Approximately forty million Americans change their personal or business address every year. It is not good news for businesses that rely on direct mail for reaching their customers and employees. As people move and their contact information doesn’t get updated in business databases, companies start losing money.

It’s no secret that Undeliverable-as-Addressed (UAA) mail costs can pile up, especially if your contact database is outdated. During the 2013 fiscal year, the U.S. Postal Service reported that the costs of processing UAA mail were a whopping $1.5 billion. Fortunately, there’s a solution — the National Change of Address (NCOA) database that contains the change-of-address records, maintained by the USPS. But how correctly does NCOA work and why is it essential to any business?

NCOA — What It Is and How It Works

Upon reporting an address change to the United States Postal Service, the address gets updated in the NCOA database which keeps track of all individuals, businesses and families who have filed for an address change. Running a list of addresses that need updating against NCOA database updates will ensure your mail reaches the intended target and saves you UAA and lost opportunity costs.

To qualify for bulk mailing rates, the USPS requires the list to be NCOA certified. If you wish to use discount rates such as First Class Presort and Presort Standard, you can’t do it without NCOA.

Why Is NCOA Important for Businesses?

It may not seem like a big deal if you can’t use bulk mailing rates or if a few mailpieces don’t get delivered. However, if you do the math, you’ll get an entirely different impression. Both from a financial and marketing standpoint, you’d be throwing money down the drain. When you take into consideration that this problem is preventable, it becomes even more counter-intuitive to avoid using NCOA to update your location information. Depending on the state of your list, you could be paying a lot in UAA costs as well as losing prospects and potential customers.

Software Solutions that Use NCOA

You won’t have to worry about updating addresses with software solutions that use NCOA to check for address accuracy. Within Runner EDQ Data Enhancement services, your lists will update against NCOA, International NCOA, as well as Multisource Change-of-Address (mCOA) and Proprietary Change-of-Address (pCOA). It will catch an additional 40% of movers who didn’t report their movements to the USPS. Your lists will be automatically updated and with more than one database to check them against; you can be sure that you’re sending mail exactly where it’s supposed to go.

With current databases that integrate with the software you’re already using, you’ll have access to up to 30 years of change-of-address data. It will allow you to improve your mail deliverability, cut back on the mailing costs and ensure that your contact data is as accurate as it can be. It is especially crucial for businesses that rely on direct mail campaigns.