Automation is the Answer to the UAA Problem
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1 Automation is the Answer to the UAA Problem Jane Sinkko, 26 years in Mailing Industry Product Manager, Client Service Manager, Trainer Industry Speaker Return Mail Jeff Stangle 16 years in Mailing Industry Product Manager, Six Sigma Black Belt, Innovation Development Industry Speaker Address Quality 1
2 Workshop Overview Return Mail Impacts to the USPS and the Industry UAA Trends Business Impacts Productivity Profitability Compliance (USPS & Industry) Client Relationships How to move from manual to automation Automated options Secure Destruction In house vs. Outsourcing UAA Impacts to the USPS and the Industry Over 6.6 billion mail pieces processed by the USPS in FY2016 were Undeliverable As Addressed. This comprised 4.2% of their total processing volume during the year. Cost to Mailers is estimated at $20 billion annually according to an Office of Inspector General (OIG) study* in 2015 (approx. $3/piece) Driving forces of UAA Mail Approximately 16-18%% of the country moves each year Only 60% of those movers file a COA record with the USPS Strict Matching Logic Misses Moves Some don t want to be found 76% of UAA Mail is Directly Related to Moves * library files/2015/ms ma pdf 2
3 UAA Trends The good news UAA mail is decreasing The bad news the cost per piece is increasing USPS First Class Mail UAA stats Total UAA Cost (000) Volume (000) Unit Cost FY2013 $ 789,957 2,444,872 $0.323 FY2014 $ 778,003 2,378,112 $0.327 FY2015 $ 785,976 2,392,737 $0.328 FY2016 $ 780,393 2,351,130 $0.332 The good news there is a lot more transparency regarding the impact of UAA e commerce Compliance with industry specific regulations Customer Experience / User Experience (UX) The bad news Solutions are more complex Automation solutions Data centric solutions No more low hanging fruit Workshop Overview Business Impacts Productivity Profitability Compliance (USPS & Industry) Client Relationships 3
4 Productivity Working UAA Mail is a very manual process Using internal processes, most companies receive approximately a 25% uplift in address data working UAA Mail internally UAA is typically worked when there is time Measuring productivity is difficult and manual Skip tracing is time consuming and costly Industry regulations have an impact on manual processes Profitability The Cost of Undeliverable as Addressed (UAA) Mail Postage Cost Printing Cost Lost Revenue Lost Opportunities Impacts to Cash Flow Damage to the Client Relationship Operation cost per piece, including postage and printing, handling, research, re mailing and related processes. Total cost factors Delayed and lost revenue Return Mail Transactional Cost Non Compliance risk. (USPS and Industry) Pitney Bowes February 2017 This bottom image is really blurry, can you recreate? 4
5 How Valid is an Address? In Reality How Valid is an Address? 5
6 UAA Compliance While the USPS is the recognized standard for quality of address record integrity, multiple governing agencies are starting to oversee Name and Address information Data generated in returned mail is becoming more valuable: 1. It is a trigger that something is wrong with the communication process. Since communications are not being received the company may be in jeopardy of violating government regulations. 2. The data on returned mail can be used to repair a customer record, fixing the communication process and mitigating the impact regulations can have on a company. Regulations enforcing name and address record quality USPS Mailing Regulation Standards / Move Update Patriot Act credit offers required to go to a known physical address SEC 17AD 17 return mail triggers a Lost Security Holders process HIPAA Medicare/Medicaid Eligibility Enrollment and Disenrollment AML Anti Money Laundering Basel II & III requires global financial companies to maintain accurate customer records UAA Compliance in Action SEC Regulation Rule 17AD 17 Designed to reduce the number of lost security holders (i.e. beneficiaries that do not claim life insurance policies). A security holder is considered lost if ANY correspondence from a broker / dealer or transfer agent is returned by the USPS due to an undeliverable address. Required Action: Mailer has a one time option to re mail before flagging the security holder as lost. If the record cannot be updated within the specified timeframes (0 3mo), the company is required to send name and SSN to a 3rd party to try to obtain updates. Full details pdf 6
7 UAA and the User Experience (UX) Today, more than ever, customers are demanding delightful experiences that are easy to use and anticipate their needs. It s not just retail stores that are being affected by this shift in consumer expectations; other industries, such as real estate, banking, even healthcare, are all undergoing a rapid transformation to a more welldesigned user experience. Every $1 invested in UX yields $2 $100. Source Postcode Anywhere Workshop Overview How to move from manual to automation Automated options Secure Destruction In house vs. Outsourcing 7
8 Automated Options Secure Destruction with the USPS Address Correction Service (ACS ) Outsourcing to a Mail Service Provider In house automation of UAA Mail Optical Scanner Optical Character Recognition Software (OCR) Is there a Roadmap to Secure Destruction? Fact returned mail is not a new problem. Many companies have something in place to manage it today If managed correctly, returned mail should diminish to a point where it doesn t make sense to perform the operation manually. The USPS s Secure Destruction program is designed to reduce physical returned mail. Most best practice companies are following Secure Destruction MTAC, PostCom, PCC, MSMA Build a roadmap to effective / compliant Secure Destruction. The solution you have today may not be justified tomorrow Most mailers are aware there are discrepancies between physical return mail, ACS, and Secure Destruction scan data. They are looking to the experts to help. Eventually Secure Destruction needs to be approved by internal Compliance with a solid plan about how undeliverable records will be maintained. 8
9 In House Challenges Operational Costs Technology Resources Process knowledge Equipment expenses Automating a process Manpower Resources Dedicated Resources Out Sourcing A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally 5 Decisions to Consider 1. Is the task at hand a primary service or offering from your business? 2. Is there a competitive advantage to do it in house 3. Is it a specialized service you don t need to handle full time? 4. Is it a commodity something someone else can do better and more efficiently? 5. Are the costs of the service lower than what it would take in time and manpower to get it done in house? alter/small business strategy when to outsource.html 9
10 Automation and Data Analytics Physical Mail Data to Digital Data Size of Digital Data Data Security Data Storage Cloud Technology Analytical Teams Please fill out the workshop evaluation form on your way out. 10
11 About Pitney Bowes For almost a century, Pitney Bowes has been a leader in mailing and shipping, driving innovation and shaping the modern mailing industry. Today, we are reinventing mail with physical and digital solutions that power global commerce. We are Craftsmen of Commerce. We help more than 1 million clients in approximately 100 countries around the world meet the challenges they face in the areas of mailing and shipping, global ecommerce, location intelligence, customer engagement and customer information management. For more information, please visit Thank You! For additional information from speakers Jane Sinkko jane.sinkko@pb.com Jeff Stangle jeffrey.stangle@pb.com 11
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