DPV™ — Disadvantage or Opportunity?
The months leading up to the yearly August 1 CASS™ cycle implementation are always a busy and anxious time for our customers deploying the new CASS updates. This year is no exception, especially with the DPV and LACS mandates for jobs beginning on August 1. These new USPS® mandates have many customers focusing on the inherent coding percentage impacts and operational considerations.
Opportunities Through Failure!
However, with a higher standard of address quality in place to qualify for postal discounts, some companies are considering the opportunities presented by deliverable address failures. That's right, opportunities through failure!
In other words, if an address does not DPV confirm through the CASS process, it could be interpreted that the USPS specifically determines that the address is not deliverable.
With another threshold of address quality in place, namely the DPV data source, one could argue that this statement is now more definitive. Loss of work share discounts for this address is directly related to the expected handling, forwarding and potential return cost by the USPS.
Examine Costs Associated With Failed Communications
If the USPS is loading an additional four, five, or even six cents in anticipation of handling improperly addressed mail, many companies continue to examine their enterprise costs associated with these failed customer communications.
While the percentage of returned mail from non-DPV confirmed addresses will vary by company and location, 15% may be used for planning purposes.
For example, a customer with a mailing volume of 100 million pieces a year and a coding rate of 95%, will be, after August 1, mailing 5 million pieces a year that are not DPV confirmed. Aside from the loss of deeper postal discounts which, at a five cent loss will be $250,000 a year, companies may continue to see 750,000 pieces (15% of 5 million) a year returned as a result of poor addresses.
Don't Forget COBA
Companies may also determine the cost of bad addresses (COBA), which generally takes into consideration the impacts of failed customer communications. These impacts may range from $3 to over $10. For the above example, the COBA would translate to between $2.25 and $7.5 million a year.
With these numbers in mind, and with increased visibility to these addressing problems, progressive companies may consider upgrading their technology and business processes to resolve these addresses and improve customer communications.
Group 1's Methodology
When Group 1 Software works with customers on address quality assessments, the methodology for recommendations used are:
- Optimization of existing processes
- Use of automated exception processing technologies to uplift and confirm previously failed addresses
- Use of research tools, such as AEC II™ from the USPS, research approaches, or alternative means of customer contact, for remaining exceptions
- Updating of all address corrections, thereby closing the loop
Put Us to Work for You
Contact Group 1 Software today at info@g1.com or call 888-413-6763 to discuss the proper analysis and approach to meet your needs and maximize opportunities for improved customer communications and reduced operational costs.