Welcome to the Talon Mailing & Marketing October 2004 Newsletter:
By Michael Borkan
On October 1, 2004, the United States Postal Service will launch a new replacement for NCOA (National Change of Address). The new service is called NCOALink.
At Talon we have successfully made the transition to the new NCOALink service. All NCOA work done at Talon will now be done in accordance with the new U.S. Postal standards.
What is NCOA?
Over 40 million Americans change addresses annually. Talon and The United States Postal Services' National Change of Address (NCOALink) program updates your mailing list and saves you money on mailings.
NCOALink (National Change of Address) is a process that can clean your mailing list, reduce postage and cut down on wasted materials. When individuals and companies move they fill out a change of address form at their local post office. The NCOALink program identifies records on your database that match with the NCOALink database. When a match is found the NCOALink will update your file with the new address. The database contains approximately 152 million records and 48 months of permanent address changes. Temporary moves are not recorded on NCOALink.
NCOALink allows mailers to comply with the USPS' Move Update requirement to qualify for First-Class mail automation and presort discounts.
When a mailing list is updated using NCOALink, the post office saves money by drastically lowering the number of address moves that the USPS has to forward. The post office can pass along the lower costs in the form of reduced postage on first class mail.
Why the change?
NCOALink converts new addresses to a mathematical, 11-digit representation. This new format provides service bureaus access to sensitive address data in a more convenient and secure format, while reducing USPS oversight. When Talon updates a client mailing list the 11-digit representation is converted into the new address.
How will the Changes Affect Clients?
The change over to NCOALink will not affect our clients. No changes need to be made to existing file structures or procedures. Our pricing for the new service will remain unchanged from the older NCOA service.
The week of Sept. 20 will be the last time NCOA data is provided to licensees, and Sept. 30 will be the final date for the use of current NCOA data.
Because NCOA is used prior to a mailing, it greatly reduces undeliverable mail. The Postal Service has stated that the NCOA match rate is approximately 4.1%. That means that on 100,000 record file, you can expect approximately 4,100 address changes.
Another benefit is that the NCOA will identify “moved, left no forwarding address” records. This category also includes foreign moves and PO Box closings. A study has determined that this will occur on average 0.38%. On our example of 100,000 records, on average, 380 records will be removed from the mailing list.
The third benefit of NCOA is the identification and removal of additional duplicates on a file. Let's say someone on your list moves. They call your company and get added at their new location but never explain that they moved. Once the NCOA is complete you will now have two or more records with the same name and address (the older record is changed to the new address). Our duplicate elimination software will remove all duplicates. Let's estimate that on the 100,000 record file this occurs 500 times.
Cost Savings of NCOALink:
Suppose the customer with 100,000 records does a mailing to everyone on their mailing list. In our example we have eliminated 880 records. On a first class mailing, a 5-digit barcoded presort will cost $.278 per piece in postage. If we allocate $.10 for the printing and mail preparation then the savings would be $332.64 from the elimination of no forwarding address and duplicate removals. (The cost of the NCOALink and dupe elimination would cost approximately $300).
On first class mail the post office will forward the mail up to one year. On Standard mail (formally known as third class) the post office does not forward the mail automatically. The Post office estimates that approximately 35% of NCOA changes are older than one year. On our example of 4,100 address changes, it can be estimated that 1,260 pieces will not get forwarded (4,100 - 500 duplicates that have been removed x 35% ). Again, using our postage and production cost of $.378 (postage, printing, and mail preparation) the mailer can save an additional $476.28. Combining with the 880 records eliminated has yielded a total savings of $808.92 while costing approximately $300 in data processing charges. Another benefit is after the NCOA and mailing the client has a copy of a new, cleaner, updated mailing list and $508.92 in cost savings!
By Lorrie Grant
September 26, 2004
Firms that ship need first crack at shoppers; early orders help them gauge product demand.
They're here: Christmas catalogs.
Last week -- well before Halloween, much less Thanksgiving -- holiday catalogs began landing in mailboxes in hopes of catching early-bird shoppers and getting a read on what will sell this holiday season.
Crate & Barrel, a home furnishings retailer, started its holiday pitch by sending out just under 2 million catalogs. Millions more landed from L.L. Bean, Miles Kimball, Pottery Barn and others.
All are after a slice of the $219.9 billion that the National Retail Federation forecasts consumers will spend on holiday shopping. That's a modest 4.5 percent increase from last year's $210.4 billion, growth tempered by "higher energy costs, rising interest rates, geopolitical threats and slow income growth," says NRF Chief Economist Rosalind Wells.
While the holidays might seem far away, catalogers want to get on consumers' radar early. They believe that shoppers have started thinking about gift-giving, if they aren't buying yet.
"With so many catalogs in the marketplace during this season, it's important to be able to cut through the clutter as early as possible and become a 'top-of-mind' destination with consumers," says Pamela Rucker of Discovery Channel Store, which will drop more than 1.5 million catalogs in the mail this week.
Other reasons for those early catalogs:
• Inventory help. Catalog retailers use early-season purchasing data to gauge which items they might need to reorder to have enough later in the season.
"You're more likely to see the apparel and home furnishings catalogs first, because it helps give the company an idea of demand," says Amy Blankenship, spokeswoman for the Direct Marketing Association.
• Needed cash flow. Catalogers who rely on the fourth quarter for the bulk of sales, particularly food merchants, use sales from the fall mailing to generate revenue needed to shore up holiday inventory.
"A lot of catalogs operate in the red leading up to the holiday season," says Steve Trollinger, senior vice president at catalog agency J. Schmid & Assoc.
• Shorter selling season. In-store selling can run up to Christmas Eve, but most catalog sales -- whether the order is placed by mail, phone or Internet -- are pretty much over by mid-December unless the buyer is willing to pay a big express shipping charge.
One payoff for consumers is that many catalogs will offer incentives to encourage early orders, even if the customer doesn't want the items delivered until later. Incentives range from free shipping to volume discounts to free gifts with orders over a certain amount.
Merchants sometimes sweeten benefits for shoppers who order from their catalogs via the Internet. That's to encourage adding more to their order. Consumers using the Internet on average spend less per transaction, because they tend to focus on what they want to buy and make just that purchase.
A recent study by the U.S. Postal Service and online market research firm comScore shows catalogs, in addition to generating their own sales, are a key driver of traffic for merchants' Web sites.
The study found that consumers who got catalogs made 15 percent more online transactions and spent 16 percent more with the merchant than those who did not receive catalogs.
Overall catalog sales this year from orders placed by mail or telephone are expected to hit $143 billion, up 7 percent from last year, according to the DMA. Orders from catalogs placed online are expected to be $52 billion, up 27 percent. The association does not break out holiday season results separately.
Talon would like to welcome the following new clients this month to our growing roster of clients:
· Churchill Lithography
· Tradewins Publishing
New Mailing Lists Housed at Talon (we house over 600 mailing lists)
· Pro Tools
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