Investing in file-cleansing measures up front could mean big savings down the road.

By Brian Whitelock

If you’re a fundraising professional spending a huge chunk of your organization’s precious development budget on direct mail, these figures should make you sleep a little less soundly tonight.

According to the U.S. Postal Service:

An average of 40 million address changes are registered on the National Change of Address database annually.

30 percent of all mail contains address errors.

Almost 10 percent of all mail pieces have incomplete or incorrect directional/suffix values.

More than 5 percent have missing or invalid street names and/or numbers.

An additional 5 percent have incorrect ZIP codes.

And another 5 percent are missing an apartment number or rural route box number.

With their continued increases, postal rates can represent the greatest cost to a mailer’s campaign. So it’s become even more important to keep your data standardized, and to update or eliminate non-deliverable addresses. Many mailers dedicate much of their time to finding ways to reduce their final price per mailed piece. But between negotiating net name arrangements with brokers for list rental and tailoring the creative portion of the piece to minimize production and printing costs, hygiene might get overlooked as one of the most effective ways to cut significant waste.

It doesn’t take very long to consider the quantities and cost per piece of your last mailing and apply the statistics above to figure how significant a savings you might realize by eliminating that segment of non-deliverable records.

For example, if you were to rent 100,000 names from various sources at an average cost of $90 per thousand and an average net arrangement of 85 percent, your budget dedicated to just the list rental would be $7,650. After duplicate elimination and suppression based on information compiled by the Direct Marketing Association, you might be left with roughly 80,000 unique names based on averages we’ve seen on mailings from many nonprofit groups and lists. To illustrate what some of these averages equate to in wasted dollars for your campaign were you to forgo postal processing, you could assume a conservative 10 percent to 15 percent of non-deliverable names — or 8,000 to 12,000 pieces based on this universe. The cost of those rental names would have been $720 to $1,080, and assuming that the combined creative, printing and postal costs came in at 75 cents per piece, there would be an additional loss of $6,000 to $9,000 for those packages.

Considering that many programs incur higher per-piece costs, the numbers can be even more staggering, not to mention the lost opportunity to use those budgeted dollars on mailable records that could become newly acquired donors — all of which could have been avoided with an investment of what usually amounts to a few dollars per thousand on list hygiene.

You might not know …
Many nonprofits are familiar with NCOA but are unaware of some of the specifics of the most updated NCOA database, as well as some of the ancillary postal processing that currently is available. In fall 2004, the USPS modified and updated its NCOA database to offer information on people who’ve moved in the last 48 months. Certainly this is a valuable tool to consider when renting prospect lists from numerous sources where standards of hygiene could vary greatly among each list owner/manager. Additionally, the four-year window allows an organization the opportunity to reach some of those older, lapsed donor segments that would have a greater occurrence of outdated information and to renew their value by targeting them with a more current program.

Other available and sometimes overlooked services include the Locatable Address Conversion System, which could prove invaluable to many mailers, particularly those appealing to potential donors in rural areas. LACS has been established to convert older, rural-style addresses to more updated street-style addresses consisting of a street number and street name. When an address has been changed, the former rural-style address will receive mail for an additional 12 months, but after that period the USPS considers any piece mailed to the old address as undeliverable. There currently are more than 6 million of these addresses on the LACS database, and it’s reported that the number can grow to more than 9 million. This processing is not automatically included in NCOA processing but can be requested as an additional service.

Not just mail
The value of these address-standardization and -updating offerings also can help an organization running a telemarketing campaign. As a vendor of both postal processing and phone appending, we’ve seen examples of considerable increases in matching phone numbers to records that have gone through postal processing prior to the appending or verification process. In many cases this increase in matched phones can be in double-digit percentages. Considering the cost per thousand involved with the rental of a prospect file and potential waste in paying for those unmatched records, the fractional costs of additional postal processing more than pays for itself.

Giving some more consideration to the quality of your data, be it a housefile or rented prospect list, generally involves making a small investment as a percentage of your total program and can both increase the number of your targeted donors and reduce the costs tied to the waste you may have experienced with prior campaigns.

Brian Whitelock is the vice president of Reston, Va.-based Precision Data Management.