® 11 The ROI of Great Address Quality National Postal Forum March 17–20, 2013 Edward Wanta: Product Information Specialist United States Postal Service ® John Leininger: Professor of Graphic Communications Department of Graphic Communications, Clemson University

® 22 Overview  What is a quality address  How address validation tools can help  Address validation scenarios  Keeping up with your customers  ROI of Address Quality

® 33 Great Addressing Is Important! A quality address helps:  Acquire customers  Retain existing customers  Increase response rate  Keep postage costs in check

® 44 Why Address Validation Matters  Address Validation is one of the key components to your mailing process  Addresses that do not validate are at risk of non-delivery  Databases go “stale” over time without continually updating the information  There are many reasons an address can fail. You need to ensure they are: Complete Correct Current

® 55 Can You Recognize a Bad Address?

® 66 Total Address Quality Update Standardize Validate CASS Certified ™ LACS Link ® / DPV ® Suite Link ® AEC / AECII ® NCOA Link ® ANK Link ® ACS TM

® 77 Update Standardize Validate CASS Certified ™ LACS Link ® / DPV ® Suite Link ® AEC / AECII ® NCOA Link ® ANK Link ® ACS TM Products to Use to Achieve Quality Addressing

® 88 What is a Quality Address? A quality address is defined when: All necessary elements are complete and correct… Pre-directional Primary address number Street name Street suffix Post-directional Secondary identifier Secondary number City State ZIP + 4 ® code

® 99 What Is A Standardized Address? Address elements are printed on envelopes in standard format:  Format all lines of the address with a uniform left margin  Uppercase letters are preferred on all lines of the address block  Fully spell out or abbreviate words using USPS ® standard abbreviations ribbs.usps.gov  Publication 28, Postal Addressing Standards

® 10 Address Standardization Does Help  There are many CASS Certified™ tools; each is unique with different strengths  Evaluate what’s available and choose which best fits your needs

® 11 Update Standardize Validate CASS Certified ™ LACS Link ® / DPV ® Suite Link ® AEC / AECII ® NCOA Link ® ANK Link ® ACS TM Products to Use to Achieve Quality Addressing

® 12 DPV ® Product  Confirms the existence of a deliverable address  Identifies a commercial mail receiving agency  Improves address assignments  Helps to reduce UAA Is 249 High St in ZIP Code™ a valid address? Yes or No

® 13 Can You Recognize A Bad Address?

® 14 Common Scenarios

® 15 Scenario: Precise Match with valid DPV ® Return Code 31 A precise match is ideal 31 TRUE Be aware that there are multiple scenarios that have a return code of 31, not all ideal

® 16 Scenario: Precise CASS™ match, invalid DPV ® Return Code 31  This occurs when the address is within a valid ZIP + 4 ® range BUT the street number doesn’t exist  Precise CASS match with invalid DPV cause return code 31, Address Exists fails 31 FALSE

® 17 Scenario: Non Deliverable Address, ALSO - Return Code 31 In cases where there is a known address in the system, but no mail is accepted Example: a warehouse with no mail receptacle ND FALSE Just because it shows up on a Google Map doesn’t mean it’s a deliverable address.

® 18 Scenario: Default Match Return Code 32 Address requires additional information for a precise match Notice the Suite column. Data is not contiguous in high rises.

® 19 Scenario: Multiple Match, Insufficient Information, Return Code 22 This scenario occurs when there are address elements missing (such as Street versus Avenue)

® 20 Scenario: No Address Found Return Code 21  This scenario occurs when the address is not found and there is no city/state/ZIP Code™ match  A CASS™ engine will try to match, but match may not be correct

® 21 LACS Link® Product  Provides a database of municipality-introduced address changes  The data is provided by USPS ® through the LACS Link product Conversions come into the database from Postal carriers and municipalities  Updating the addresses using LACS Link data ensures deliverability and prevents further UAA mail

® 22 Scenario: LACS Conversion  LACS stands for Locatable Address Conversion System  It reassigns rural addresses to a more friendly format that is more easily accessible by emergency services Example: RR 2 Box 317 Beaver Falls, PA Becomes Halas Ln Beaver Falls, PA

® 23 Scenario: LACS conversion LACS also provides updated rural addresses when they expand an address range - usually because they have run out of numbers - and reassigns addresses within that area. Example: Forman Rd Polson, MT Becomes Forman Rd Polson, MT

® 24 Suite Link® Product  Improves address assignments to business addresses by adding known secondary (suite) numbers  Provided a business name and an associated ZIP + 4 ® coded address matches to a high-rise default, the Suite Link process will return the appropriate suite number when available

® 25 Physical Address UAA Missing Apt or Ste Number Incorrect Number Incorrect Recipient Missing Number Missing RR or Box Number Incorrect Street Name ACME PRODUCTS 4759 WESTERN ST NEW YORK NY CARL SHULER 1414 LAKE ST APT CHICAGO IL CARL SHULER 1914 LAKE ST APT 3A CHICAGO IL CARL BROWN 1414 LAKE ST APT CHICAGO IL CARL SHULER LAKE ST APT 3A CHICAGO IL CARL SHULER PO BOX CHICAGO IL Millions of Pieces CARL SHULER 1414 LARK ST APT 3A CHICAGO IL Common Address Quality Problems Millions of Pieces

® 26 Update Standardize Validate CASS Certified ™ LACS Link ® / DPV ® Suite Link ® AEC / AECII ® NCOA Link ® ANK Link ® ACS TM Products to Use to Achieve Quality Addressing

® 27 USPS ® has determined that up to 23% of all mail contains addressing errors. Common errors: Addressee moved …………………………………2.4% Directional/Suffix missing ……………………… % Street name/Number incorrect/invalid ……… % ZIP Code™/City incorrect …………………………4.8% Apt number/Rural Box number missing …………4.5% Total23.6% USPS—AEC and AEC II ® User Guide, p. 3

® 28 Bad Addressing Issues  Inconsistent filling of fields  Missing gender indicator  Trailing space after name or address  Misspelled words/Improper abbreviations  Missing or wrong street, directional, prefix, suffix  City, state, or ZIP Code™ missing or in conflict  Missing or incorrect secondary address information  Incorrect company legal name or reference name  Dual names  Extraneous information in name field

® 29 Move Update describes the process of periodically matching a mailer’s address records with customer- filed Change-of-Address orders received and maintained by the Postal Service™ Move Update = Fewer Forwarded and Returned Mailpieces What is Move Update?

® 30  Presorted or Automation discounts for First-Class Mail ®  Standard Mail ® discounts  Addresses on mailpieces updated using an approved method within 95 days prior to the mailing date  First-Class Mail or Standard Mail mailpieces with exceptional or an alternative address format are not required to meet Move Update requirements (Note: mail is not forwarded) Or Current Resident Postal Customer Who Must Use Move Update?

® 31 Four Pre-Approved Methods:  Ancillary Service Endorsements  ACS™, OneCode ACS ®, and Full-Service ACS  NCOA Link®  NCOA Link® for Multiline Optical Character Readers Move Update Methods

® 32  Mailing with passing score of 70% (tolerance 30%) or higher will pass verification  Mailing with score below 70% will fail verification if there are also more than 5 pieces with COAs not updated  Only failed pieces above tolerance pay assessment If 40% of COAs not-updated Assessment applied to 10% (= ) of mailing  Assessment = $0.07 per piece at acceptance Both First-Class Mail ® and Standard Mail ® [ Failed COAS Total COAs - 30 % ] x 7¢ x (pieces in mailing) Move Update Scoring

® 33 Mailing Size: 100,000Postage Postage 5-Digit Auto ($0.242)$24,200 Assessment for failed percent above tolerance $0.07 per piece 40% of COAs not updated Pieces assessed: 10,000 (10% = 40 – 30 tolerance) Assessment: 10,000 x $0.07 =$700 + $24,200 = $24,900 80% of COAs not updated Pieces assessed: 50,000 (50% = 80 – 30 tolerance) Assessment: 50,000 x $0.07 =$3,500 + $24,200 = $27,700 Move Update Cost Breakdown

® 34  A pr ing Move Update method leveraging USPS ® provided data  Data delivery from USPS to certified licensees  Four levels of usage for certified licensees: End User Mailer (18 months of data updated monthly) Mail Processing Equipment (MLOCR)(18 months of data updated weekly) Limited Service Provider (18 months of data updated weekly) Full Service Provider (48 months of data updated weekly) NCOA Link® Service

® 35 AEC & AEC II ® Service  AEC provides a crucial “last resort” approach to stubborn addresses USPS ® service to help correct addresses that CASS Certified ™ software cannot fix  AEC II expands AEC processing Leverages Delivery Force Knowledge ™ for addresses that AEC cannot correct

® 36 AEC Processing Flow

® 37  CASS™ Report 3553 DPV ® LACS Link® Suite Link® Total ZIP + 4 ® Coding  CASS Summary Report  AEC Summary Reports  NCOA Link® Summary Report Documentation From List Vendor

® 38  Reduce postage costs  Reduce printing costs Example: 10,000 piece mailing X 5% (average UAA rate) equals 500 mailpieces with errors Saved postage at Standard Mail ® rate $0.29 X 500 = $145 Saved printing at $0.95/folded sheet X 500 = $475 Savings = Value of Correcting Your Data $620* That is what you saved, but what have you lost? *Money saved in postage and printing by not printing and mailing to bad addresses.

® 39 The Real Money is in Fixing the UAAs From previous example of 500 UAAs  Use AEC = $10.00 (there is a min., but you can group lists) $20.00/1,000 typically fixes 32% of UAAs 500 x 0.32 = fixed 160 now only 340 UAAs  Use AEC II ® = $ $0.30/resolution typically fixes 80% of UAAs 340 x 0.80 = fixed 272 now only 68 UAAs

® 40 The Real Money is in Fixing the UAAs From previous example of 500 UAAs  Upload remaining UAAs to List Company =$17.00 $0.25 x 68 fixing 50% of UAAs 68 x 0.50 = fixed 34 now only 34 UAAs remain Total spent fixing 466 records = A short demonstration about using a list company to correct addresses older than 4 years. (USPS ® NCOA Link® Full Service License database only goes back 4 years) $129.00

® 41 From previous example of 500 UAAs  466 records fixed for $  If the response rate was 5% and the average value of a sale was $150  466 delivered pieces x 0.05 response = 23 sales  $150 per average sale = $3,450 in sales  For $129.00, you generated $3,450 in revenue Would you rather save $620 by not mailing to those 500 UAAs or make $3,450 in potential revenue from those corrected addresses? This is a 1 to 26.7 ratio. If you mark it up 100%, it is a 1 to ratio The Real Money is in Fixing the UAAs

® 42 Other Tools That Can Fix UAA Addresses  There are tools available beyond USPS ® -supplied services that can help fix bad addresses  NCOA Link® Full Service License contains the last four years COA (change-of-address) information  There are commercially available services that can track customers’ moves going back 40 years  This brings up another really good point, when should you use an “Ancillary Service Endorsements” or ACS™.

® 43 Results from Mailing Research Projects On three separate mailing research projects at Clemson:  We average 5% on NCOA Link® corrections  We could fix all but one or two addresses that failed to pass NCOA Link in each mailing  When we included an “Ancillary Service Endorsement” on the mailpiece, we received between 2% and 3% back

® 44  Two reasons to use “Ancillary Service Endorsements” or ACS™ Address changes taking place since the last NCOA Link® update Names that should be on the NCOA Link database but aren’t because:  recipient failed to file a change of address  it has been over 4 years so the address has be dropped from the NCOA Link list  When should you use “Ancillary Service Endorsements” or ACS? The first time you use a list it will help identify name/address changes over 4 years old in the list (Note: no new address provided) Names drop off the NCOA Link list all of the time, therefore, you should make this a regular practice When to use “Ancillary Service Endorsements” (from a non-USPS perspective)

® 45 Demonstration of Proprietary Commercial COA Services

® 46 Let’s Talk About Data What type of data can you work with? The answer is determined by how clean the data is to start with. Data to consider:  Customer’s records  List company’s demographic data  Listserv marketing analytics  Work with demographic, psychographic, and geographic indicators to determine the capacity to buy and the propensity to buy  Relational data from outside sources

® 47 It is all about Database Management! Your company needs a plan to update the master database so you do not lose the NCOA Link® information at the end of the 4 year retention period. Depending on the customer base, the process may be less structured. But it should always be done! 47

® 48  The quality of your address data directly affects the deliverability of your mail!  USPS ® provides an extensive suite of Address Quality products and services; check out ribbs.usps.gov.  USPS is committed to continuous address hygiene improvements to enhance the value of mail.  Small efforts can bring big results! Summary

® 49 DPV ® –Identify inaccurate or incomplete addresses LACS Link® –Locatable Address Conversion System. Automated process of obtaining new address when the address has been changed by the local planning authority or building management Suite Link® –Improves address assignments to business addresses by adding known secondary (suite) numbers AEC –Address Element Correction. Corrects and standardizes address elements on the worst addresses not resolved by CASS™ NCOA Link® –National Change of Address. Aids mailers in identifying address changes before mail enters the mail stream ANK Link® –Attempted Not Known. For NCOA Link® limited service providers and end user mailers. ANK Link® is an enhancement to the existing 18 month NCOA Link product. ANK Link provides an additional 30 months of COA information. ACS™ –Cost effective means of obtaining accurate change of address information UAA –Undeliverable As Addressed Glossary

® Sunday What You Need to Know about Unique Address Types / Non-Physical Address Jim Wilson/Adam Collinson/Michael Tate – Period 1, 12 – 1 pm GSA and Addressing (Rules & Recommendations) Angela Lawson/Adam Collinson/Derrick Miliner – Period 4, 3:45 – 4:45 pm Monday Keeping it Simple: ACS Services – It’s All in the Service Type ID Lisa West – Period 5, 10:30 – 11:45 am Secure Destruction – Peace of Mind Lisa West/Tom Day – Period 8, 4:30 – 5:30 pm Tuesday The ROI of Great Address Quality Ed Wanta/Dr. John M. Leininger – Period 10, 9:30 – 10:45 am Understanding the Differences in the Change of Address Programs Jim Wilson/Michael Tate – Period 13, 3:15 – 4:15 pm Your Software is Talking, Are You Listening? Angela Lawson/Chris Lien – Period 13, 3:15 – 4:15 pm Peer-To-Peer Roundtables Lisa West/Angela Lawson – Period 14, 4:30 – 6:00 pm Speaker Schedule Wednesday ROI is Your Tool to Show the Value You Offer Dr. John M. Leininger – Period 16, 9:30 – 10:30 am

® 51 Questions?

® Contact Information Dr. John Leininger Professor Department of Graphic Communications Clemson University G-01 Tillman Hall Clemson, SC (O) (F) Edward F. Wanta Product Information Specialist United States Postal Service National Customer Support Center 225 N Humphreys Blvd Ste 501 Memphis, TN (O)