Large corporate mailers are intimately familiar with USPS workshare discount programs that require the preparation of mail in accordance with postal rules. Last year's CASS Cycle L changes are the latest example of rules that help the USPS cut costs and improve mailpiece deliverability.
One of the new rules under CASS Cycle L is a requirement for Delivery Point Validation (DPV) to confirm address deliverability. Corporate mailers adhering to new DPV requirements will receive the highest levels of postal discounts. Mailers who do not measure, analyze and act to meet these new requirements risk negative financial impact.
Whether customers prepare mail in-house or use an outsourced presort vendor, a certain percentage of their mail will qualify for postal discounts and a certain percentage will not based on the address validity. The validation may be done by CASS software products that run against customer files, or by MASS products embedded in MLOCR hardware where address blocks are read by cameras, converted to data and validated. DPV verifies that the specific street address is deliverable. If not, the current versions of address-coding products are not allowed to produce the 11-digit delivery point which is required to receive the deeper levels of presort discounts.
DPV processing is a "yes" or "no" on USPS address validity. These new, non-qualifying mailpieces are not only mailed at a higher rate, but a percentage of them will be completely non-deliverable. This means DPV provides mailer visibility into problem addresses that have likely contributed to their return mail volumes.
Here is a typical cost scenario to help mailers quantify the financial impact of non-qualifying mail, regardless of cause: For every one percent of non-qualifying mail, assuming a 70%, three-digit rate, there is a $70,000 loss of postal discounts per 100 million First-Class, one-ounce mailpieces. Assuming 15% of this unqualified mail (which fails CASS/MASS) will be returned at an average enterprise cost of $5, there will be an additional cost of $750,000 in returned mail. This results in a total of $820,000 for every one percent. With such high financial stakes, corporate mailers should carefully review the following areas, to help improve adherence to DPV requirements.
Mailers should benchmark and invest appropriately in solutions that can resolve Zip+4 and DPV failures. Companies running CASS environments can send these 4%-10% exceptions to an in-step and/or outsourced solutions provider, depending on their operational needs. The leading software solutions providers have developed advanced uplift and correction technology that runs as part of the CASS process. These solutions have minimal impact on customer operations and maintain maximum data privacy. These processes have yielded a range of 0.8%-2% improvement in based coding rates.
MLOCRs and Read Optimization Corporate mailers reliant on MLOCR processing should conduct read-optimization benchmarking with DPV enabled in MASS. Optimization approaches include adjusting address-block parameters (fonts, orientation) and investing in multiple MLOCR technologies which have different camera and embedded MASS engines that can run exceptions through to improve yield.
Companies using a presort vendor should validate the technologies and capabilities available. They should assess their commercial options that favor a presort vendor with access to more robust MLOCR equipment resulting in higher qualification rates. Even mailers using MLOCRs downstream should consider CASS deployment. This will reduce MLOCR passes and the cost to implement upfront exception processing, which may be difficult as addresses are read on the fly in a pure MLOCR environment.
CASS Electronic Delivery-Point Barcode Applications To eliminate MLOCR read errors and control barcode services, mailers should consider applying the new Intelligent Mail Barcode (IMB) during document composition or printstream processing.
Printstream-engineering and document-composition tools take the barcode information produced from the CASS Coding/Move Update process and directly convert it to a font or image that can be rendered on the document. The process prevents any read errors that may occur while interpreting the address block. The resultant CASS/Move Update output file allows companies to easily make updates and mandated changes. It is important to implement in-house quality control in barcode application to ensure the highest degree of integrity and USPS mail acceptance.
Intelligent Mail Barcode Companies should consider their 12-18 month needs to migrate to the IMB, a multi-service barcode already in voluntary service. The IMB will be mandated for First-Class by early 2009. This delivery barcode can also allow companies to leverage new services, such as track-and-trace and move-update data though in-house generation and application.
Of high importance is the encoding of unique identifiers in the barcode that allow companies and business units to tie tracking and move events back to their customers and specific mail documents. While third-party mail houses may be capable of generating the new barcode by 2009, corporate mailers may benefit from controlling other services by encoding and applying it to their outbound documents.
Measuring the total DPV financial impact is not just about complying with the new CASS Cycle L requirement. It is an opportunity for corporate mailers to analyze and assess their customer communication impact and cost and to make changes to maximize the full potential of their mailstream.
In an effort to ensure compliance and minimize financial impact, every business should analyze their unique mailstream needs. Armed with this knowledge, companies can then identify the total DPV impact across the enterprise and leverage the visibility to bad addresses that DPV provides.
Contact Kevin Conti, Director of Mailing Solutions, Pitney Bowes' Group 1 Software at 630-699-8658 or Kevin_Conti@g1.com.
