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Who is the “Current Resident”, anyway?

Our CEO received an extremely heavy, expensive-looking catalog in the mail the other day, from an upmarket retailer and addressed to a previous occupant of his house “Or Current Resident”. When you receive catalogs in the mail that are addressed to the previous homeowner or the “current resident”, do you read them or toss them? Obviously the company hopes that anyone who receives a catalog at this address will more than likely take a gander at what’s being offered.
But is this a cost-effective supposition? When you consider the resources wasted on shipping a catalog to anyone that lives at a particular address, you have to wonder whether this is a smart strategy or just a cop out from cleansing a database.

Using address verification software which includes the National Change of Address (NOCA) service would help catalog senders increase their return on investment by updating their databases as frequently as needed. The NCOA service would ensure that databases are updated with the customer’s current address information, or warn of deceased or moved customers who did not give a forwarding address.

NCOA relies on the customers filling out a Change of Address form, and the USPS internal databases which keep track of customer information, which it then relays to the NCOA service. Rather than make use of NCOA data, many companies add “Or Current Resident” to the name from their databases, as the most timely and least expensive method of allowing that the addressee may no longer be there.

Set against the convenience of this tactic, these factors should also be considered:

  • The expense of shipping items to an old address
  • The much reduced chance of the new resident making a purchase
  • Losing track of a past customer
  • Alienating the new mail recipient

But does the NCOA process take that much time, or add to the expense of the mailing? Well, the answer is “no” on both counts! A whole spectrum of NCOA options is available, from desktop software that can be used by marketers, and software integrated into the corporate database (both contacting an NCOA service under the hood) to online bureaus who take your data and return the updated file a few hours later. The cost depends on data volumes, but even if you only have a few thousand records in your mailing file, you can always find an option that saves you money compared with print and mail costs – especially if your catalog is bulky.

Sending catalogs to the “current resident” might sound like easy advertising, but it doesn’t deliver return on investment for the costs of printing and mailing and it doesn’t help your brand. It really is easy and much smarter to keep track of customers with NCOA services, stop shipments to non-existent customers and even save money to reinvest in other positive, more effective marketing efforts.

UK Regulatory Pressure to Contact Customers Increases

In recent weeks, UK government and financial services organisations have received increasing political and regulatory pressure to make greater efforts to proactively notify policy holders and account owners of their rights and savings information. To avoid the threat of regulatory fines, organisations have quickly prioritised data quality initiatives to the top of the list but in reality, the benefits of data suppression and enhancement go far beyond avoiding fines and in fact will make for stronger business models, more trustworthy brands and better customer service.

What’s New

A report in July by the House of Commons Public Accounts Committee quoted Treasury estimates that from 200,000 to 236,000 victims of the collapse of Equitable Life may miss out on compensation payments because it may not be able to trace between 17%-20% of policyholders by that date. The committee urged the Treasury to take urgent action to track down as many former policyholders of the failed insurer as possible (many of whom are elderly) before the March 2014 deadline. Payments totalling £370 million are due to be made by that date.

More recently still, there has been discussion of the huge number of interest rate reductions affecting savers without them being notified – banks and building societies last month announced a further 120 cuts to rates on savings accounts, some as high as 0.5%, on top of 750 made to existing easy access accounts this year. According to the Daily Telegraph, “around 17 million households are believed to have cash in an easy access account”.  While savings providers are able to make cuts of up to 0.25% without notifying customers, a spokesman for the regulator, the Financial Conduct Authority (FCA), told The Telegraph that “it is keeping a close eye on the activity of banks as the blizzard of rate reductions continues.”

Case in Point

To avoid the risk of potentially massive future penalties, a variety of organisations have taken up the challenge of contacting large numbers of customers, to provide the requisite communication. In fact, a financial services organisation which was recently advised by the FCA to make reasonable efforts to contact all its customers, retained a helpIT client to run a suppression job which netted significant savings: of the initial mailing file consisting of over seven million customers, half a million new addresses were supplied, half a million gone aways were removed and over 200 thousand deceased names suppressed. In this instance, the actual and potential savings for the organisation were enormous and went well beyond the cost of non-compliance – to say nothing of the savings to brand reputation in the eyes of new occupants and relatives of the deceased.

Easy Options

Fortunately, the right software makes it easy to compare customer data to an assortment of third party suppression files in different formats, keyed according to different standards. In fact, huge savings can be achieved by employing standard “gone away” and suppression screening, as well increasing the success rate in contacting old customers by finding their new addresses. While there used to be only a couple of broad coverage “gone away” files, these days there is a wealth of data available to mailers to enable them to reach their customers, going far beyond Royal Mail’s NCOA (National Change of Address) and Experian’s Absolute Movers lists. This “new address” data is in many cases pooled by financial services companies via reference agencies such as Equifax (in the reConnect file) and by property agencies via firms such as Wilmington Millennium (Smartlink). Similarly, deceased data is now much more comprehensive and more readily available than ever before.

New address, gone away and deceased data is also easy to access, either as a web-based service or downloaded onto the organisation’s own servers. Costs have come down with competition, so it’s certainly cheaper now to run gone away and deceased suppression than it is to print and mail letters to the “disappeared”.

Although it is never going to be 100%, data and software tools do exist to make it easy for the organisation to take reasonable steps to cost-effectively fulfil their obligations, even on names that might be considered low value, that an organisation might ordinarily have forgotten about.

Bottom Line

These numbers should give pause for thought to organisations of any type that are tempted to “spray and pray” or decide to keep silent about something their customers would really like to know about, regardless of regulation. What’s more, the value to the business, the customers and the brand goes far beyond the regulations with which they need to comply.