There is a mindset about the postal address that is changing.

The outdated thinking perceives an address as being only aligned with mail, only valuable for qualifying for postal discounts, and just part of cost of doing business.

Address data quality is a game changer that is now gaining the attention of senior leaders.

“The biggest thing that people don’t understand is the true impact that addresses have on an entire business,” says Adam Collinson, the foremost expert on the postal industry and data quality services and GrayHair’s resident “Addressing Guru.”

Perhaps an even greater misunderstanding is that address data is valuable customer data.

And customer data is the holy grail to increasing revenue and driving successful customer engagement. Superior address data is a critical part of doing and maintaining business.

(Collinson, Director of Research and Development, joined Everette Mills, Director of Technical Product Management, for a live webinar: Address Data Quality Is a Game Changer for Large Enterprises on February 4. You can view the archived presentation by clicking the link.)

I had the opportunity to speak with him to learn what’s new in address quality and how companies are handling some of today’s most difficult challenges. Here’s what he had to say:

BH: How is address data quality a game changer for 2021?

AC: More and more data is becoming available about addresses which will allow businesses to make smarter business decisions – and not only related to mailing operations.

That additional data is coming through the USPS and companies like GrayHair. We have additional data that can be brought to bear to help make those smarter decisions.

This expanded information allows businesses to decide: Is this a customer I want or one that I am even allowed to engage with? Am I getting the right address information for what I need to do with them? Am I shipping a product or sending a bill? Multiple addresses may be needed.

Today, address data is helping identify where there are risks and concerns. Am I making the right offer? Am I applying the right tax rates and meeting government regulations that could have some serious financial penalties?

Most of those concerns are not mail related. They are about business impact.

Businesses are realizing that more attention needs to be placed on the address because of its effect on the whole business.

BH: How does address data quality differ from address quality?

AC: Address quality is typically defined from a postal perspective. Is the address complete, correct, and current – allowing it to qualify for postage discounts?

When we talk about address data quality, we’re talking about making sure a company has the address they need for a specific operation. We’re looking at other aspects of that address, additional data points. If there are deficiencies in an address, we look to identify them. Once identified, it becomes factored into optimizing the effectiveness of the mailing.

Each mailing within any one company has specific needs and requirements. What the marketing team has as priorities for a campaign piece is different than the shipping department’s set of needs and criteria. Sending out annual notices has a different set of rules than when you’re sending out reimbursement checks.

The greatest downside to ignoring address data is that you are hurting your customer relationship. You’re not able to communicate with and service your customers in the best way, and the result is that you may lose customers and hurt your company’s reputation.

BH: What can we expect from the USPS 10-year review later this year, and how important is it that a company prepare for it?

AC: Companies need to prepare now.

Prices will be going up. Companies will need to reassess how they are doing business. There are two options. The first is to go ahead with planned mailings and incur the additional cost or possibly reduce your lists by as much as 10%, and with that you can expect 10% fewer sales.

But, what if instead, you choose to mail 10% less and you strategically decide - using address data quality - precisely what 10% to cut so that you are eliminating what was not adding much value to begin with?

BH: If mail volume is on the decline, why is record processing of address quality increasing?

AC: Mail volume is declining, yet according to statistics shared by the USPS, of the mail still going out, the percentage of undeliverable mail (UAA) is going up. This is becoming a bigger issue for high volume mailers, a source of tremendous waste and risk. But that means it Is also an opportunity.

This is where data quality processing is coming more into play. Mailers know they need a higher quality of address if they are to improve effectiveness and deliverability. Doing the minimum just to meet postage discounts is not enough to get the best results out of a campaign. Companies are beginning to access available high-quality address data to make smarter business decisions.

BH: What impact is the pandemic having high-volume mailers today?

AC: The initial impact of COVID-19 was a massive hit on marketing mail volume because of risks and concerns of the unknown.

Marketers were asking: Will people be able to buy my product? Should I still be making these offers? Why am I sending out offers that normally drive people into stores when people are being told not to go to stores?

After that first phase, there was a big switch with companies moving online. Companies needed to have online offers and online services. That drove a massive increase in packages going through the system, tapping all shipping services. It also meant they needed to deal with more addresses and had bigger impacts from address related issues.

Address quality for packages is a much bigger deal than with letters. You have addresses where mail can be delivered no problem, but packages become an issue. When a package cannot be delivered and needs to be returned, it is a big deal. It’s not a 50-cent postcard. It is often a $50 investment - or even much more. This is another instance where data quality can make the difference in ensuring delivery and preserving customer satisfaction.

Then, the holiday season hit.

When you have what we have just gone through with peak season in December where there is a massive volume of packages, as well as mail, and things are getting backlogged because of so much volume, you have serious delays. Add to that that you have carriers who are out because of COVID, replaced by new carriers delivering in places they’ve never been before. When that happens, you lose valuable postal carrier knowledge. That means a certain volume of mail that is slightly deficient in address quality but may have been figured out by the carrier familiar with the route becomes undeliverable.

The result is that the impact of peak season (delayed mail) started in November and lasted for part of the country through January. That’s created some real challenges for companies today.

BH: Can you expand on that?

AC: Most of the initial, temporary address requests filed were businesses that sent workers at their offices to work from home – which created its own set of challenges. Many of the other requests were people who had moved to be with family or snowbirds who opted to stay put.

Understanding where your customers are is critical, most especially for healthcare and insurance companies, because depending on where someone is living that changes what healthcare they could be covered by. Companies need to know if this is a permanent or temporary location where they are now living.

A concern for those companies right now, given that everything got backlogged through December and today (talking with you at the end of January), there is still mail getting delivered that was entered in the system the first week of December - and even some from November.

This includes things like healthcare cards, bills, and statements that as a result of being late are resulting in cancellations and late fees. For banks and other financial institutions, it’s statements, payments, credit cards, and even contracts that are long overdue to arrive.

That’s where the value of being able to track mail really matters, where the more you know about your customers, the greater opportunity you have to ensure a positive customer experience. If mailers know that their mail is stuck, then they know their clients did not receive their bill or didn’t receive what they needed to renew their healthcare. Instead of doing late fees, those companies can reach out to them another way to account for that and try to maintain a level of customer satisfaction.

An even greater risk to customer satisfaction comes when a customer mails a payment on time (using a mortgage payment book), but that remittance mail piece is delayed in arriving. The check really is in the mail. It’s smarter to hold off on sending late notices which costs money to send, impacts the customer relationship, and will most likely result in a customer service call.

BH: Anything you’d like to add?

AC: There are changes coming regarding the USPS, including rule changes that won’t take effect until August of 2022, that will especially impact high-volume mailers. There will be benefits and there will be negatives.

There are actions mailers can take now to see benefits in their operations today so that when August 2022 comes along, their systems will already be set, and they will have already done what’s needed to minimize any negative impact caused by those changes.

The smartest thing a company can do is be aware of what the possibilities are so that, when the time is right, they can make changes that can have a major impact on the organization.

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Barbara Hannan is B2B freelance writer on topics including mailing, shipping, marketing, and customer experience. As a brand ambassador for several Fortune 100 companies, she has worked closely with businesses large and small all over the US. Contact Barbara on LinkedIn.