1. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
Reduce Your Return Mail by One Third!
National Postal Forum
Nashville TN — March 20–23, 2005
Address Management
Jan Caldwell, Address Management
Sharon Harrison, SBC
Liz Weber, Capital One 1

2. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
ADDRESS QUALITY OPPORTUNITIES
Customer Contact with Business
Customer Address Changes
Business Generates Mail
Business Enters Mail
USPS Accepts Mail
USPS Processes Mail
USPS Delivers Mail 2

3. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
Reduce Your Return Mail by One Third!
Address Management
Sharon Harrison, SBC 1

4. REDUCE YOU RETURNED MAIL BY ONE THIRD
SBC COMPANY OVERVIEW
SBC - Global Telecommunications Company
Mailing 30M+ Customer Bills each month
Two Mail Manufacturing Facilities
West Sacramento & Houston
Annual USPS Postage from SBC = 125M+

5. QUALITY ADDRESSING GOALS
REDUCE YOU RETURNED MAIL BY ONE THIRD
QUALITY ADDRESSING GOALS
Reduce undeliverable-as-addressed (UAA) mail to ensure customer bills are delivered accurately & timely!
Ensure bill mailing address is compliant to USPS addressing standards to reduce cost and improve deliverability.

6. REDUCE YOU RETURNED MAIL BY ONE THIRD
RESOLVING THE PROBLEM
SBC Quality Studies defined:
Need to get the correct address at the front-end of the process!
Improve 30% of addresses during initial capture on front-end ordering validation system using CASS/DPV (USPS certified systems)
Coding Accuracy Support Systems
Delivery Point Validation

7. REDUCE YOU RETURNED MAIL BY ONE THIRD
DEFINED OPPORTUNITY
Reduce calls to/from business offices
Reduce calls to/from collection offices
Reduce mailing (postage, material, production) costs for products mailed
Improve postage discounts on address match
Reduce cost for returns managed
Improve cash flow
Meet USPS address standards/requirements

8. ADDRESS IMPROVEMENT STRATEGY/ PROCESS
REDUCE YOU RETURNED MAIL BY ONE THIRD
ADDRESS IMPROVEMENT STRATEGY/ PROCESS
Track the amount of returned mail received
Determine average return rate for industry
Identify percentage match rate for CASS
Obtain support from company Quality Teams
Evaluate reasons for mail returned using internal sources/USPS data

9. ADDRESS IMPROVEMENT STRATEGY/ PROCESS
REDUCE YOU RETURNED MAIL BY ONE THIRD
ADDRESS IMPROVEMENT STRATEGY/ PROCESS
Perform follow-up study (90 days later) to evaluate total business impact
Document customer impact (disconnects, additional calls, loss of customers, etc.)
Identify business cost/savings with reduced calls, customer impacts, mailing costs, etc.
Identify solutions for incomplete/inaccurate addressing with front-end validation

10. ADDRESS IMPROVEMENT STRATEGY/ PROCESS
REDUCE YOU RETURNED MAIL BY ONE THIRD
ADDRESS IMPROVEMENT STRATEGY/ PROCESS
Evaluate address fields/lengths to ensure space to support validation results
Evaluate technology solutions and identify potential cost
Identify business savings opportunity
Obtain Executive Management and Financial Teams support to evaluate business opportunities and savings to approve plan

11. ADDRESS IMPROVEMENT STRATEGY/ PROCESS
REDUCE YOU RETURNED MAIL BY ONE THIRD
ADDRESS IMPROVEMENT STRATEGY/ PROCESS
Develop a technology model for validating address data - ensure override capability for new addresses not yet defined
Ensure representatives are trained to ensure optimal performance of tool for deployment
Evaluate performance once deployed to ensure returned mail reductions

12. CHALLENGES REDUCE YOU RETURNED MAIL BY ONE THIRD
Multiple organizations impacted across SBC
Size and scope of SBC systems to modify field length changes
CASS/DPV functionality not separated
Ordering system screen limitations
Multiple legacy systems/applications with non-centralized customer database and data feeds
Interfacing with outsourced systems
New/emerging systems

13. MEASURING SUCCESS REDUCE YOU RETURNED MAIL BY ONE THIRD
Returned mail volumes - reduced over 30%
Improvements in CASS matching
Reduction of mailed pieces
Reduced customer calls & complaints

14. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
Capital One, USPS, and ACS
Change Service Requested – Option 2
Address Management
Liz Weber, Capital One 1

15. CHANGE SERVICE REQUESTED – OPTION 2
Reduce Your Return Mail
By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
Capital One began using Change Service Requested in Sept ’03 when we entered into an NSA with the USPS
Due to our large 1st class volumes, Capital One has proportionately large return mail volumes
Without the Change Service Requested endorsement 1st class UAA pieces are required to be physically returned to the mail owner
Prior to the NSA we have always captured our physical returned pieces
Continue…

16. CHANGE SERVICE REQUESTED – OPTION 2
Reduce Your Return Mail
By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
Change Service Requested – Option 2:
This endorsement is an indicator to the USPS to capture the mailpiece return information electronically
Thus allowing for the USPS to destroy those physical mailpieces as opposed to transporting them back to Capital One
If it is a COA record the mailpiece is forwarded to the new address on file
An ACS COA notice is provided back to Capital One with the new address

17. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
We tested into Change Service Requested prior to the full implementation of the NSA
Initial testing showed electronic return rates lower than what was expected
Capital One partnered with the USPS to diagnose potential causes
The USPS created training documentation for the field to ensure proper handling of all Capital One 1st class return mail
Continue…

18. Electronic Return Percentages moved from 60% to 85%
CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
Capital One created internal training documentation around the production elements to ensure proper formatting on all our 1st class mailpieces
Additional testing performed with an adapted endorsement to improve electronic return percentages
Mutual reporting shared on a monthly basis identified differences in capturing the return percentages
Electronic Return Percentages moved from 60% to 85%

19. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
Return mail volumes declined significantly from ’03 to ’04 despite an initial spike in return volumes in early ‘04
Early ’04 testing with an adapted endorsement failed, which initially increased our physical return mail volumes
Even with that increase in return mail we still achieved an overall decrease in the amount of mail being returned
Continue…

20. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
COA Records updates account for much of that decrease
Prior to our implementation of ACS we did not have insight into the mail which was forwarded
With this implementation, COA information is sent to Capital One on a daily basis and our system is updated in real time
This allows us to make the next contact with that potential customer in a more timely manner

21. There is a wealth of information when you have access to the COA data…..
Return Mail 2004
*Return with COA data indexed to 100

22. ….as well there is a significant reduction in postage spend when applied appropriately.
Return Mail Postage Spend Comparison
*2003 data indexed to 100

23. In addition to mailing more efficiently we have achieved other savings
CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
In addition to mailing more efficiently we have achieved other savings
The returned physical pieces sent to our return mail supplier has decreased substantially, creating an operational savings of $1MM
We have been able to use this data to create a suppression strategy based on the nixie codes received thus creating additional savings
Continue…

24. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
Additional benefits:
Real time data - A file is pulled on a daily basis and loaded into a Capital One database
Fresh address data
Additional analysis opportunities

25. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
The implementation of ACS has been mutually beneficial to the USPS and Capital One
Partnering with the USPS early on in the process allowed for a successful rollout
Monitoring performance on a monthly basis, has steadily increased performance
Savings have been realized by Capital One through the use of the data
Continue…

26. CAPITAL ONE, USPS, AND ACS
CHANGE SERVICE REQUESTED – OPTION 2
The data has also allowed Capital One to invest postage $ more efficiently
The USPS has been able to cut transportation costs by not having to physically return those UAA mailpieces

27. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
Questions
Customer Care:
Address Management 1

28. Reduce Your Return Mail By One Third
NPF – March 2005
Jan Caldwell, Sharon Harrison, & Liz Webber
Thank You!
Address Management 1