Addressing

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• Addressing Your Bottom Line

Presented by (insert name here)
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Agenda

• Address Quality
• Lists
• Impact on Delivery
• Real Cost!
• Success
• Strategy
• Products
• Recapture Your List
• Questions

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Four Basic Address Quality Questions

• What Are You Doing Now?
• What Should You Be Doing?
• Why Does It Matter?
• How Can You Succeed?

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What Are You Doing Now?

• Purchasing / Renting / Building address lists?
• Verifying address quality?
• Accepting current response rates?
• Worrying about your postage costs?

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America is Growing On the Move

• 14.2 of all Americans move each year
• 41.1 million individual / family
  Change-of-Address (COA) filings
• 19.3 of all businesses move each year
• 2.3 million business COA filings
• 156 million delivery points in USPS database
• 1.8 million new addresses are added each year

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Impact on the Postal Service You

• In 2004, USPS processed 206.1 billion mailpieces
• Approximately 5.6 billion pieces were
  Undeliverable-as-Addressed (UAA)
• Over 1.857 billion was the cost for handling
  UAA mail

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The Address Quality Equation

• Physical Address Quality
• Move Update Quality
• Deliverable Mail

• It
• Just
• Adds
• Up!

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What Should You Be Doing?

• Insist on high standards from suppliers
• Manage your address files
• ZIP4 Coded Cass Certified Software
• DPV Delivery Point Validation
• AEC Address Element Correction
• NCOALink National Change of Address Link
• Lower your costs
• Lower your postage
• Increase your response rate
• Improve your R.O.I.

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Other Approved Move Update Methods

• NCOA
• Ancillary Service Endorsement (on piece)
• Address Change Service (ACS)
• Two Alternative Options
• First is for Mailers with legal or policy
  restrictions from using USPS COA information
• Second is the 99 Accuracy Test

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Why Does it Matter?

• BECAUSE it impacts your
• Costs
• Postage
• Response Rates
• R.O.I.

Its Your
Bottom
Line!
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How Can You Succeed?

• Implement a comprehensive address quality
  strategy
• Better utilize available addressing products and
  services
• Track your mail channels R.O.I.

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DMA Statistical Fact Book 2004
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Customer Mailing Scenario

• Mailing
• Standard Mail
• 4 times x year 1,000,000 mailpieces
• 250,000 mailpieces
• Letter, brochure, reply card, and a BRE
• 3.2 ounces
• Address management process
• CASS-Certified ZIP4 software
• Results 8 of the addresses cannot be ZIP4
  Coded
• 8 x 1mm 80,000 non-coded ZIP4 mailpieces

Example piece has been taken from DMA
Statistical Fact Book 2004
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Customer Mailing Scenario

• Impact on rate qualification
• 920,000 pieces claimed at automation rates
  (ZIP4)
• 80,000 pieces must be claimed at non-automation
  rates
• Impact on total postage
• Average 4.8 higher cost per non-automation
  mailpiece

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Impact Move Update

• Impact to Annual Mailing Costs
• 100,000 pieces X 74 (per piece production cost)
  74,000
• 100,000 pieces X 20.3 (per piece postage cost)
  20,300

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Combined Wasted Production Postage Cost
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Lost Sales Opportunities

• Fewer responses Fewer sales or Opportunities
• Impact to Bottom Line
• 176,800 UAA discarded mailpieces
• 2.5 response rate
• 50 average sale per customer
• 176,800 X 2.5 X 50 221,000 lost sales/year

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Annual Impact to Your Bottom Line
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Long Term Adverse Impact to your Bottom Line

• Customer Life Cycle 5 to 7 Years
• 221,000 (lost sales per year)
• x 5 Years (customer life cycle)
• 1,105,000 (total lost sales)
• 172,329 (higher postage/wasted production
  postage/year)
• X 5 Years
• 861,645 (total wasted costs)
• 1,105,000 861,645 1,966,645 Loss

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How Can You Succeed?
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A Strategy to Improve Your R.O.I.Addressing
Products that Can Make a Difference

• ZIP4 Coding Accuracy Support System (CASS)
• Delivery Point Validation (DPV)
• Address Element Correction (AEC)
• National Change of Address Link (NCOALink)

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ZIP4 Coding Accuracy Support System(CASS)

• USPS benchmark
• Sets performance standards for commercial ZIP4
  address matching software.
• Must pass USPS test for CASS-certification
• ZIP4 address matching software attempts to
  match addresses against range-based records on
  USPS ZIP4 file Example 100-110 MAIN ST
  ANYTOWN, TN 38138-6038

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Delivery Point Validation (DPV)

• Extension of CASS-certified ZIP4 software
• Available through software vendors
• Enables ZIP4 Coding identifies potentially
  undeliverable addresses
• DPV - Extra step to attempt validation of each
  specific address in the file
• Example 100 MAIN ST
• ANYTOWN, TN 38138-6038 Confirmed
• 104 MAIN ST
• ANYTOWN, TN 38138-6038 Not Confirmed

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Address Element Correction (AEC)

• USPS provided service for all customers
• Resolves physical address deficiencies
• Submitted on electronic media to USPS
• Cost - 15.00 per thousand
• Average correction rate - 35

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National Change of Address(NCOALink)

• USPS licensed product
• Provides electronic Change-of-Address
  information prior to mailing
• Variable costs
• Average correction rate - 5.18

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1,000,000 AddressesZIP4 / DPV Processed

• Un-codeable mail sent to AEC 116,800
• AECs - 35 correction rate 40,880
• Residual potential UAA addresses 75,920

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AEC / DPV Financial Impact

• AEC Fixed addresses 40,880
• Postage rate savings (upgraded to auto)
  1,308
• Postage savings (no longer wasted) 9,524
• Production savings (no longer wasted) 30,250
• AEC subtotal savings 41,082
• Residual UAA addresses 75,920
• Postage savings (not mailed) 17,677
• Production savings (not mailed) 56,180
• DPV subtotal savings 58,759
• Total combined AEC/DPV savings 99,841

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NCOALink Processing

• 1,000,000 Mailpieces
• 75,920 Uncodeable, DPV AEC
• 924,080 Submitted to NCOALink
• X 2 NCOALink corrections
• 18,482 Corrected addresses
• Production savings 13,676
• Postage savings 3,752
• Total combined NCOALink savings 17,428

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Recapturing Lost Sales

• Addresses saved by AEC 40,880
• Addresses saved by NCOALink 18,482
• Total Addresses Corrected 59,362
• 59,362 (addresses) x 2.5 (response rate) x 50
  (per sale)
• 74,203 - Total Recaptured Sales

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Address Quality R.O.I.

• Investment
  Return
• ZIP4/DPV 850 58,759
• AEC 1,752 41,082
• NCOALink 1,386 17,428
• Lost Sales 0 74,203
• Totals 3,988 191,472
  - 3,988
• Net Improvement to R.O.I. 187,484

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Addressing and your Bottom Line

• Address Quality is just Smart Business!
• IT
• IS
• YOUR
• BOTTOM
• LINE

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Addressing and your Bottom Line

• For more information on the full suite of USPS
  Addressing products
• Contact the USPS National Customer Support Center
  at 1-800-238-3150
• Go to www.usps.com

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Questions?