Health and well-being company fortifies its address hygiene efforts with GrayHair’s proprietary database of Change of Address and undeliverable records.
Most people know that Medicare is the federal program that provides guaranteed health insurance for people age 65 and over, younger people with certain disabilities, and people with life-threatening diseases. The program consists of four parts: Parts A, B, C, and D. What many people may not know is that while Parts A and B cover some health expenses, they don’t pay for everything.
This is where Medicare Supplement insurance comes in. Medicare supplement plans cover some of the out-of-pocket expenses that are not paid by Medicare. In 2015, there were 11.8 million people enrolled in Medicare supplement plans.
One of GrayHair Software’s clients, a leading global health and well-being company, relies on direct mail to acquire customers for its Medicare supplement plan. “Direct mail is the primary way in which we get Medicare supplement customers,” said the company’s marketing specialist. The company mails approximately 15 to 20 million pieces per month. During the third and fourth quarters (the company’s peak time of the year) the number is closer to 20 million pieces per month.
When the company wanted to mail to a new list consisting of 50 million records, the marketing specialist wanted to find a way to reduce costs. The marketing specialist turned to GrayHair Software, their go-to vendor of choice for postal advice and solutions.
“Direct mail is the primary way in which we get Medicare supplement customers,” said the company’s marketing specialist.
FINDING A WAY TO ENHANCE CURRENT ADDRESS HYGIENE PRACTICES
The success of the company’s Medicare supplement direct mail campaign was tied to its ability to ensure that the offering was delivered. A clean mailing list was a good place to start. The health care company was already using GrayHair to manage their standard address hygiene efforts. This consists of ACS™ (Address Change Service), which is carrier reported address changes and Nixies; change of address (COA) data; CASS™ (Coding Accuracy Support System), a USPS® program that verifies the house number, street, city, state, ZIP™, ZIP + 4®, and DPBC (Delivery Point Barcode) of an address and updates that record; and NCOA (National Change of Address), a USPS program that checks the name and address of a record against the (USPS) COA database to identify a new or undeliverable address.
Standard address hygiene was helping identify some incorrect addresses from going to print and helping to reduce some Undeliverable-As-Addressed (UAA) mail as well. However, the marketing specialist realized that this was not enough and that greater savings were possible. The company had a three-hit rule (a hit is when a mailpiece is undeliverable as addressed): a record must get three hits before it could be suppressed. “The first two hits were easy to get by running the file through NCOA,” explained the marketing specialist. Getting the third hit was the challenge.
Typically, the third piece mailed to a prospect was a 9” x 12” kit that with production and postage costs between $5 and $7. Even the less expensive tri-fold piece that was sometimes mailed to prospects costs $2 to $3. This was an expensive way to get the third hit.
Not only was it an expensive way to get the third hit, but it was also a potentially negative client-experience event. As with any list, the health care company’s list had some people who were deceased. Sending mail to someone’s deceased loved one is a way to ruin a company’s goodwill. The health company wanted to prevent this from happening as much as possible.
The company needed to find a better way to identify UAA mail without increasing costs. The marketing specialist decided to give GrayHair the opportunity to get that third hit.
TAKING ADDRESS HYGIENE TO THE NEXT LEVEL
To reduce costs by fortifying its standard address hygiene, the marketing specialist suggested using GrayHair’s Universal Address Database (UAD). UAD is GrayHair’s proprietary database of COA and Nixie records used to help correct addresses prior to mailing. UAD represents mail intelligence from over 500 million consumer records. GrayHair customers contributing to a cooperative database of records generate the UAD records through the ACS system. It enables mailers to reduce returned mail by as much as 90 percent and produces a definable ROI. Enterprise mailers have used GrayHair’s Proprietary Address Hygiene to cut as much as $2 million out of their operational budgets.
The health care company’s leadership was willing to try GrayHair’s UAD, but with a caveat: it had to be tested.
If UAD could deliver proven savings, the company would go all in.
GrayHair’s UAD Delivers Results
During the testing phase, 10 million records came back with a potential suppression hit rate of 2.7%. For the production quantity, which was estimated at 50 million records, the health company was able to suppress 545,411 records.
“There was definitely a wow factor!” said the marketing specialist. The test was a success. It proved that GrayHair’s UAD would definitely generate substantial savings.
That one use of GrayHair’s UAD on the 50 million records delivered enough savings that the company surpassed its savings goal for the year in just six months. The company saved $1.25 per piece. “This is conservative,” said the marketing specialist.
As a result of using UAD to get that third hit, the company was no longer mailing expensive pieces to the records it suppressed. “There are so much more savings, I can’t figure out a way to quantify it,” said the marketing specialist, who now wants the company to use UAD four times a year, making it a part of its standard operating procedure. “This is a no-brainer to me,” she said. For this company, GrayHair’s UAD delivered a “great” ROI: 1,791%.
“With GrayHair, you can easily save money by doing small things,” the marketing specialist said. “There are so many options to choose from.”
As significant as the cost savings are, the company experienced another benefit. As a result of using UAD, 25,000 deceased records were suppressed. “I was surprised at the quantity,” said the marketing specialist. Now, loved ones of the deceased are no longer getting unwanted mail from the health company. Said the marketing specialist, “This is a benefit besides the money. You cannot calculate an ROI for this.”
“GrayHair is great. Any question, any issue I have, GrayHair has been beyond responsive. It doesn’t make sense to not use GrayHair – Marketing Specialist – Global Healthcare Company