The missing piece

Return mail: A $34 million tax on university budgets.

With thousands of key stakeholders—alumni, students, faculty, employees, prospects, and trustees – spread out across the globe, universities and colleges have a difficult task at hand in order to effectively communicate with target audiences. While there are myriad options in today’s multichannel world, ranging from mail to email to social media, one still remains supreme—print. According to the United States Postal Services® (USPS®), the organization delivered more than 155 billion pieces of mail in 2014 alone!

For all universities and colleges, undelivered mail is a large and costly challenge, especially considering the limited budgets most are working with. While there are dozens of different types of mail schools may use, let’s focus on one of the more popular and more expensive—First Class Mail. Many use this type to send business-critical communications—acceptance letters, fundraising campaigns, invoices, and regulatory notifications—to intended recipients. While return mail is an increasing problem, each institution has its own unique issues that contribute to this waste of resources and lost business opportunities.

Source: USPS

The challenge is that approximately 3.69 percent of all First-Class Mail does not get delivered. According to the National Association of Colleges and Employers (NACE), the organization projected that there will be more than 1.85 million graduates in 2015 alone. If each new alumni were to receive 10 pieces of First-Class Mail from their alma mater—more than 680,000 pieces of mail will be undeliverable as ad-dressed. When you factor in that return mail costs a university an average of $3 per piece, according to Novitex data, in operational costs alone—postage, printing, handling, research, re-mailing and related processes—that equals a little over $2 million in return mail costs for new graduates alone.

The $3 cost only scratches the surface of the total financial impact of return mail, which can exceed $50 per piece according to Novitex data—meaning an estimated $34 million is absorbed or unrealized each year just for that same set of 1.85 million new graduates. The additional factors included in this figure are lost receivables, missed payments, labor and overall customer service costs. Even recuperating a tiny portion of this money would have a tremendous impact on already tight budgets.

Poor address management leads to fractured alumni communications

The primary reason behind this massive undeliverable mail problem is the quality of each institution’s address database—in particular for alumni. Each year millions of Americans move, sell their homes and change their names and as this information evolves, it’s extremely difficult for schools to capture it. Why? Because many alumni fail to inform them of an address/name change.

The ramifications of this are large for a university. For example, if a particular school sends out a print campaign announcing a new capital initiative and they receive a significant amount of returned mail, the impact is twofold. First, there are the aforementioned costs associated with undeliverable mail. And many institutions will send materials to their most important donors via First Class, a more expensive method, but one that’s worth the investment to help impress the intended recipient and get them to open up their wallets. Second, is the lost opportunity to communicate with alumni who may have previously donated about the new fundraising campaign. If they don’t know about it, how can they contribute?

A centralized solution

When a piece of return mail is received by a college, many rely on labor intensive processes to try and identify the new address for the intended recipient, but that is a difficult task. To efficiently and effectively rectify end-users’ incorrect addresses while reducing operating costs and fines associated with undelivered mail, schools must implement a centralized, automated managed service. This approach integrates multiple technologies to convert physical mail into usable data and performs a variety of pre- and post-processing functions to ultimately update addresses and accounts.

The goal is to establish a timely and consistent set of procedures that can be managed with the centralized reporting that is necessary for a USPS compliance audit. A managed return mail service must: automate integrated technologies, incorporate postal hygiene addressing tools and third-party data, provide real-time reporting and auditing and significantly reduce the volume and cost of undelivered mail. Below are four key steps schools should keep in mind when creating and operating this type of service:

  • 1. Track and convert physical mail into usable information. Most universities and colleges lack the security, procedures, and work-flows required to efficiently handle and track physical mail internally. The first step in the return mail process is to capture physical documents and convert them to an electronic format. This can be done through scanning or bar code capturing either onsite or offsite using internal company personnel or an outside service. Once completed, the original hard-copy pieces can be securely destroyed or staged for repurposing which includes re-mail, reprocessing and address validation with stakeholder follow-up if required. The data should be promptly uploaded to a host platform for updating and storing.
  • 2. Scrub and validate the address book. After an organization has converted physical return mail to digital files, the company’s address database must be updated and validated using certified USPS or external data sets. A best practice is to accompany these tools with an integrated data platform to combine intelligent program logic with multiple data compilers and thousands of active postal-certified and third-party databases. The goal is to provide schools with the ability to conduct a truly comprehensive search of consumer and business records, including landline and cell phone data, voter registrations and magazine and newspaper subscriptions. These advanced search activities can significantly improve the likelihood of finding the last-known or updated address, which is far beyond what commodity solutions can provide.
  • 3. Streamline process via document repurposing. Implementing back-end business processes and data-driven events ease the pro-cess of resending mail to updated addresses and allows the subsequent automated reprocessing of any addresses with ongoing issues. It is critical for organizations to keep a historical record of the exact number of pieces of undeliverable mail that originated from a single record, as it will help to identify potential problems before they arise. Universities often suppress bad addresses, but many find that this process was established based upon old logic that was not initiated by a postal expert. Additionally, rebound processing can be used to immediately access any document that has been mailed and returned again as undeliverable. This method can be used to feed trigger alternative methods of communication.
  • 4. Report, analyze, and improve results. An effective return mail management service must include core reporting, metrics, and audit processes that produces usable and reliable key data to update the host platform and provide university officials with statistics. Tracking, analysis and documentation should also be established to validate the quality and metrics of the process. All images should be indexed and archived, and electronic files should be stored to meet user requirements.

Return mail will continue causing workflow conflicts unless universities and colleges proactively address it by using a centralized, auto-mated return mail service. By leveraging a combination of technology, processes, and data, schools can reduce their operational costs and increase their communications with key stakeholders positively impacting the bottom-line.

Christine J. Erna
Christine Erna, senior postal consultant of Novitex Enterprise Solutions, has more than 25 years of experience in direct mail marketing, design, analysis, USPS compliance, and training, including 18 years with the USPS as a mail piece design analyst. She combines extensive knowledge with Six Sigma process strategies to help improve end-to-end mailing processes. Looked to as the industry expert, Erna is a frequent speaker at industry events, such as the National Postal Forum.

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