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Address Updating Whitepaper
Address Updating Whitepaper
ADDRESS UPDATING
Key to Reducing Undeliverable-as-Addressed Mail
Introduction 2
The USPS and Mailers Get Serious about Deliverability 2
The Challenge 3
44 million+ Address Changes Every Year 3
Expanding and Enforcing the Rules 3
Tools and Technologies 4
Reviewing the Arsenal of Move Update Methods 4
NCOALink System 4
ANKLink—An Add-on to NCOALink 4
FASTforward 4
ACS 5
Ancillary Service Endorsements 5
Alternative Move Update Methods 6
The Approach 6
A Blend of Pre- and Post-Mailing Updates 6
Pre-mailing Update—Highest ROI 6
Post-mailing Update—Safety Net 7
Recommended NCOALink Address Update Strategy 7
Pre-mailing Tactics 7
Post-mailing Tactics 8
Processing in-house, externally, or both 8
Summary 10
Resources 10
About the Authors 11
About Lorton Data 11
About Business Objects 11
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INTRODUCTION
THE USPS AND MAILERS GET SERIOUS ABOUT DELIVERABILITY
The United States Postal Service® (USPS®) is taking the issue of undeliverable-as-addressed
(UAA) mail very seriously. And well it should, since UAA mail costs the agency nearly $2 billion
annually. It’s such a major drain on USPS resources, in fact, that Postmaster General Jack Potter
made a bold call to action: a 50% reduction in UAA mail by 2010.
UAA is very costly to businesses, too. The discussion of mailing economics often centers on
postage and the potential loss of Postal Service™ automation discounts when addresses are
inaccurate, incomplete, or not current. However, according to the Direct Marketing Association,
postage accounts for only 24% of the overall costs related to a mail piece. When an address is
undeliverable, for whatever reason, the entire mail piece is lost—therefore, business mailers must
consider the total cost of producing and mailing the piece.
Not so immediately obvious is the cost of missed opportunities—particularly if your business relies
on advertising mail to sustain and grow the enterprise. Each undelivered mail piece represents the
potential loss of a sale, revenues, profits—and a customer.
On average, according to the USPS, 6.4% of the pieces in every direct-mail campaign are UAA and
may never reach their intended destination. What if mailers could somehow prevent this previously
undeliverable mail from reaching the waste bin and redirect it to their customers and prospects?
Even a percentage point or two of increased response could drive significantly stronger results at
the bottom line.
This white paper focuses on the single largest contributor to UAA mail—the estimated 44 million-
plus Americans (17% of the population) who file changes of address with the USPS every year. In
addition, 2.3 million U.S. businesses file changes of address annually.
The fundamental question to be answered: How can businesses—both mailers and their mail
service providers—keep their mailing lists in sync with a highly mobile society? Today, more than
ever, the answer is change-of-address processing. Increasingly, the USPS requires it, offering
incentives to mailers who keep their mailing lists current—and disincentives to those who don’t.
Equally important, if not more so, sound business practices dictate change-of-address processing.
Fortunately, mailers enjoy access to a growing arsenal of tools and services that support address
update best practices.
Besides discussing the various tools and services available today, this paper presents
recommendations for deploying an effective address update strategy—one that yields optimal
results and a strong return on investment (ROI).
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THE CHALLENGE
44 MILLION+ ADDRESS CHANGES EVERY YEAR
The extent of the challenge is nothing short of astonishing. More than 44 million people file change-
of-address notifications with the USPS every year. During peak periods, this translates to 1 million
or more address changes per week.
Extrapolating the numbers further, 400 to 500 individuals in a database of 1 million names can be
expected to file changes of address every day. In light of these statistics, it’s easy to understand
why the typical mailing list deteriorates by 1% per month.
The negative impact on business may be measured from a few different perspectives, starting with
the direct cost of wasted mail. If each mail piece costs $1.10 to create, print, and mail, and
assuming 7,500 pieces from a list of 100,000 are not delivered due to address errors, the resulting
waste constitutes a loss of $8,250.
If the mailing promotes a product or service, the stakes are dramatically higher. From a mailing list
of 100,000, the 7,500 pieces that never see the inside of a mailbox could easily represent a
$15,000 sacrifice in revenue, based on a 1% sales rate and an average of $200 per order.
Multiplied over several mailings during the course of a year, as well as over the lifetime of each
new customer, the cost of taking no corrective action reaches staggering proportions.
Currently, the Postal Service requires mailers who receive First-Class Mail® presort and automation
rates to update their addresses within 185 days prior to a mailing. By early 2009, this window is
expected to shrink to 95 days, and the Move Update requirement will extend to Standard Mail®,
which is currently the largest class of mail in terms of volume, and which consists primarily of
advertising mail.
Noncompliant mailers* face the very real prospect of losing their postage discounts, which range
from $50 to $95 per thousand (for First-Class Mail). They also may be hit with back charges and
penalties—additional costs for failing to adequately engage in an address update strategy.
For all types of businesses, the motivation to effectively and consistently apply address updates to
mailing lists has never been greater. The next section of this paper outlines the change-of-address
tools and technologies that can support timely and predictable mail delivery, while helping to
ensure compliance with USPS requirements for postage automation discounts.
*
The USPS enforces Move Update rules through the Postal Automated Redirection System
(PARS). This system enables the Postal Service to monitor each mailing right down to the
individual pieces. Scanning address fields and comparing them with postage indicia, PARS flags
any First-Class Mail piece for which a presort or automation discount is claimed but that doesn’t
meet Move Update requirements.
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TOOLS AND TECHNOLOGIES
REVIEWING THE ARSENAL OF MOVE UPDATE METHODS
As pointed out previously, the single largest factor in UAA mail is the failure to keep addresses
current with Postal Service change-of-address filings.
Because address updating poses such a major challenge to so many mailers, this section limits its
focus to change-of-address tools and technologies. However, before any address may be
considered for move update processing, it should be complete (i.e., ZIP + 4® code, street name,
city, state, and directional information) and correct (accurate address, fixed misspellings, and
approved abbreviations).
Currently, the USPS allows mailers to use four “approved” and two “alternative” Move Update
methods.
Approved Methods
Link
NCOA ™ System
®
FASTforward (for multiline optical character readers only)
ACS™
Alternative Methods
Legal restraint
99% accurate
NCOALINK SYSTEM
Most organizations generating a substantial level of advertising mail will make NCOALink the
backbone of their address update initiatives. At any given time, NCOALink contains more than 160
million address changes.
In a nutshell, mailing lists processed through NCOALink are updated prior to the mailing, using
change-of-address information filed with the Postal Service. The USPS offers three levels of
NCOALink licensing:
1. Full Service License—Access to the USPS change-of-address database for the preceding 48
months; includes weekly updates.
2. Limited Service License—Access to the 18-month change-of-address database; includes
weekly updates.
3. End User License—Access to the 18-month change-of-address database; includes monthly
updates.
FASTFORWARD
FASTforward is similar to NCOALink in that it applies address updates from the USPS permanent
change-of-address database prior to the mailing. However, FASTforward requires the use of a
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multiline optical character reader (MLOCR), and it contains updates from the previous 13 months
(vs. 18 or 48 months for NCOALink). As mail pieces pass through the MLOCR equipment, names
and addresses are checked against the Postal Service database. When a change of address is
warranted, the correct address and barcode are sprayed on the mail piece.
ACS
Although the ultimate result may be the same, ACS differs from NCOALink and FASTforward in one
fundamental aspect: Address changes are identified and communicated to the mailer after the mail
pieces enter the mail stream.
Provided by the USPS® National Customer Support Center (NCSC), ACS delivers change-of-
address information to mailers electronically (via secure web site or CD-ROM) or manually (paper).
ACS participants may choose to receive address correction notifications daily, weekly, biweekly,
monthly, or bimonthly. Costs apply to ACS services, ranging from 6 cents per corrected address for
First-Class Mail® and electronic notification to 50 cents per corrected address for all other classes
using paper notification.
With implementation of the new Intelligent Mail® barcode, the USPS has improved ACS by creating
the new OneCodeACS™ solution. OneCodeACS is available for First-Class and Standard letter-
shaped mail, providing a very cost-effective method for obtaining change-of-address information.
OneCodeACS for First-Class™ letters is free for the first two notifications and costs 5 cents
thereafter for each notification of an address change. Standard Mail pricing is 2 cents for the first
two notifications and 15 cents for each subsequent notification of an address change.
It’s important to note that ancillary service endorsements may involve substantial USPS charges,
intended to cover additional handling costs incurred in the forwarding processes. The Postal
Service bases its fees on mailer weight and the appropriate single-piece First-Class Mail rate, plus
a non-machinable surcharge, if applicable. The sum from this formula is multiplied by 2.472 and
rounded up to the next whole cent.
The USPS collects any fees for ancillary service endorsements after the mailing has occurred. This
may pose logistical difficulties for lettershops or mail service providers as they attempt to collect
additional postage from their customers.
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ALTERNATIVE MOVE UPDATE METHODS
Some mailers who meet certain criteria may satisfy Move Update requirements without any of the
approved methods described above. The two alternative methods, both of which must receive
advance USPS approval, are:
Legal restraint method—This method is for organizations that are restricted from incorporating
Postal Service change-of-address information into their mailing list without permission from
addressees. Nongovernmental entities must provide a citation of the specific legal restriction and
copies of the statutes or regulations.
99% accurate method— This method is for mailers whose customers diligently provide
notification of address changes and who can demonstrate that their mailing lists are at least as
current as the Postal Service database. It requires an ancillary service endorsement, advance
approval from the USPS, a multistep validation process, and an annual letter to the USPS
confirming current eligibility.
THE APPROACH
A BLEND OF PRE- AND POST-MAILING UPDATES
In a competitive and cost-conscious marketplace, the value of change-of-address processing is
well-documented. According to the USPS and mailing associations sources, some mailers have
realized as much as a 20-to-1 ROI—$20 gained for every dollar invested.
(Because of the many variables involved, ROI varies from one business to the next. The USPS has
developed an easy-to-use worksheet for calculating potential ROI—see the “Resources” section at
the end of this paper.)
For most companies, especially those relying on mail as a primary marketing tool, the question is
not whether to implement a change-of-address program, but how to proceed. Specific questions
may include:
Which tools and technologies deliver the best results and ROI?
Which criteria should a mailer use in choosing change-of-address products, services, and
vendors?
With post-mailing methods, such as ACS™ and ancillary service endorsements, the business
receives change-of-address information after the Postal Service™ determines the piece is
undeliverable to the address on the mail piece. Alternatively or additionally, depending on the
service, the mail piece may be forwarded to the intended recipient’s current address. In any case,
the resulting delay could mean a missed opportunity, especially if the mailing promotes a time-
sensitive offer.
Post-mailing address updates may also prove to be costly, sometimes beyond budgeted amounts.
For example, electronic ACS notification can cost 6 cents per updated address for First-Class Mail
and 25 cents per piece for other classes of mail. It’s also important to remember that the business
has already incurred costs for the mail pieces (creative, printing, postage, etc.), regardless of
whether they were delivered or not.
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Forwarded mail presents another potential drawback. The address block contains extra characters,
creating a cluttered look which may be negatively perceived by the recipient. The mail piece may
proclaim, “We have an offer just for you,” while the implied message may be, “We have no idea
where you live.”
1. People and businesses are moving all the time. From the point a mailing list is updated until
the mail pieces are produced and delivered to the Post Office, a significant percentage of the
addresses may no longer be current. (If the process takes two weeks, as many as 2 million
U.S. addresses may change.)
2. The USPS uses different name-to-address matching rules for different address update
services. Consequently, an address change missed during the pre-mailing update, using
NCOALink or FASTforward, may be applied on the back end with ACS.
When used in tandem with a pre-mailing update, a post-mailing update should result in minimal
cost to the mailer. The reason—most of the moved addresses will be updated during the pre-
mailing phase, where costs are more predictable and, in many instances, considerably less on a
per-record basis.
Mailers who use FASTforward usually update their addresses each time a mailing is processed
through their automated system. Other mailers will want to perform a pre-mailing address update
using NCOALink in one or more of its versions.
There are no hard and fast rules for selecting a specific NCOALink service or update frequency. In
general, the greater the dependence on mail to generate sales and acquire customers, the more
thoroughly and frequently the mailing list should be updated.
Following is a recommended address update strategy for mailers who use the NCOALink service.
It’s based on the best practices outlined in the Mailers’ Technical Advisory Committee Workgroup
97 Address Quality Methodologies document, available at http://ribbs.usps.gov/bestpractices.pdf.
PRE-MAILING TACTICS
Complete an NCOALink PAF
Prior to any NCOALink® processing and once annually thereafter, the NCOALink licensee (mailer or
outside provider) must complete an NCOALink Processing Acknowledgement Form (PAF). This
form, which stems from the Privacy Act of 1974, requires the USPS to maintain records of all
entities receiving change-of-address information. (See the “Resources” section of this paper for
links to a PAF guide and the form.)
48-month NCOALink processing
Available exclusively from a Full Service NCOALink licensee, a 48-month update is performed once
or twice annually. The 48-month database contains the Postal Service’s most comprehensive
change-of-address information.
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18-month NCOALink processing
To capture changes occurring between 48-month updates, mailers should perform (or outsource)
18-month NCOALink processing as close as possible to the mail drop. Adding the ANKLink service to
the process will flag moves that may have occurred from months 19 through 48, allowing the mailer
to send these addresses to a Full Service provider for 48-month processing.
POST-MAILING TACTICS
ACS Address Update
A post-mailing address update with ACS notifies the mailer of address changes that occurred
between NCOALink runs. It may also provide updates for addresses that didn’t meet NCOALink
matching rules. Available for all classes of mail, ACS must be used with either an ancillary service
endorsement and participant code or an Intelligent Mail® barcode containing a business entity
identifier (BEI).
Ancillary Service Endorsements
The combination of NCOALink (18 and 48 month) and ACS processing will capture and apply the
vast majority of address updates to a mailing list. For the remaining “straggler” changes of address,
an ancillary service endorsement enables forwarding of the mail pieces and/or address change
notification to the mailer. The mailer may incur charges, but only for updated addresses (which
should be a minimal number at this stage).
Bring Address Changes Back In-House
If an outside provider is processing the mailing list, the mailer should make sure that address
updates are incorporated into the source database. A surprisingly large number of mailers overlook
this important step.
Most mailers find it impractical and cost prohibitive to acquire an NCOALink license. In fact, only a
relative handful of companies are licensed for 48-month NCOALink processing, given the high cost
($175,000 annually) of a Full Service license, the rigorous application process, and the very
stringent USPS® requirements for data formatting and transfers. Even the cost ($7,500 per year)
and requirements for obtaining an End User license call for careful consideration.
For the majority of mailers, a blended approach to address updating—combining some in-house
processing with outside services—makes the most sense.
The following checklists are intended to assist mailers with selecting an NCOALink service provider
and the software that contains an interface to vendor and/or USPS databases.
Recommended Criteria for NCOALink Service Providers
Link
Provides both 48-month and 18-month NCOA processing
Has flexible input file and media requirements, eliminating the need for customers to perform
costly data conversions
Offers a complete continuum of database, mailing list, and data conversion services, such as
telephone append, ZIP + 4® processing, merge/purge, presort, bar-coded mailing labels, and
inkjet files
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Ability to match processes and security features to client needs, versus forcing clients to adapt to
the provider and processes
Delivers high-quality reports that increase the usefulness and value of change-of-address
information
Provided by a vendor with an established track record of staying in sync with all USPS address
quality initiatives and, ideally, possessing a history of close collaboration with the Postal Service
and keeping mailers informed of upcoming regulatory changes
ACS TM
ANKLink
TM
NCOALink
TM
TM
SuiteLink
DPV
TM
Link TM
LACS
TM
Figure 1. USPS address quality solutions for standardizing, validating, and updating mailing lists.
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SUMMARY
The argument for mailing list address updating is compelling from a number of vantage points.
From strictly a cost perspective, mailers who religiously apply Move Update methods can
significantly reduce their UAA mail—and thus the dollars wasted on production and postage for
pieces that never get delivered.
Postage automation discounts are also at stake. Mailers who don’t meet USPS Move Update
requirements risk the loss of their presort and automation discounts. This issue will only intensify
as:
From a marketing perspective, the case for address updating is even stronger. By improving the
timeliness and predictability of each ad mailing, businesses should experience a boost in response
and sales. What was once a 1% or 2% response potentially now becomes a 3% or 4% response—
a substantial difference when applied to tens of thousands or hundreds of thousands of mail
recipients.
In contemplating potential ROI, marketing strategists should also consider the lifetime value of each
consumer who becomes a customer. Even a fractional percentage increase in the productivity of a
mailing list represents a huge windfall in sales over the long term.
Another potential beneficiary of address update technology is the mail services provider.
Lettershops and other vendors can give themselves a competitive edge by offering their customers
the opportunity to reduce UAA mail and increase the effectiveness of their marketing campaigns.
By partnering with a firm specializing in NCOALink processing, these mail services vendors can offer
their customers powerful solutions without having to make a major investment in address update
technologies.
Whether adopted by a mailer or a service provider, the commitment to an address update strategy
should be robust and long term. It should place a primary emphasis on updating addresses before
the mailing occurs, yet it must also be able to capture changes of address on the back end.
In addition to implementing a solid strategy, mailers and service providers need to carefully choose
their move update products, services, and vendors. This requires thorough research, including
verifiable comparisons of features and benefits, as well as discussions with peers to gauge real-
world performance and dependability.
RESOURCES
USPS National Customer Support Center: 800-238-3150
USPS Publications
(Click on link to access document)
Updating Address Lists Is a Smart Move (USPS Publication 363)
Link
Combined NCOA Processing Acknowledgement Form
Link
NCOA Processing Acknowledgement Form (PAF) Guide
Certification of Move Update Compliance
Move Update ROI calculator
Best Practices in Address Quality (from Mailers’ Technical Advisory Committee)
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ABOUT THE AUTHORS
Pam Corbeille-Lepel is Sales and Marketing Director at Lorton Data, a privately held company located in
Minneapolis, Minnesota. With 18 years of experience in the direct marketing industry, she consults with
businesses ranging from nonprofit organizations to Fortune 500 companies. Corbeille-Lepel began in the direct
marketing industry representing mailing software and lettershop and bindery systems. For the past 15 years,
through Lorton Data, she has provided a wide range of list management and database marketing services,
designed to help clients reach their targeted audience and improve their return on investment. Corbeille-Lepel
can be reached at Pamcl@lortondata.com.
Christopher Lien is Director of Commercial Mail Marketing for Business Objects, responsible for setting the
strategic direction of the company’s Postalsoft brand of products. Mr. Lien has been active in the mailing
industry for more than a decade. During this time, he has developed several software products utilizing Mail.dat
for electronic auditing and dynamic drop-shipment planning. He has been heavily involved in industry groups,
such as the Association for Postal Commerce, the Mailing & Fulfillment Service Association, Alliance of
Nonprofit Mailers, and the IDEAlliance, for which he currently serves as representative to the Postmaster
General’s Mailers Technical Advisory Committee.
For more information, visit the Lorton Data website at www.lortondata.com or call (651) 203-8200.
Business Objects has dual headquarters in San Jose, Calif., and Paris, France. The company’s stock is traded
on both the Nasdaq (BOBJ) and Euronext Paris (ISIN: FR0004026250 - BOB) stock exchanges. More
information about Business Objects can be found at www.businessobjects.com. To request a consultation with
®
a Postalsoft sales expert, email SalesTeamMailbox@businessobjects.com.
®
Lorton Data is a non-exclusive Full Service Provider Licensee of the United States Postal Service . Business Objects is a
non-exclusive Interface Distributor Licensee of the United States Postal Service. The following trademarks are owned by
®
the United States Postal Service : USPS, United States Postal Service, First-Class, First-Class Mail, Standard Mail, Post
Link Link ACS Link Link
Office, Postal Service, NCOA , ANK , ACS, ZIP, ZIP + 4, FASTforward, OneCode , Suite , DPV, LACS , CASS
Certified, and Intelligent Mail.
© 2007 Business Objects & Lorton Data. All rights reserved. Part # WP3109-A. AD 15.07
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