PR - Acxiom Responds to U.S. Mail 2008 Rule Changes

It’s official. Next year, the U.S. Postal Service will make effective two new requirements that could greatly increase the costs of direct-mail processing for some businesses.

The first new regulation – that the same mover updates required for First Class Mail will be applied to all Standard Mail – makes the lower-cost alternative of Standard Mail more expensive to process. The second new regulation increases the frequency of those mover updates from 185 to 95 days, doubling the processing and costs for some ill-prepared direct mailers. Yet, Acxiom (Nasdaq: ACXM) clients will be able to take these changes in stride. Acxiom’s mover update processing has historically been every 90 days with even shorter intervals available.

The new regulations, unavoidable it seems, will decrease the amount of undeliverable-as-addressed mail (UAA), a costly problem for the USPS and individuals, businesses and organizations which utilize direct mail. In fiscal year 2004, the last time statistics were gathered, the Postal Service handled 9.7 billion pieces of UAA mail at a cost of $2 billion – a cost that is shared with mailers in the form of postage rate increases.

According to the Direct Marketing Association, a substantial percentage of direct marketers will have to make costly changes to meet the new USPS regulations. In a recent survey of DMA membership, it was determined that 34 percent of direct marketers will have to change their rhythm of mover updates from every 185 days or more to every 95 days.

“For years, the best practice at Acxiom has been to update each quarter (90 days) at a minimum. This revision of the mover update requirements to 95 days by the USPS is an affirmation of this best practice,” said Jim Plas, group leader of Acxiom’s Customer Data Integration product group.

Companies shouldn’t just stop at quarterly updates. As a non-exclusive Full Service Provider Licensee of the USPS, Acxiom receives weekly updates of NCOA from the USPS. This provides clients with access to the most recent moves at intervals that fit their business needs, reduces costs and waste, and provides a foundation for effective direct marketing, Plas said.

In addition, Acxiom’s uses its proprietary AbiliTec linking technology to find the information many traditional change-of-address processing systems miss. Updated every month, Acxiom’s database contains a complete five-year history of change-of-address records compiled from a variety of sources, including magazine and catalog subscriptions and mail-order lists. This offers a powerful way to augment the NCOA process, typically finding 2 percent to 3 percent more addresses than those identified by NCOA alone, Plas said.

On May 23, 2007, the USPS published a proposed rule in the Federal Register about these two new regulations. According to the citation, the USPS notes that the changes are “crucial to the continued vitality of the postal system as well as the business interests of mailers” and will improve address quality “by removing incorrectly addressed pieces from subsequent mailings, which will reduce UAA mail.”

The new regulations are all about time – or more specifically, timeliness. Forty-four million annual moves equate to a typical monthly mover match rate of 1.5 percent per month. Updating only every six months can result in 9 percent of the pieces not having the current address. For First Class mailers, this means delay in delivery. For Standard mailers, this means discarding 9 percent of the pieces.

The USPS reports that Standard mail is accountable for 62.8 percent of all UAA mail volume. The change in mover update requirements will certainly result in a decrease in these percentages of UAA mail and an increase in processing costs for those using direct mail unless they were already following a more regular update discipline.