Preparing for Successful VDP

What can you do to fix these addresses? Maybe the bigger question is why should you be concerned about fixing them? Let's say you sent out a 20,000-piece mailing and 5 percent of your addresses were deemed undeliverable, and of the pieces that were delivered there was a 4 percent response rate, which generated an average sale of $200. The lost revenue from these bad addresses would be $8,000 (i.e., 20,000 pieces x .05 undeliverable addresses x.04 response rate x $200 per sale). And that does not consider the lifetime value of a customer.

Is it worth spending $100, $200 and $500 to bring in that additional revenue? If the same mailing went to 200,0000 people, the potential revenue would be $80,000. At what point is it worth it to fix the bad addresses that did not make it through CASS/DPV or NCOA? It obviously depends on the size of the job, the value of the response, the nature of repeat orders from the customers, the cost of the piece and the cost of mailing.

Fixing Undeliverable Addresses

What can you do to fix these undeliverable addresses? To start, the USPS has an additional service called Address Element Correction I (AEC I) and Address Element Correction II (AEC II). AEC I is a service offered by the USPS (through one of the mail prep software manufacturers) at $15 per thousand. It has an average correction rate of 30.5 percent. The AEC II is also offered by the USPS to correct addresses and actually gets the local postal carrier involved in the address resolution. The correction rate for the AEC II is 75 percent.

That still typically leaves 25 percent of the undeliverable mail that has not been corrected. These could be people that moved to a new address more than four years ago and are not found in the USPS database records, or maybe they moved out of the country.