit http://ribbs.usps.gov/files/Move_Update/MUP_overview.html.
First, a little history. Move Update is part of the post office's initiative to reduce the amount of undeliverable-as-addressed (UAA) mail by providing ways for companies to reduce the number of mailpieces requiring forwarding or return. In effect for First-Class mail for quite some time, the rationale behind the initiative is not hard to comprehend: UAA is a major expense for the USPS and costs close to $1.9 billion dollars each year. To take this one step further, the USPS estimates that 45 million Americans and 2.3 million businesses change addresses every year. This means, on average, your database deteriorates 1% per month without "addressing" these facts. So, if you haven't updated your list for a year, you are sending 10%-15% of your mail potentially undeliverable.
There are a number of business mailers that will not fall under the Move Update requirement. If you're one of those unaffected businesses, you should just shrug your shoulders and go back to what you were doing, right?
Wrong. If you send out a piece of mail with a poor quality address, there are two things that can happen. Either the delivery of the piece will be delayed, or the piece will not get there at all. You could be delaying cash flow or missing out on an opportunity to get a new customer. What could be worse?
A mid- to small-sized mailer may look at new postal regulations such as Move Update and think, "This doesn't affect me. I'm not a bulk-mailer, and I don't think I even qualify for these huge discounts." As a result, they ignore these changes that the post office is instituting. The reason that the post office is doing this is to improve the deliverability of mail. Whether a company is sending one invoice or a million invoices a month, why wouldn't you want it delivered? This is not a big mailer conversation; it is an every mailer conversation. By sending out undeliverable mail, you are losing money every day.
What is the purpose of mail? You send out a piece of mail because you want to communicate a message to a customer, prospect, vendor or organization. You want it to be delivered to your recipient at the most appropriate time in the most appropriate fashion, and make it as easy as possible for them to pay their bill, respond to an offer or become a customer. If you don't think about how you're going to put an accurate, clean, up-to-date address on the mailpiece, you may be jeopardizing the chances it will reach its destination.
Think of these consequences in terms of a direct mail campaign. If you send out 10,000 mailpieces, as many as 1,500 mailpieces may be undeliverable due to bad addresses. The response rate to your direct mail campaigns is typically 3%, a relatively conservative number. That means, of the 1,500 pieces that don't get delivered, you've lost 45 prospects who normally would have responded to your offer.
Now let's say you usually close a sale with 50% of your prospects. The bottom line? Out of the 45 prospects missed by your direct mail campaign, you've lost 23 customers. This will clearly affect your bottom line.
So, what steps are required to improve mail deliverability? While this may seem like a complex task for an organization that has never considered address quality as a top priority, the process is quite simple. In truth, Move Update is only one piece of the puzzle. The first step is to verify that every address in your database is an actual deliverable address; this can be done using a CASS-certified software tool. These tools are connected to USPS databases that are updated every two months with the latest carrier route information.
This is a good first step but not the end of the process. CASS-certified software will verify that the address "exists," but not that the individual name in your database still resides at this address. To determine this, Move Update is used. The best address quality tools (software) also perform a process called NCOALink. This process compares a company's database to the National Change Of Address database maintained by the USPS. It will return updated address information on any individual or business that has submitted a change of address form to the post office. Many of these services have 18 months of data they compare with, while a few of the better tools maintain 48 months of data. By implementing these address quality tools, any organization utilizing the Postal Service to communicate with customers and prospects can benefit.
Looking at this issue from a more global perspective, what is the ultimate lesson here? The lesson is that even businesses which fall outside of the jurisdiction of new postal regulations can benefit from them. But in a greater sense, it's clear that all businesses, including the businesses that must comply with these rules, can turn the changing postal environment into golden opportunities.
Before considering why, understand this simple truth. While the USPS does have a strategic goal of improving the service it provides its customers, it is implementing this new requirement for the same basic reason it introduced Shape-Based Pricing, annual rate increases and other such initiatives: to reduce costs and maximize revenue as part of its plan for "strategic transformation."
The Postmaster General has made an iron-clad commitment to improving the post office's viability as a service organization. Fulfilling this commitment necessitated the enactment of some strategic internal changes, as well as new external regulations to increase profitability.
Regardless, there is no reason why a business of any size can't use these changes to their advantage. All businesses need to think about the value of the service that the USPS provides, and then start to align the objective they have for their mail - communicating a message to a user, customer or prospect - with these changes.
Understanding the ramifications as well as the benefits of the USPS's new regulations can prove an immense task. The USPS does offer various avenues for assistance - online, by phone and in person. Plus, company representatives can educate themselves sufficiently to become valuable internal resources. Perhaps the best source of knowledge is a third-party postal company like Neopost. You can learn about the latest postal updates and strategies by going to resources such as http://www.neopostinc.com. We see our role as "educational intermediaries," positioned directly between the business community and the services that the post office provides. Our mission is to help businesses leverage the changing postal environment to make positive contributions to their bottom line. If we do the job right, everyone wins.
In terms of the Move Update requirement, it all comes down to this: regardless of quantity, we want the invoices, documents and direct mail pieces we generate to be correctly addressed.
In the bigger discussion of postal transformation, you should recognize that the post office is making changes for its own good - but these changes can exert a positive influence on your company if you pay close attention to them and align your business alongside the USPS' new processes and procedures. In this case, asking "What's in it for me?" is not being selfish. It just makes good business sense.
It's time to reach out to your postal partner to better understand when you should look at taking this next step in the ongoing Postal Transformation. At the end of the day, it's costing you time and money if you don't!