early stages in the journey

1Canada Post – June 2009

A journey to address the Undeliverable Mail problem

NAMMU Toronto Chapter meeting - November 26,2009


Early stages in the journey

December 11, 2008 Toronto NAMMU Chapter Meeting

• Exploring the problem

• Results of initial quantitative mailer research

• Elements under evaluation

• A plan for in-market mailer data pilots


The volume of Undeliverable Mail

Annually, Canada Post estimates that more than 140 million pieces of mail are incorrectly addressed


Drivers of Undeliverable Mail

Inaccurate addresses

Movers

Deceased

72%

27%

1%


A lack of marketer knowledge surrounds this problem

67% estimate file is 95% accurate or greater

74% do not measure undeliverable mail

69% could not estimate the financial impact


Service% stated

usageConcerns

Address Accuracy 26% 21% could not estimate value

Change of Address

16% “deceased” not top of mind

Address Correction Service

14% 76% do not run every time

Return Postage Guaranteed

56% 15% incidence rate

Mailers do not appear to be taking advantage of today’s data hygiene tools

Mailer Rationale: Most believe customers proactively contact them with updates and corrections


Current CPC Standards – Product Configuration

Incentive Threshold

Accuracy Threshold

Volume Threshold

Evaluation

Data Currency

Financials

Address Accuracy Required

95%

5,000 +

Annually on Sample File

Within 1 year

$0.05 piece below threshold


Canada Post major data pilot study with 13 Mailers

•A representative sample of mailers across industries, mailing regions and use of data tools were selected

•Mail file segments were prepared to validate the effectiveness of tools

•All returned mail records were captured and attributed back to the mail segments

•Analysis is conducted to understand effectiveness of tools and implications for the mailer

MailerSelection

Application of Data Tools

Capture Return Data

Summarize Findings


The pilots analyzed both current and proposed tools

Proposed Enhancements

Current Tools

Address Accuracy Range Point of Call

Change of Address

3 year 6 year

Deceased 1 year in NCOAUniversal

Suppression Deceased & Opt-out COA


Continuing the journey

June 11, 2009 Toronto NAMMU Chapter Meeting

• Results of pilots

• Focus of CPC efforts


Current tools can drive efficiencies and new tools show promising results

Proposed EnhancementsCurrent Tools

Address Accuracy

Corrected: 3.6%Invalid: 4.7%

Missing Apt/Suite 3.9%

Change of Address

2.2% correction0.8% suppression

Improvement of 16-38%

Universal Suppression

Identified 1.4%

Over 11.3% of the file was impacted by current tools alone


Campaign return rates are improved with tool usage

Current tools reduced returns by 17% and beta tools by 27%

4.1%

3.4%

3.0%

0%

17%

27%

0%

5%

10%

15%

20%

25%

30%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Control Baseline Enhanced

Impact of Tools on Return Rates


Return rates varied by the type of address

Return Rates Highest for Apartments

5.8%

4.0%

9.8%

2.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Rural /Lock / PO Box RR/Civic Apt Urban

Return % by Delivery Type


Enhanced

Baseline

Control

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

6.4%

2.4%

8.8%

2.4%

9.8%

2.7%

Aggregate Pilot Mailers Delivery Type Mailed by Return Rates Percent

Apartment returns can be reduced

Apartment returns reduced by 10% for Current tools and 35% by Beta Tools


Understanding a mailer’s risk profile

Data Risk List Profile

Higher likelihood to be clean

• Sourced from billing database• Frequent contacts or active loyalty program/publication• Regular updates applied back to database• Regular validation at customer contact points• Low apartment/suite penetration• Low rural penetration

Lower likelihood to be clean

• Infrequent contact or lapsed customers• No billing or purchase history • Prospect list acquired through promotions/online• Long-term warranty or long purchase cycles • High apartment/suite penetration• High rural penetration


Where we are today in the journey

November 27, 2009 Toronto NAMMU Chapter Meeting

• Focus of effort

• Activities underway


Focus of Effort to Address Undeliverable Mail

Focus on largest driver – movers

Present the Value Proposition

Tool Improvement

Market Awareness and Education


The ongoing cycle of mail communications

Pre-Mailing: List cleansing up front Mailing

Occurs

Post-Mailing: Gain insight through

Returns

Internal Mailer Processing: apply

learnings


Pre-Mailing is the first step in the process


Occurs


Returns


learnings


When executing your mailing, data hygiene is a critical step

• Apply certified address accuracy software

• Apply merge/purge rules to reduce duplicates

• Apply the CMA’s Do Not Mail file and internal suppressions

• Correct name/address through NCOA moves software and consider removing deceased records

Pre-Mailing: List cleansing up front


Estimated Pre-Mailing Benefits


Occurs


Returns


learnings

Best Practices show identification of:• 70% of incorrect addresses • 30% of movers


Pre-Mailing Benefits


Occurs


Returns


learnings


Returns management: end-to-end

• Collecting returned and undelivered pieces quickly

• Extracting as much relevant data as possible from each piece (inside & out)

• Ensuring that data is captured and updated back into customer/prospect databases

Post-Mailing: Gain insight through Returns


Estimated Post-Mailing Benefits


Occurs


Returns


learnings

Should identify an additional: •25% of incorrect addresses •40% of movers


Pre and post-mailing information should be integrated back into the mailers organization


Occurs


Returns


learnings


Applying best practices in data management internally

• Validate address accuracy at point-of-entry

• Clean your internal database regularly for incorrect or missing fields

• Update address information at customer touch points

• Create an in-house preference, contact or suppression file

Internal Mailer Processing: apply learnings


Maximizing effectiveness is a fully circle process


Occurs


Returns


learnings

Should target identification of 95% of address errors and 70% of movers


Your program ROI should be higher with data cleansing

Without Data

Cleansing

With Data Cleansing

Undeliverable/Incorrect % 10.5% 5.0%

Quantity 500,000 500,000

Total Campaign budget $750,000 $754,000*

Undeliverable/incorrect pieces 52,500 25,000

Net response rate 2% 2%

Number of sales attained 8,950 9,500

Gross profit per sale $250 $250

Average cost per sale $84 $79*Include data hygiene processing costs


The benefits of reducing Undelivered Mail

Improve campaign metrics

• Improve response rates and cost per order

Reduce costs

• Eliminate Direct costs; minimize Indirect

Become more green

• Reduce waste

Be a privacy leader

• Respect and protect your customers’ information


Tool Improvements

Address Accuracy Rules for Validation and Correction (completed)• Apartment building addresses (suite information)

• Rural Addresses (‘0’ in the 2nd position of the postal code)

NCOA changes and improvements for 2010• 6 year file

• Consent changes to allow update

• COA marketing efforts to drive enrolment and opt-in


Market Education

White Paper – Launched October; update in 2010

Webinars – October; November and into 2010

Conferences – Print in the Mix; CPC Out-of-the-Box; CMA more in 2010


Market Education continued

Collateral – educational sheets

• Customized for mailer, agencies

• Checklist for working with VAM


In 2010 the journey continues…..

early stages in the journey

Documents