In January 2012, Canada Post will introduce new address accuracy requirements for commercial mail within Canada. The new requirements will mean that a typical mailing list will see a small increase in records that are identified as ‘invalid’ and therefore undeliverable.
Invalid addresses need to be removed from your database or you will pay the postage for mail that will never be delivered. Furthermore, if the address accuracy rate on your list drops below the 95% you will also pay a postage penalty.
To check for undeliverable addresses you can run address correction on your mailing list, a service which is already required by Canada Post on any mailings over 5,000 pieces (and which we routinely run for our clients).
Why will I get more invalid addresses?
Previously, address correction software could only check for a range of addresses, meaning that if house numbers on Main Street started at 1000 and ended at 1999 then any house number that fell within that range would be processed as valid, even if the physical address did not actually exist.
Changes to Canada Post’s database have made it possible to check for valid addresses down to the individual household. So now address correction software will know, down to the house or unit number, whether an address actually exists.
How does this affect my direct mail?
As stated above, in January your list will likely see a small increase in the number of undeliverable addresses found when running address correction. Databases with a large number of apartments will likely see the greatest increase, since Canada Post was previously not able to verify individual apartment numbers. There are two important implications that impact your direct mail:
1. Better Visibility of Undeliverable Addresses
Undeliverable mail negatively impacts your ROI because most undeliverable Addressed Admail is recycled by Canada Post at the delivery end. It does not get returned to the sender. Many mailers have no idea how many of their pieces are being recycled. Now you will be able to identify and remove a greater number of invalid addresses, resulting in increased deliverability and higher response rates.
2. Postage Penalties
Some mailing lists may see accuracy rates fall below 95%. If the bad addresses are not updated or removed a penalty will be applied, increasing the postage costs for the entire job.
Sorry, I’m not a Canada Post expert, what does address correction do again?
Address correction does the following:
1. Formats your mailing list so that commas, periods, abbreviations, spacing etc. are all in the accepted Canada Post format.
2. Updates and corrects records with missing or incorrect postal codes. In some instances it will also add or correct the street name.
3. Identifies records that do not have valid or complete addresses and that cannot be updated. Left unchanged, these records will be undeliverable, meaning that if you don’t remove them from your list they will not be delivered and you will still pay postage and processing costs.
Do I still need to run NCOA if I’m already doing Address Correction?
Yes. NCOA (National Change of Address) is not related to address correction and should be run as part of regular data hygiene, as it targets a person, not a physical address. Address Correction verifies the validity of a physical address, regardless of whether you customer still lives there or not. Canada Post reports that nearly 20% of Canadians move each year and they recommend running NCOA twice a year for active lists.
