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Keeping Track of Customers Through NCOA processing May 2004 On the surface, National Change of Address (NCOA) processing may seem like an unnecessary cost, but the consequences of skipping this step make it essential. After all, it is only required for First Class presorted mailings. So why do so many bulk mailers NCOA their list? The answer is simple. To save money and relocate customers. Many people do not want to spend the money or take the time to process a list for National Change of Address (NCOA) updating. It can slow a mailing project and can get costly. While quantity and file type are always concerns in data hygiene, NCOA processing usually costs about $350. A mailer with a large list could greatly benefit from NCOA processing in a number of ways. According to the Census Bureau, 17 percent of Americans, or 43 million people, move every year. A list of 10,000 names could expect 1,700 undeliverable addresses annually. Let's say your mail piece is valued at $.20 per piece and costs $.21 each to mail. That's $697 wasted in bad addresses that could be corrected with one simple process costing about half that. And if you include an ancillary endorsement, like "Return Service Requested", expect to pay up to $629 in return postage for this example. NCOA processing can also be used to track lost customers. In our example above, 1,700 customers moved last year. Will all of them stay loyal to your company? Probably not, if you don't relocate them. Say, on average, each customer spends $100 with your company every year. These 1,700 movers represent $170,000 in lost revenue each year. Reconnecting to just one percent of these customers would pay for NCOA updates four time over. Besides saving money in the long run, NCOA processing also helps cleanse mailing lists. Inaccurate addresses, or addresses missing a directional or apartment number will be corrected through NCOA processing if the information exists. For frequent mailers or mailers with files too large to edit, NCOA updating is an important step for a successful mailing. |
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