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Address systems and the future of the mail

  1. 1. Address Systems and the Future of the Mail Bernard Markowicz, Ph.D Mexico City February 2011 1
  2. 2. The Dual Role of Address Systems Improve Network Enable Direct ADDRESS & Delivery SYSTEM Advertising Mail & Operations Mailing Industry • Improved addressing by customers • Increase delivery confidence • Improved delivery • Build direct mail industry • Improved mail sorting & staging • Develop intellectual capital / revenue • Delivery point sequencing • Work sharing • Change of address redirecting • Intelligent mail & future applications Results: Improved communications and trade 2
  3. 3. The Value of a Valid Postal Address is Increasing Traditional value of standard, validated address: Reduce the number of “undeliverable as addressed” (UAA) Minimize cost of redirected, destroyed mail Enhance the average lifespan of an address (mobile society) Multiplicity of stakeholders increases the value of addresses: Increasing number of stakeholders: Cadaster, emergency management, e-gov, utilities. Increasing cost of failed postal processes (delivery, cross border returns), Integrated customer knowledge: Commerce (direct mail) is driving the value trend Drive to increase response rate (from 1% to 5%) through information integration, analytics. 3
  4. 4. Direct Mail Development Around the World Source: UPU Direct Mail Advisory Board 4
  5. 5. Direct Mail Represents a Significant Economic Force United States Canada Addressed Mail Pieces; per 602 133 household (2009) Direct mail Postage Generated; per household (2009) $126.65(1) $124.79(2) spending will Spend on Direct Mail grow 5.8% to Advertising per household, $351/y $195/y $47.8 billion in excluding postage (2007) the U.S. in 2011 Total revenues generated $5 595/y(3) $3 753/y(3) from Direct Mail Advertising (1) USPS Avg rate per piece = $0.21 (2) CPC Avg rate per piece = $0.94 (3) ROI = $11.73 of revenue per $1 spent; DMA 2009 5
  6. 6. The value of a single address in emerging economies is significant Sales Generated 3 Year NPV @8% Yearly $6,000.00 USA Per Estimated Address $5,000.00 Canada Capita HH sales NPV Sales per HH Income (3 years) $4,000.00 Sales per Capita $5 000 $400 $1 030 $3,000.00 $10 000 $900 $2 300 $2,000.00 $15 000 $1 475 $3 800 $1,000.00 $20 000 $2 100 $5 440 $0.00 $25 000 $2 800 $7 200 $0 $10,000 $20,000 $30,000 $40,000 $50,000 Yearly Income Per Capita Estimated Yearly Sales Generated by Direct Mail (per Capita and per Household) 6
  7. 7. Developments in Direct Addressed Mail Increase Response Rate Enhanced Response Technologies Rates (%) Variable data color digital Dynamic Color w/Coupon & 16.5 History printing Dynamic Color w/Purchase 6.5 Data mining and profiling History B&W Dynamic w/Purchase 2.5 Internet, online, web, e-mail History Mobile devices Color Name-Only 2 CD/DVD formats Full-Color Static 1.5 Digital Photography B&W Name-Only 1.5 Trans-Promo 1 B&W, Static 0 5 10 15 20 7
  8. 8. Information Integration and Address Systems Improve Response Rates george@yahoo.com gbrown@hotmail.com geb@gmail.com Online Purchases From 1% to 5% Store Purchase Response Rate 12045 Oak Valley Rd Manassas, VA 20108 Per Buyer Without Catalog With Catalog Dollars $224 $260 Sales 1.3 1.5 8
  9. 9. Trends in Information Integration Info to be integrated with address Marital status & age Lifestyle information such as hobbies and past product purchases Home value & household income Language spoken in the household. Mailers (and customers) want: More targeted and personal messages Capitalize on the “mail moment” Customized coupons and mini-websites based on purchasing data Integration of email, phone and mail (catalog) (QR Code, Intelligent Mail) Tracking & measurement (Intelligent Mail) Wider sale territory 9
  10. 10. Postal Operators & Governments Must Tap into the Direct Mail Commerce Potential 1 2 Encourage public-private discussions through industry Change of Address Address dialogue Validation Service Provide address validation & change of address services Encourage strong customer privacy & preference opt-in Strong Industry – Privacy Postal Adopt a “pro-commerce” Oversight Forum stance 3 4 10

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