Enterprise Address Management

W H I T E PA P E R :

Update the Address.Keep the Customer.Avoid Unnecessary Costs.

MAILING EFFICIENCY AND COMMUNICATIONS INTELLIGENCE

Enterprise Address Management

www.pbinsight.com

WHITE PAPER: MAILING EFFICIENCY AND COMMUNICATIONS INTELLIGENCE

SUCCESSFUL BUSINESSES, REGARDLESS OF INDUSTRY, ARE ACUTELY AWARE OF THE IMPORTANCE OF MAINTAINING ADDRESS

ACCURACY TO RETAIN CUSTOMERS AND ENSURE QUALITY DATA. THIS AWARENESS, WHEN TRANSFORMED INTO TANGIBLE, ACTIONABLE

PROCESSES, PROMOTES CUSTOMER LOYALTY, SATISFIES REGULATORY REQUIREMENTS, INCREASES REVENUE STREAMS, ELIMINATES

MANUAL PROCESSES, AND POSITIVELY IMPACTS THE BOTTOM LINE. BY UPDATING ADDRESSES, COMPANIES KEEP THEIR CUSTOMERS

CLOSE AND AVOID COMPLIANCE HEADACHES AND FINES. IT SOUNDS SIMPLE, BUT ENSURING THAT AN ADDRESS IS NOT ONLY COMPLETE

AND CORRECT, BUT ALSO UPDATED BACK TO THE SOURCE – BE IT A DOCUMENT, DATABASE, OR ELECTRONIC STORAGE SYSTEM – CAN

BE A COMPLEX AND POTENTIALLY COSTLY UNDERTAKING. WHEN COMPANIES DISREGARD ADDRESS OR MOVE UPDATES, THEY FACE THE

POTENTIAL FOR A MYRIAD OF FINES AND A LOSS OF REVENUE BY DISCONNECTING WITH THEIR CUSTOMERS. SO, REGARDLESS OF THE

SCENARIO, COMPANIES MUST PAY – EITHER UP-FRONT FOR A SYSTEM, OR ON THE BACK-END IN THE FORM OF FORFEITED DISCOUNTS

OR POSSIBLE PENALTIES. IN THE LONG RUN, AND AS SUCCESSFUL BUSINESSES CAN ATTEST, IT IS A MUCH SMARTER BUSINESS

DECISION TO INVEST IN THE IMPLEMENTATION OF A CUSTOMER DESIGNED WORKFLOW SYSTEM TO AUTOMATE THE MOVE UPDATE

CORRECTION PROCESS, RATHER THAN RISK LOSING CUSTOMERS, PROSPECTS, OR MAILING DISCOUNTS.

THIS PITNEY BOWES BUSINESS INSIGHT WHITE PAPER EXPLAINS THE PROBLEMS SURROUNDING INACCURATE AND INCOMPLETE

ADDRESSES, THE CURRENT PROCESSES BEING USED IN THE MARKETPLACE, AND THE IMPORTANCE OF A SOLUTION THAT AUTOMATES

MOVE UPDATES AND MAKES THEM ACTIONABLE.

Update the Address. Keep the Customer. Avoid Unnecessary Costs.Enterprise Address Management

2 OVERVIEW

A Moving Target

People move. Whether across town, across the country, or

across the globe, the simple act of moving has the potential

to wreak havoc on businesses, and the connection to their

customers or prospects, regardless of size or industry. In

the United States alone, over 40 million people move each

year and, amazingly, nearly half will fail to report their move

to the post office. Each one of these moves represents a

potentially lost opportunity, revenue, or customer. Add to

that, the United States Postal Service® (USPS®) requires

companies to process mail using a Move Update method to

maintain eligibility for postal discounts.

Historically, the address update process could be

categorized as antiquated for some companies and

down-right labor intensive for others. But, the flip-side of

updating – customer churn, return mail, fines, and loss of

revenue – is just not an acceptable alternative. As the age

old proverb states, “Give a man a fish and feed him for a

day. Teach a man to fish and feed him for a lifetime.” This

adage can be applied directly to address and move updates.

If a company uses a manual process to update customer

communications based on return mail, but does not, for

whatever the reason, update the source document, they

are being given a fish. But, once the company implements

an actionable move update system, or enterprise address

management system, they learn how to fish, and are then

able to update back to the source and reap the benefits.

Another fly-in-the-ointment in the address update

process is the amount of time it takes to manually correct

an address. This manual process which, again, is based

on a piece of return mail or an Address Change Service

(ACS™) notice from the USPS, can take months to make

the required, and sometimes critical, updates. To fully

understand the true consequences of a delay in updating,

imagine the following very real-life scenarios:

• A customer with a credit card balance of $10,000 closes

the post office box where they receive their statements

• A customer with an investment account balance in excess

of $100,000 moves out of state

• The spouse or child of an important client moves out of

the family home

Each of these examples shows the potential for lost revenue,

customer churn, and compliance fines – which could have

been avoided by knowing and updating the current address

information.

Getting to the Root of the Problem

The root cause of any address problem is incomplete or

inaccurate information. While many erroneous addresses

are caused by the previously touched on customer move,

many others are a result of incorrect entry. Historically, with

the lack of a USPS sanctioned measurement system, many

companies focused on processes that qualified them for

automation discounts. One such process from the USPS,

the Coding Accuracy Support System (CASS™), attempts

to determine the full 11 digit delivery point ZIP Code™.

But, while many companies use the ZIP Code on their

mail pieces, some do not use the standardized, corrected

address, nor will they update the source database. This

unwillingness or inability to correct back to the source is

a significant contributor to many addressing problems.

This is especially true due to the required Locatable

Address Correction System (LACS™) and Delivery Point

Validation (DPV™) processes. Because of these processes,

CASS programs may not be able to continue finding

11 digit ZIP Codes on some addresses unless previous

address corrections are updated back to the source data.

In particular, LACS addresses will eventually become

undeliverable and uncorrectable by some of the USPS

change of address products when addressees move.

If an address fails to code with an 11 digit ZIP Code,

companies run the risk of losing much more than just the

automation discount. They may also lose the ability to track

the mail piece through the USPS’ Track & Confirm, and

THE ULTIMATE SOLUTION FOR THE ROOT OF ALL ADDRESS PROBLEMS IS THE IMPLEMENTATION OF AN EFFICIENTLY MANAGED ENTERPRISE ADDRESS MANAGEMENT SYSTEM

3

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the ACS data may be impaired since the mail piece will not

be scanned as often, or at all, through the USPS. Although

these non-coding addresses are the bane of every mail

room in every company, there are a number of corrective

measures that can be instituted to fix the problem.

Companies can choose a coding uplift and DPV product

or service, or they could choose to have the USPS run the

suspect addresses through the Address Element Correction

(AEC™) services.

The ultimate solution for the root of all address problems

is the implementation of an efficiently managed enterprise

address management system. This type of system could

identify addresses that lack the 11 digit ZIP Code, and

manage the external processes required to correct as many

of these incorrect or incomplete addresses as possible. In

addition, the system not only improves the deliverability

of mail, but helps the National Change of Address Link

(NCOALink ™) locate even more moves. But, once the address

is complete and correct, the $64,000 question is – how can

companies ensure that the address is current?

Obtaining the Most Current Address

While there are several USPS processes for identifying

address changes, the two most common are NCOALink and

ACS. NCOALink is a pre-mailing process that can identify

moves up to 48 months old, while ACS is used post-mailing,

and looks back 18 months, to provide data on forwarded

and returned mail pieces. In addition, ACS also includes

information on mail pieces that are undeliverable-as-

addressed (UAA), and for which no new or forwarding

address is available.

As of November 23, 2008, the USPS Move Update rules

required that each and every new address found by

NCOALink or ACS must be updated back to the source or

‘mailing list’ up to 95 days before a mailing. But, addresses

that came directly from the mail recipient within that 95

day window are exempt from the Move Update requirement.

This is critical since it allows new names to be mailed to

existing mailing lists without the need to run them through

NCOALink with each mailing. Obviously, with ACS, companies

would be wise to update their mailing lists as soon as

possible, since a portion of the 95 day window will be

consumed in the first mailing.

For companies that utilize sorting machines, the USPS

offers a process called FASTforward ™ Move Update

Notification (FFMUN). This process reads the old address,

looks for updates, and prints the new address on the mail

piece. While FFMUN data can be downloaded from the

USPS for updating lists, there is no reference information

provided that would help automatically and confidently

locate the original address record. However, FFMUN does

satisfy the Move Update requirement by printing updated

addresses on mail pieces, but it falls far short of ensuring

that address updates make it into the source record for

future customer communications.

Typically, companies who are allowed to use USPS supplied

corrections and changes would utilize a combination of

pre-mailing and post-mailing USPS and non-USPS, or

third-party, address hygiene processes and services. This

combination would represent the best possible address

quality, assuming the data generated for the update to the

source database is entered prior to the next mailing. The

following flow chart (see page 5) outlines the best practices

that will minimize UAA and maximize benefits.

4



5

A FULLY AUTOMATED MOVE UPDATE AND VERIFICATION SYSTEM WILL SAVE COMPANIES MONEY, SATISFY COMPLIANCE REQUIREMENTS, AND KEEP CUSTOMERS LOYAL AND CLOSE

Best Addressing Practices to Minimize UAA and Maximize Benefits

PRE-MAILING

POST-MAILING

11 DigitZIP Codefound?

Move found?

Move found?

New address orundeliverable

NO

NO

YES

YES

YES

USPS Process or Service

YES

YES

UNDELIVERABLE

Mailing ListCASS

Address Standardizationand Matching

Coding Uplift andDPV Correction

Mail Piece is mailedwith OneCode ACS

Address changesfor updating

NCOALink

48 month NCOALink

Proprietary Changeof Address


USPS AEC-II ACS Data from USPS


NO

3rd Party Process or Service

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Update Difficulties and Resolutions

There are certain situations where address corrections or

changes can not be immediately updated to the source,

even within an enterprise. The following two examples

represent everyday problems that may be encountered by

many companies.

• First, a company’s print and mail operation, which is

running its address hygiene processes, is located

downstream from both the mailing applications and lists.

Since the mail operation may not have direct access to

the source data, they must rely on IT or business owners

to apply the updates. This update delay has a direct and

negative impact on the benefits of obtaining and using

good address data. Furthermore, the delay has the real,

and detrimental, possibility of pushing the mailings into

non-compliance of the USPS Move Update requirements.

This non-compliance may force the company to pay

a seven cent per piece surcharge for First Class and

Standard mailings. Multiply these charges by a large

number of mailings, and the revenue impact could

be significant. To make matters worse, without a valid

process in place, the company runs the very real risk of

even greater penalties being levied by the USPS.

• Second, a company employs a mail services provider

to perform the address hygiene processes. Since these

processes are conducted out-of-house, the provider

rarely, if ever, has direct access to the company’s source

data. Therefore, the provider must rely on the company

to perform timely updates to the source data supplied by

the service provider.

There is a resolution to each of these situations. By creating

and maintaining a master address database for each job

or mailing list, the address corrections and changes, once

generated, are updated to the master database, as well as

supplied to the IT department or mail services provider.

6



If the master database is checked as a pre-mailing process,

it allows ACS data to be the sole source of change for the

address data. But, if NCOALink is used in addition to ACS,

considerably more address updates will be identified, and

the overall impact of the enterprise address management

system will be enhanced.

The question remains – why use NCOALink both pre- and

post-mailing? The answer has many facets. The 48 month

NCOALink is usually a service bureau or hosted service

offering, so many companies have privacy concerns about

releasing valid name and address data outside of their

protected firewall environment. Alternatively, companies can

choose to use an in-house 18 month pre-mailing process,

and when ACS returns nixie, or UAA, information on mail

pieces, they can then be processed through NCOALink

as an exception process to correct a high percentage of

these addresses. Now, if that does not work, a third-party

proprietary change of address can be checked. Since,

astoundingly, only about 60% of movers report their moves

to the USPS, proprietary change of address information is

often a great way to get corrections for UAA mail. In fact,

most companies concerned with providing valid name and

address data to outside services are far less concerned

about submitting invalid data since it is worthless until

corrected. The only option to accurately find the correct

information is to contact the customer, which is obtrusive

and expensive.

Restricted! No Automatic Updates Allowed

Unfortunately, automatic address updates are not available

to all businesses. Many companies, especially in the

financial and insurance industries, are legally restrained

from changing or modifying customer information without

explicit customer consent. In addition, these companies have

the added burden of ensuring compliance with a variety of

regulations issued through the Health Insurance Portability

and Accountability Act (HIPAA), the Securities and Exchange

Commission (SEC), and Red Flag fraud detection.

7To assist the restricted companies, the USPS offers an

alternate Move Update compliance method. This method,

the Legal Restraint Alternative Method, allows a company

to use NCOALink to identify moves, but does not require the

new address to be immediately used on mail pieces. Instead,

the company must institute a process that will update

the mailing list after getting the proper approvals from

the mail recipients and/or mail owners. Please note - an

application is required to take advantage of this option. To

secure consent, the application must include both proof of

the legal restraint and a well documented process showing

communication with the customer.

The quest to achieving compliance starts with requesting

and receiving explicit or implied consent from the address

owner to use the new address found in NCOALink or ACS.

The form of consent may vary depending on the industry.

Financial institutions, insurance companies, and

government agencies frequently require written consent

from the address owner. A typical consent application

generates a mailing to both the old and the new address,

informing the owner of the address change. The application

may include instructions for writing and returning a

consent letter, or may even include a letter with a business

reply envelope to expedite the approval. Frequently, and

as a proactive measure, the consent letter may include a

barcode that positively identifies the address owner. Once

received by the company, this barcode not only grants

approval, but can be scanned into the enterprise address

management system. If, on the other hand, the owner

indicates that the new address is incorrect and provides

the correct data, the updated address can be validated into

the address management system in real-time using a CASS

product with DPV.

An alternate approach allowed by some companies,

particularly non-healthcare insurance companies, is

implied consent. This type of consent entails letters sent to

both old and new addresses outlining the change of address

information. If the new address is incorrect, the owner is

asked to provide the corrections either by mail, phone,

or internet. If a reply is not received within 30 days, the

company automatically considers the new address correct

and confirmed.

In some of the above mentioned industries, the owner of

the address is not the enterprise, but its agent – particularly

insurance agents and stock brokers. If the company obtains

consent from the enterprise to use the new address, they

may, in fact, need approval from the actual address owner.

Since a single insurance company or brokerage firm may

have hundreds of thousands of address owners, the logistics

of garnering approval is extremely challenging, to say the

least. This approval process can easily contain multiple

steps, including:

• Identifying the address owner

• Confirming the address change

• Communicating the change

• Receiving approval of the address owner

• Updating the address back to the source

In a perfect world, managing address owner consent would

be done using a web application that provides access

to a variety of users. This web portal could also supply

valuable information to address owners, such as address

deliverability and what percentage of these addresses move

in a given year.

The following flow chart (see page 8) shows the addition

of the master address database and its pre-mailing process

matcher. In addition, it outlines where the address owner

consent application fits into the enterprise address

management workflow.

AN ENTERPRISE ADDRESS MANAGEMENT SYSTEM CAN ALSO BE USED BY A SERVICE PROVIDER TO HELP MANAGE THE ADDRESS QUALITY OF ITS CUSTOMERS

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8



Best Addressing Practices with Master Address Database and Pre-mailing Matcher

PRE-MAILING

POST-MAILING


Move found?

Move found?

New address orundeliverable

NO

NO

YES

MOVES

YES

USPS Process or Service

YES

YES

UNDELIVERABLE

Mailing ListCASS

Address Standardizationand Matching

Coding Uplift andDPV Correction

EAM Master AddressDatabase Matcher

RecipientConsent

Address OwnerConsent

(legally restrained)

Address changesfor updating

NCOALink

48 month NCOALink

Proprietary Changeof Address


Mail Piece is mailedwith OneCode ACS

USPS AEC-II

ACS Data from USPS


NO

3rd Party Process or Service

Master AddressDatabase

9

AURA SOFTWARE HELPS COMPANIES ENSURE THAT ADDRESS CHANGES ARE HANDLED THROUGH A CONSISTENT AND DOCUMENTED PROCESS THAT COMPLIES WITH INDUSTRY STANDARDS AND REGULATIONS

Teach a Man to Fish

The solution to many, if not all, of the mentioned problems

lie in three previously mentioned words – enterprise

address management. Just as teaching a man to fish will

feed him for a lifetime, implementing a fully automated

move update and verification system will save companies

money, satisfy compliance requirements, and keep

customers loyal and close.

A successful solution should be plugged into the flow of

customer data after it as been processed through USPS, in-

house, and/or third-party address cleansing, verification, and

update tools. The address corrections returned from these

tools will drive a workflow that will ultimately update the

address back to the source. Of course, the particular steps

in the workflow will vary with the needs of the customer,

vertical, and possibly even change type. An enterprise

address management system can be used by companies

to manage their own address quality, or used by a service

provider to help manage the address quality of its customers.

Depending on the specific vertical, a solution must interact

with two different parties – addressees and address owners.

The addressee must be the source of most address change

information, or they must provide consent to use the

changes identified by third-parties – including the USPS.

Since the consent may take many forms, an effective

solution need not include the actual consent system, but it

must output the information to drive the consent process,

as well as manage the resulting consent events.

The address owner must approve all changes to addresses

for which their company is responsible. In many cases,

customer consent alone is not adequate for new address

usage - it also requires address owner approval. This is

especially true for financial institutions dealing with

securities, where the address owner might be a broker, and

for insurance companies, where the owner may be an agent

or group policy holder.

When an address change is identified that can not be

used or updated automatically, the solution queues it

for customer consent, if needed. If customer consent is

not needed, or if consent has been received by action

or inaction, the address is then slated for review by the

address owner. An email notification informs the address

owner that a change is awaiting their review. At this point,

an easy to use system allows the address owner to review,

approve, reject, and/or comment on this alert – eliminating

the need for time consuming, resource draining, manual

processes.

An approved address change is queued up for updating

back to the source system, either via batch export or direct

connection to the database. If rejected, the address owner

would be able to initiate other processes, such as a call to

the customer for updated information.

The final piece of any successful update solution is the

ability to provide snapshot reports on the status of in-

process data corrections and notifications. These types of

reports enable issues to be escalated, when necessary, and

corrected in a timely fashion. Summary reports are also a

critical component, displaying the level of customer data

quality so that process problems can be easily identified

and resolved.

The Aura of Success

Pitney Bowes Business Insight understands addresses, move

updates, compliance, and just about everything related to

addressing mail. So, it is easy to understand why we are the

experts when it comes to building a solution to automate

the cumbersome, manual, spreadsheet intensive process of

correcting customer addresses.

To remain on the cutting edge, and in anticipation of the

USPS effort to redefine and tighten their Move Update

rules, we began developing an actionable solution. Given

our knowledge of both the industry and the USPS, we

www.pbinsight.com

10



knew that it was paramount to develop a tool that enabled

our customers to take the data returned from NCOA and

ACS, and make it actionable. Enter Aura™! Our Pitney

Bowes Business Insight Aura software is designed to help

companies ensure that address changes are handled

through a consistent and documented process that

maintains the most current contact information while

complying with industry standards and regulations. With

Aura, companies will:

• Close the loop on enterprise address management

• Reduce return mail

• Enhance mailing efficiency processes

• Improve the security and confidentiality of mailed

communications

• Preserve postage discounts by meeting new USPS

requirements

• Ensure industry and USPS regulatory compliance

• Reduce inbound customer service calls

• Identify potential up-sell opportunities

• Provide a better customer experience and improve

customer satisfaction

Update the Address. Keep the Customer. Avoid Unnecessary Costs.

When it comes right down to it, companies strive to

achieve these three basic objectives. As this white paper

has demonstrated, by implementing a successful, proven,

actionable move update system, companies drastically

improve their customer data. This core data improvement

facilitates a positive domino effect enabling companies

to retain customers and keep them close, while avoiding

costly compliance fines and protecting valuable postage

discounts.

To learn more about the Pitney Bowes Business Insight

enterprise address management solutions that ensure

address accuracy and make move updates actionable,

contact us today.

11

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© 2010 Pitney Bowes Software, Inc. All rights reserved.Pitney Bowes Business Insight is a division of Pitney Bowes Software Inc. The Pitney Bowes logo is a registered trademark of Pitney Bowes Inc. Aura is a protected trademarks of Pitney Bowes Software Inc. All other brand names and trademarks are the property of their respective owners.

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Enterprise Address Management

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