Can you put a cost on bad data? The U.S. Postal Service (USPS) can.
The USPS reported that it spent $1.8 billion dollars processing undeliverable as addressed mail in 2001. The main culprit was incorrect and outdated addresses on business-to-consumer mail. Since this kind of mail accounted for 80% of the mail stream last year, the USPS is working with companies to clean up corporate mailing lists. Their goal is to reduce undeliverable as addressed mail by 50% by 2010, and they hope to achieve this through new USPS technology, education and policy change. Even companies that don't do a lot of mailing could potentially get help with their data quality initiatives.
The USPS already develops address data quality tools with an important feature: they are integrated with the national change of address (NCOA) database. If a person has moved and filed a "change of address form" with the USPS, that address information stays in the NCOA database for 48 months. If a company has a person's old address, they can run it through NCOA-integrated software and get the new address. This process is required on a regular basis for companies to get bulk mail rates, but companies could also follow this process to improve customer data quality.
This valuable NCOA database is integrated into software products, but is highly encrypted, explained Charles Bravo, senior vice president of intelligent mail and address quality with the USPS. The USPS software also uses "very secure algorithms with patents pending," which ensures that companies will only get the new address if they supply the correct old address, Bravo said. The USPS carefully controls access to this software, officially certifying companies before agreeing to license them the tool. Certification entails a detailed application process, including a review of internal systems and security, which is why companies often use mailing bureaus or other providers to manage their address quality services.
A new USPS product, slated for release later this year, will help improve the process of database updates. The new software is called "one code ACS" and represents a new level of efficiency, Bravo said. One code ACS will use a new routing barcode to identify and track the delivery of mail. With the new system, if an address on a piece of mail is outdated, but a new address is on file in the NCOA list, the USPS will automatically reroute the mail to the correct address. Then, the system will immediately electronically update the certified mailer with the correct address.
"For a mailer, it will be a very powerful tool," Bravo said. "They will know in near real time if an address is wrong, and they'll be notified electronically so they can update their database."
Further supporting their goal of reducing undeliverable mail, the USPS is also reaching out to the business community to educate companies about the value of maintaining accurate mailing lists. Bravo and his staff regularly attend conferences and related events to spread knowledge about the technologies and processes available to scrub mailing lists. The USPS will also be examining its mailing policies and is considering a "mailing list certification" so that companies can make better decisions about purchased mailing lists, Bravo said. In short, expect to hear more from the USPS over the coming years and be ready for potential changes in postal requirements.
The benefits of accurate addresses
Correct addresses are obviously important for direct mail campaigns, but are also used as key identifiers during customer data integration (CDI) projects. Companies often use addresses to match customers across databases, as this can be more reliable than trying to identify people by name.
Correct address data also supports the much sought after 360-degree view of the customer, said Jeffrey George, vice president with Harte-Hanks Inc. a marketing company and licensed USPS service provider based in San Antonio.
If an old address is in a customer database and a new address appears in the system, potentially with a new name due to marriage, a company could easily mistake the records for two different people. This causes a host of problems and expenses, George said.
"You don't have a true picture of their 'spend,' you don't have a clear picture of the number of customers you have, you don't know spend per person … all of these things get lost when you don't have a 360 view of the customer," George said.