The Value of a Customer

There is an old saying – “If it’s too good to be true, it probably is”  this saying along with “You get what you pay for” are truths many of us have had to learn the hard way.   With the new USPS mandated Move Update deadline rapidly approaching, many companies are looking at their options for purchasing NCOALink^® and alternative Move Update services. 

Some NCOA vendors are offering (including Listcleanup.com) an all you can eat at one price option.   Now, shopping for the cheapest price seems like a logical solution, except when you consider the value of a customer.   Given the significant increases in NCOA volumes projected by the addition of Standard Mail in the new requirements, is it not logical that some vendors are going to have challenges in delivering on advertised turn times?    If the average mail house or lettershop’s monthly mail volume is traditionally 80% Standard Mail, then volumes for many of the NCOA providers could be quadrupling over the previous First Class volumes.  

So, when your customer calls and wants to know why their mailing went out later than promised, do you think they are going to be satisfied with the answer  - our company selected the lowest cost NCOA provider and they failed to return the file to us when promised?

Forecasting the need for standalone online NCOA services is a function of five intersecting variables: USPS regulations, ACS Options, Software Integration, Internalization, and competitive offerings. 

The largest impact on NCOA services in the last 10 years is the USPS’s change to the Move Update regulations.   Beginning in November of this year, the new regulations will add Standard Mail and double the frequency requirement to 95 days.

With this projected increase in demand comes more options and changing economics.    For some larger mailers, the regulation may make it cost effective to bring the processing in house.  These larger mailers are also more likely to have already purchased industry specific software that includes integrated flat rate NCOA services.   Finally, the changing options with ACS services may be optimal for some clients who don’t need to clean a list before it is mailed.

However, for the vast majority of smaller to medium size mailers, nothing is easier or less costly than using an on demand, online NCOA service.    No software to buy, no hardware to buy, no agreements to sign, and no payments in advance.    Combine these benefits with sub 10 minute turn times (coming in December) and the benefits of advanced bundled services, and nothing is simpler or less costly for the small to medium size mailer.    Make sure you ask for a competitive rate, and see why even some of the industry's largest mailers still prefer the benefits of working with an independent online list hygiene company.

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.

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!