This article originally appeared in the May/June, 2018 issue of Mailing Systems Technology.

If your business or institution sends out large volumes of mail, it’s there. No matter how good your customer relationship management (CRM) system is, everyone has it. In many cases, it’s hidden from “the bosses,” stashed in a closet, or tucked under desks, cabinets, and tables. Sometimes, it may even be filed in the blue dumpster behind the building or recycled. To what am I referring? Trays and tubs of returned mail, of course.

Why all the avoidance and subterfuge? Departments responsible for mailings don’t want to be caught with returns. It casts the perception of mail failure. “Why is mail coming back from our campaign? It’s wasted money!” It even leads to mailing budget reductions for the department – and with good reason. Our own analysis of the expenses in returned mail indicate an average of $3.00 per piece on the low end. When you factor in customer churn rates, customer service calls, and future misdirected mailings, the rate may climb as high as $50 per piece of mail.

I visited one company and asked about their returned mail process. They quietly took me to the back of the building, and opened the door to an abandoned cleaning closet. Inside, there were stacks of yellow-stickered returned mail pieces that they had no idea what to do with. What happened when the closet was full? It got dumped, and the process started over again.

A former employee in the development department shared a story of a unique job task. Shortly after-hours in the evening, she was asked to take the trays of returned mail to the parking lot and place them in the trunk of the director’s car. Like a mobster hit, the “body in the trunk” was never seen nor heard from again.

The problem is that although everyone is frustrated with the rate and expense, most businesses or institutions don’t have a defined plan or process for dealing with returned mail; nobody on the staff is responsible or accountable for dealing with it. It piles up, gets hidden, and rarely gets dealt with.

DEALING WITH RETURNS

Some operations do have a plan in place to manage their returned mail. Typically, the request is, “When you have time, enter these into the system.” That immediately brings two issues to the forefront: Who has the time, and what happens when you enter them in the system? Few employees have the interest or spare time to manage returned mail. Therefore, it doesn’t get done, and those same names and addresses continue to get mailed again and again — and returned again and again, setting off a vicious mail cycle.

“Entering them in the system” usually means disabling the account from future mailings. No effort is made to attempt to locate the lost customer or donor — either with a phone call or internet search. The hundreds of dollars spent in marketing and sales dollars to find, attract, and retain the customer are wasted, as are potential sales opportunities.

WHAT CAN BE DONE?

First, management at all levels needs to be aware that no CRM system, and no mailing list, is perfect. On average, four percent to 10% of any mailing is Undeliverable-As-Addressed (UAA) and subject to returns. In its last fiscal year statistics, the USPS reported that 4.6% of all mail was classified as UAA, with 21% of all UAA mail returned to the sender. In the first quarter of this fiscal year, the USPS also reports that 68% of UAA mail is attributed to a Move Update. Return mail happens, period.

For the smaller mailer, providing the actual mail to the appropriate sales/account executive to research is the first solution. For most, it means lost commissions, so they have a vested interest in finding and retaining those accounts. For institutions and nonprofits, this is a perfect opportunity to utilize volunteer staff. Again, a few phone calls and web searches may help resolve many of the returns.

Larger mailers need to designate a CRM Data Steward and develop a process that involves management of the returned mail, from extraction (if needed) to research, data entry, and re-mail. The process should also include preventative actions to reduce the volume of returned mail in the future (again, no list is perfect, and returned mail will always exist as long as there is mail). In some cases, this may involve outside support.

RETURN MAIL PROCESSING

Some mail service providers (MSPs) now offer secure return mail processing services. Mail is picked up and key entered at a facility before processing. While these services meet privacy compliance regulations, some mailers prefer to scan and provide PDF copies of the mail for entry and management.

Depending on mailer capabilities, an account number can be included in the address block for quick entry and matching to the mailer’s database. If not, the entire address block is keyed. If necessary, envelopes can also be opened with mail extracted so significant other attributes can be keyed, such as an account number, date, or balance.

This returned mail data is processed through the USPS Coding Accuracy Support System (CASS)/Delivery Point Validation (DPV) data for initial hygiene, then passed against several industry files to identify change of address information. It starts with the USPS NCOA database, then identifies address changes dating back beyond the 48-month window of NCOA using other proprietary mailing databases. These databases use the most robust data sets available with links to more than 29,000 continually-updated data sources.

Match rates range from 35% to 60% depending on the quality and age of the mailer’s database.

PRE-MAIL PREVENTION

Of course, pre-mail prevention is the best medicine against the ills of returned mail. Returned mail is the physical evidence that you have issues with your database of customers, patients, alumni, or donors. But with a better understanding behind the root cause of UAA and returned mail, mailers will no longer fear “hiding the evidence.” By addressing the issue head-on (pun intended!) and utilizing additional tools for address management before and after the mailing, mailers will be on the path to future success and fewer returns. So – where is your returned mail hidden?

Gary A. Seitz is Vice President of CTRAC Direct and has been a frequent presenter at the National Postal Forum and PCCs around the country for over 35 years. Gary can be reached at GSeitz@ctracdirect.com or by calling 216.251.2500 x 4985.

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