Reduce Your Return Mail Reduce Your Return Mail by One Third!by One Third!

National Postal ForumNational Postal ForumNashville TN — March 20–23, 2005Nashville TN — March 20–23, 2005

Jan Caldwell, Address ManagementJan Caldwell, Address ManagementSharon Harrison, SBCSharon Harrison, SBCLiz Weber, Capital OneLiz Weber, Capital One

ADDRESS QUALITY OPPORTUNITIESADDRESS QUALITY OPPORTUNITIES

Customer Contact with Business

Customer Address Changes

Business Generates Mail

Business Enters Mail

USPS Accepts Mail

USPS Processes Mail

USPS Delivers Mail

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Reduce Your Return Mail Reduce Your Return Mail by One Third!by One Third!

Sharon Harrison, SBCSharon Harrison, SBC

SBC COMPANY OVERVIEW

SBC - Global Telecommunications Company

Mailing 30M+ Customer Bills each month

Two Mail Manufacturing Facilities

• West Sacramento & Houston

Annual USPS Postage from SBC = 125M+

REDUCE YOU RETURNED MAIL BY ONE THIRD

Reduce undeliverable-as-addressed (UAA) mail to ensure customer bills are delivered accurately & timely!

Ensure bill mailing address is compliant to USPS addressing standards to reduce cost and improve deliverability.

QUALITY ADDRESSING GOALSREDUCE YOU RETURNED MAIL BY ONE THIRD

RESOLVING THE PROBLEM

SBC Quality Studies defined:

Need to get the correct address at the front-end of the process!

Improve 30% of addresses during initial capture on front-end ordering validation system using CASS/DPV (USPS certified systems)

Coding Accuracy Support Systems

Delivery Point Validation

REDUCE YOU RETURNED MAIL BY ONE THIRD

DEFINED OPPORTUNITY

Reduce calls to/from business offices

Reduce calls to/from collection offices

Reduce mailing (postage, material, production) costs for products mailed

Improve postage discounts on address match

Reduce cost for returns managed

Improve cash flow

Meet USPS address standards/requirements

REDUCE YOU RETURNED MAIL BY ONE THIRD

ADDRESS IMPROVEMENT STRATEGY/ PROCESS

1. Track the amount of returned mail received

2. Determine average return rate for industry

3. Identify percentage match rate for CASS

4. Obtain support from company Quality Teams

5. Evaluate reasons for mail returned using internal sources/USPS data

REDUCE YOU RETURNED MAIL BY ONE THIRD

ADDRESS IMPROVEMENT STRATEGY/ PROCESS

6. Perform follow-up study (90 days later) to evaluate total business impact

7. Document customer impact (disconnects, additional calls, loss of customers, etc.)

8. Identify business cost/savings with reduced calls, customer impacts, mailing costs, etc.

9. Identify solutions for incomplete/inaccurate addressing with front-end validation

REDUCE YOU RETURNED MAIL BY ONE THIRD

ADDRESS IMPROVEMENT STRATEGY/ PROCESS

10. Evaluate address fields/lengths to ensure space to support validation results

11. Evaluate technology solutions and identify potential cost

12. Identify business savings opportunity

13. Obtain Executive Management and Financial Teams support to evaluate business opportunities and savings to approve plan

REDUCE YOU RETURNED MAIL BY ONE THIRD

ADDRESS IMPROVEMENT STRATEGY/ PROCESS

14. Develop a technology model for validating address data - ensure override capability for new addresses not yet defined

15. Ensure representatives are trained to ensure optimal performance of tool for deployment

16. Evaluate performance once deployed to ensure returned mail reductions

REDUCE YOU RETURNED MAIL BY ONE THIRD

CHALLENGES

Multiple organizations impacted across SBC

Size and scope of SBC systems to modify field length changes

CASS/DPV functionality not separated

Ordering system screen limitations

Multiple legacy systems/applications with non-centralized customer database and data feeds

Interfacing with outsourced systems

New/emerging systems

REDUCE YOU RETURNED MAIL BY ONE THIRD

MEASURING SUCCESS

Returned mail volumes - reduced over 30%

Improvements in CASS matching

Reduction of mailed pieces

Reduced customer calls & complaints

REDUCE YOU RETURNED MAIL BY ONE THIRD

Capital One, USPS, and ACSCapital One, USPS, and ACSChange Service Requested – Option 2Change Service Requested – Option 2

Liz Weber, Capital OneLiz Weber, Capital One

Capital One began using Change Service Requested in Sept ’03 when we entered into an NSA with the USPS

Due to our large 1st class volumes, Capital One has proportionately large return mail volumes

Without the Change Service Requested endorsement 1st class UAA pieces are required to be physically returned to the mail owner

Prior to the NSA we have always captured our physical returned pieces

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Continue…

Change Service Requested – Option 2: This endorsement is an indicator to the USPS to

capture the mailpiece return information electronically

Thus allowing for the USPS to destroy those physical mailpieces as opposed to transporting them back to Capital One

If it is a COA record the mailpiece is forwarded to the new address on file

An ACS COA notice is provided back to Capital One with the new address

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

We tested into Change Service Requested prior to the full implementation of the NSA

Initial testing showed electronic return rates lower than what was expected

Capital One partnered with the USPS to diagnose potential causes

The USPS created training documentation for the field to ensure proper handling of all Capital One 1st class return mail

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Continue…

Capital One created internal training documentation around the production elements to ensure proper formatting on all our 1st class mailpieces

Additional testing performed with an adapted endorsement to improve electronic return percentages

Mutual reporting shared on a monthly basis identified differences in capturing the return percentages

Electronic Return Percentages moved from 60% to 85%

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Return mail volumes declined significantly from ’03 to Return mail volumes declined significantly from ’03 to ’04 despite an initial spike in return volumes in early ‘04’04 despite an initial spike in return volumes in early ‘04

Early ’04 testing with an adapted endorsement failed, which initially increased our physical return mail volumes

Even with that increase in return mail we still achieved an overall decrease in the amount of mail being returned

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Continue…

COA Records updates account for much of that decrease

Prior to our implementation of ACS we did not have insight into the mail which was forwarded

With this implementation, COA information is sent to Capital One on a daily basis and our system is updated in real time

This allows us to make the next contact with that potential customer in a more timely manner

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

100.00%

69.40%

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2004

Return w/COA

Return w/out COA

Return Mail 2004

*Return with COA data indexed to 100

There is a wealth of information when you have There is a wealth of information when you have access to the COA data…..access to the COA data…..

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68.00%

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Postage Spend

2003

2004

Return Mail Postage Spend Comparison

*2003 data indexed to 100

…….as well there is a significant reduction in .as well there is a significant reduction in postage spend when applied appropriately. postage spend when applied appropriately.

In addition to mailing more efficiently we have achieved In addition to mailing more efficiently we have achieved other savings other savings

The returned physical pieces sent to our return mail supplier has decreased substantially, creating an operational savings of $1MM

We have been able to use this data to create a suppression strategy based on the nixie codes received thus creating additional savings

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Continue…

Additional benefits:

Real time data - A file is pulled on a daily basis and loaded into a Capital One database

Fresh address data

Additional analysis opportunities

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

The implementation of ACS has been mutually The implementation of ACS has been mutually beneficial to the USPS and Capital One beneficial to the USPS and Capital One

Partnering with the USPS early on in the process allowed for a successful rollout

Monitoring performance on a monthly basis, has steadily increased performance

Savings have been realized by Capital One through the use of the data

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

Continue…

The data has also allowed Capital One to invest postage $ more efficiently

The USPS has been able to cut transportation costs by not having to physically return those UAA mailpieces

CAPITAL ONE, USPS, AND ACS CHANGE SERVICE REQUESTED – OPTION 2

QuestionsQuestions

www.usps.comwww.usps.comwww.usps.com/ncsc www.ribbs.usps.govwww.usps.com/ncsc www.ribbs.usps.gov

Customer Care: 1-800-238-3150Customer Care: 1-800-238-3150

Thank You!Thank You!