The Ethics of NCOA Move Update®

Scenario – I own a mailing service and in preparation for the new Move Update regulations coming in November of 2008, I have just signed up for an ‘all you can eat’ NCOALink® 18 month service (NCOA-18), or maybe I have even invested to get my own USPS® NCOALink® license.

Now, as a business owner, I realize the more clients I can run through NCOA-18, with its fixed costs, the more profit I can make.   On the other hand, many of my clients have historically been using the 48 month version of NCOALink (NCOA-48), because it catches more moves and cost only fractionally more than the NCOA-18 service.

As a business owner, do I arbitrarily decide to run all new orders through NCOA-18, justifying it by saying I am sure all the client wants is to secure the postal discount…they are not really that interested in catching the maximum number of moves?   Do I ask the client in such a way that steers them to the answer I want, i.e. “Your primary interest is in saving money and securing the postal discounts, correct?” Or, do I sit down with the client and go over the pros and cons of both NCOA-48 and NCOA-18 and help the client make an informed decision, thereby setting up client specific guidelines for when a file would be processed through NCOA-18 and when it would go to NCOA-48?

Some providers suggest to a client that they run their list through NCOA-48 the first time and NCOA-18 after that.  On the surface, this sounds logical, but if you don’t ask the client what percent of their file is changing/updated every month and how old are the input sources being used to update the file, then this advice may be provided erroneously.

That fact is, a third more moves are caught by NCOA-48 than NCOA-18, and as we all know, the USPS created the Move Update regulations to reduce the amount of Undeliverable As Addressed mail.

On a recent Alaskan adventure with my family I discovered that there is complex data science involved in the Alaskan salmon fishery.  The Alaska Department of Fish and Game use technology, such as sonar monitoring systems and advanced statistical models, to monitor commercial and sport catch as they track salmon migration into the various river systems to complete their natural journey.  The most interesting part is how this statistical research is utilized to communicate fish location to the fishing public through multi-channel communication methods; email alerts, websites, printed materials, broadcasts on TV and radio, now even automated text messages on the streams!  I would consider this a great example of real-time event based marketing.  As with any ecosystem, opportunistic bears also go where the fish are, without the need for technology; they just wait patiently for the fishermen to show up. We have unintentionally created data-enabled bears!

Alaska is everything I expected and more.  The grandeur of the mountains, rivers and sea, the vastness of the wilderness and the opportunity to respectfully interact with wildlife in this unbelievable setting is only enhanced by the data based science that protects this priceless renewable resource. 

Marketing has undergone a paradigm shift. New tools, new technologies, new approaches and new data have opened marketers’ eyes that there is indeed a cause and effect and predictability in customer’s actions. It is discernable in the marketing data, as Davenport notes: “Most business functions, even those, like marketing, that have historically depended on art rather than science—can be improved with sophisticated quantitative techniques.” ¹ In a paper, “CRM from ‘art to science’” Jackson² sets forth a new framework for treating marketing as a science:

Early research and methods concerning customer relationship work often focus on more intuitive approaches to customer management. Many of the initial theories, such as one to one marketing and value-based management, were less analytical in their approach. Likewise, too often companies that have implemented customer relationship management (CRM) systems have done so with an unstructured approach (art) as opposed to a structured and by-the-numbers approach (science).

Not only is fly-fishing on a beautiful, cold water stream relaxing, it is the challenge of imitating nature in it's most pure form that makes me feel alive. Stealthily entering the water you envision the fish in their gin clear world, facing upstream, patiently waiting for the almost invisible aquatic insect to catch their attention. The reaction so sudden, yet so cautious, if you blink you have missed the moment; the opportunity. Imitating the natural environment with a perfect presentation, tremendous focus and the willingness to try variations; different flies, angles, tippets and times of day all make the sport so rewarding when finally you feel the fish on your line. You have succeeded despite the noise of others enjoying the river in their own way, splashing and thrashing, throwing rocks, hitting canoes with paddles...sometimes seeming like they do not care that they are creating havoc for the river residents.

Producing Marketing ROI holds the same challenge for me, both the art and the science of direct marketing must combine perfectly to create the opportunity to generate leads, acquire and retain business and ultimately ROI. The marketer, like the fly-fisherman, is faced with environmental factors that can determine the outcome despite a perfect presentation. Customers can be spooked by the economy, by their unique personal situation or even by disruptive competitive practices that create noise that mask the well-designed and timed marketing communication, to the perfect database, you have so carefully delivered.

So how can the marketer evolve campaigns to create a higher probability of success? Just like in fishing, one must discover the most fertile waters (data and business intelligence) and then deliver a consistent, relevant and timely message that cuts through the noise and restores the natural order. The marketer must enjoy the refinement of all aspects of the marketing continuum in order to be successful. The variables and iterations are endless; therefore the supporting tools and solutions must be just as robust. Think of Conclusive Marketing as your "Marketing Outfitter," providing unique marketing solutions that allow you to consistently capture the attention of the finicky consumer.

Sophisticated new automated marketing systems designed by Conclusive aspire to reflect the highest form of marketing prowess—selecting and executing communications for customers as if your best sales representative was always there. 

That description (as if your best representative were there) might sound a bit "Back to the Future," but think about it—advertising and marketing departments have for years sought to present the best marketing communiciations possible to their customers, but have historically issued a relatively small number of messages and imagery in their communications in order to be realistically economic. For years we've recognized that type of communication strategy was suboptimal, if only because one or a small number of communications could never speak adequately, much less optimally, to all the members of a large customer base. To communicate most effectively with a customer base, one would have to be prepared with a nearly limitless set of communication options for each individual consumer. It would be as if [indeed] your best sales representative(s) was on the virtual showfloor greeting each customer, selecting their messages according to the very wide set of factors that might be influencing each of those customers' choices.

What might the "best" sales representatives be looking for? Well, they'd be observing each consumer as they enter the store, recognizing how they dress, what they drive, whether they had children at their side . . . they'd notice what seemed to interest each consumer and they'd align their own efforts to sell the store products that most closely matched the combination of the consumer's interest and situation (i.e. factors that might lead them away from their initial interest, such as what they wore, what they drove, and those children . . . ). Frankly this is how the best sales and marketing departments operated a century ago—they just had no scaleability to apply their "best practices" to more than a consumer or two at a time!

So advertising and marketing evolved to determine central messages that could appeal more economically to larger numbers of consumers. Hence mass marketing flourished. The trouble was, that evolution brought the messages further and further from each individual consumers' interest. Now with the emergence of deep databases and technology that position us to more elegantly overcome marketing's "scale" issues, its time to evolve back!—back toward "human" marketing that lets us conduct careful and thoughtful custom communications for  thousands upon thousands upon thousands of individual customers as if we were meeting each individually on our virtual showfloor.

What is Conclusive's plan for this marketing future? The key is structuring marketing solutions to simulate human practices—leveraging any and all knowledge known to the marketeer, building "rules" that can determine the most appropriate communications to issue each consumer based on their interactions with us, and enslaving technologies that can execute those predetermined communications automatically when customer interactions are detected. Conclusive have meaningful assets in all these areas and has begun building an as-yet-to-be-named next generation solution that captures the essence of the "best" salesperson in a scaleable marketing automation platform. 

On our website, we call the ingredients Data Management, Data Intelligence and Data Delivery. Together, it can also be called Event Driven Marketing, Knowledge-based Marketing or Interaction-based Marketing. Funny though, to me (despite all the new terms) all this sounds so old as to be new.

In addition to collecting back taxes, the IRS also applies interest and penalties against those who do not follow the rules. The United States Postal Service^® (USPS^®) needs to take a page from the IRS book and apply more strict consequences for those who choose to cheat the Move Update rules.

Claiming postal discounts for using an NCOA^LINK® service, but never applying the changes to your list is illegal.

It is not that the USPS^® lacks authority to consistently apply strong consequences, but historically it has not taken full advantage of this authority. In fact, the Move Update form states  “I understand that anyone who furnishes false or misleading information on this form or who omits information requested on this form may be subject to criminal and/or civil penalties, including fines and imprisonment.”

Yes, there have been periodic reports of Move Update audits finding companies not in compliance, but the scarcity of these reports and the relatively light consequences does little to deter would-be cheaters. However, let the word spread that some executives are going to jail and the USPS^® now hands out penalties and interest charges amounting to five times the illegally claimed postal discounts and the mailing industry will take notice.

Specifically, NCOA^LINK® crooks are costing all of us higher postal rates. They place multiple financial burdens on the USPS^® by claiming discounts not earned and then depositing a higher percentage of Undeliverable As Addressed (UAA) mail into the system. This costs the USPS^® (and ultimately us) twice.

With the coming Intelligent Mail Barcode, the USPS^® will be in a very good position to more easily see which mailers have the highest UAA mail. With this information, increasing the number of audit teams and publicizing ‘busts’ will quickly pay for any increase in required manpower.

Let’s stop subsidizing the cheaters!