The vast majority of mail pieces are processed using direct marketing software available from a number of well-established software vendors. These technologies run on all major platforms and operating systems and offer mailers a wide range of functionality. Your organization is most likely utilizing these technologies on a daily basis. However, it is up to you to determine whether you feel it is necessary to utilize this technology in-house or outsource it to a service bureau.

There are many outstanding and dependable service bureaus throughout North America working on behalf of leading businesses of varying sizes and in every vertical industry imaginable. For organizations that might not have the internal resources, expertise or equipment to manage the direct marketing process, service bureaus are the right choice for communicating cost-effectively with customers and prospects. Service bureaus are also ideal for handling print mail production. For the purpose of this article, however, our focus is on the business case for utilizing direct marketing software within your enterprise.

The primary technologies we will highlight for in-house use include those we discussed in the September-October 2003 issue of Mailing Systems Technology magazine (Mailing Software From Address Validation to ZIP Code... and Everything In Between): address coding, list processing, Move Update and presort.

Before we discuss these specific technologies, we'd like to briefly touch on some of the operational benefits that can be derived from using direct marketing software in-house.

Customer Relationships You know your customers better than any service provider. Therefore, it makes sense for your organization to manage this most important asset.

Cost Direct marketing software can be expensive, particularly for organizations that are running on powerful systems, such as AS/400 or IBM Mainframe. However, most organizations recoup their investments through postal savings within a year or two and all savings after that improve the bottom line.

Security Businesses can't be too safe these days. Consequently, by not having to send your data outside the enterprise, your customer information is protected.

Turnaround Time By controlling any of these processes in-house, you can significantly reduce the amount of time it takes to get your mailing into production.

We'll now highlight some of the benefits associated with using the four major direct marketing technologies in-house.

Address Coding

The USPS and CPC certify and recognize software that meets certain matching criteria for validating and correcting address data. There are a wide variety of solutions that you can utilize in-house that can help you validate and correct address data in both real-time and batch modes. Address validation software enables you to ensure the deliverability of important communications and goods and services. And by using address validation software in-house in conjunction with presort software you can realize tremendous cost savings.   

Domestic mailers currently can save nearly 25% of the cost of First Class postage and up to 31% of the cost of standard mail by using address coding and presort software in tandem. Significant savings can also be achieved with other classes of mail. Similar benefits are provided to Canadian mailers using direct marketing software. By demonstrating an address accuracy level of at least 95%, Canadian mailers can avoid the 5. per piece surcharge.

Obviously, the more you mail, the stronger the business case is for licensing direct marketing software. Even if you aren't mailing millions of pieces, you can still utilize powerful technology within your enterprise. For instance, a number of firms provide industry-certified solutions via application services provider (ASP). With an ASP, ongoing maintenance and support are minimized for internal IT staff by eliminating monthly software and data updates.

List Processing

By identifying and eliminating duplicate records, mailers can realize tremendous operational savings as well as avoid alienating customers by not sending them, for instance, multiple copies of the same catalogue. List processing technologies offer a wide array of sophisticated matching algorithms and processes that allow users to reveal duplicate records and relationships among records within their database.

With over two decades of experience in the industry, we know that seemingly every organization has a different perspective on what is defined as a duplicate record. In many businesses, each division defines a duplicate record differently. For example, duplicates can be identified based on name, address or name and address. Consequently, by utilizing list processing software in-house, you can determine what your organization or operating unit defines, thereby maximizing the quality of your data.

Move Updating

More than 45 million individuals, families and businesses in the United States move each year. The USPS tracks these address changes through its National Change of Address (NCOA) program. Organizations must track address changes to maintain important customer relationships while avoiding the high cost of having to manually process a Move Update and re-mail the original piece. Additionally, to qualify for postal presort incentive rates for First Class mailings, you must comply with USPS-mandated regulations for Move Update requirements by processing your data through change of address technologies at least twice a year.

The lag in response time from outsourced service providers prevents you from utilizing the freshest possible data in your marketing campaigns. Additionally, if your service provider does not notify you in a timely manner of address changes that are applied to your database, the overall quality of your house file can deteriorate. However, if you update your database in real-time with the latest change of address data, you will comply with USPS regulations and your database will be as accurate as possible. And by owning this technology, you can apply the most up-to-date address changes each week at a fixed cost, thereby avoiding processing charges.

Presort

Businesses can take advantage of postal discounts for all classes of mail by sorting mail according to USPS and CPC regulations. These organizations certify and recognize software that meets certain criteria for presorting address data.

The more of the presort process you own, the greater the savings. Even if you outsource fulfillment, you will still realize substantial cost efficiencies. Businesses can also save substantially by realizing tremendous savings from advanced presort options such as manifest reporting, palletization and drop shipping. By owning the presort process, you can tailor the parameters to better suit your specific business requirements.

Tim King is the vice president of Postal Affairs and David Peikin is the corporate communications manager with Group 1 Software. For more information, visit www.g1.com or you can e-mail Tim at tim_king@g1.com or David at david_peikin@g1.com.