Meet Sophia, a millennial (a member of the generation born between 1981 and 19961) who prefers the convenience of online transactions over the face-to-face options that some older generations favor. She handles all of her banking online — and doesn't even know if there's a local bank branch. Now in her late 20s, Sophia buys her first house. She packs, moves, unpacks and stocks the fridge without ever stopping to think about updating her mailing address with the bank or U.S. Postal Service. Besides, most of what fills her mailbox these days goes straight into the recycling bin.
So when it's time for her credit card renewal, the Faithful Virtual Bank sends the updated card to her former mailing address, the last official address on record. Sophia is too busy to notice that her credit card has expired, but when she starts getting the expiration notices from failed monthly transactions, that certainly gets her attention. Meanwhile, unbeknownst to Sophia, who is growing more and more irritated with each failed transaction notice, the Faithful Virtual Bank continues to spend time and money on subsequent attempts to deliver the replacement card to the (still) wrong address — driving the cost up AND increasing the risk of fraudulent card use. To avoid any further hassles and the potential for negative impact to her credit score, she immediately moves all of her regular monthly transactions to another credit card – and just like that – the Faithful Virtual Bank lost a longtime client, all because of a missed critical customer connection that might have been sustained if return mail operations had identified and remediated the undeliverable address sooner.
Each returned piece of mail, each missed customer connection costs the organization approximately $3 per piece2 for production and postage and has an operational impact of up to $503. In addition, the cost of replacing that former customer is significant — with estimates ranging from $122 for healthcare to $303 for insurance4. Harder to quantify are repercussions such as the impact made when that dissatisfied former customer takes to social media to vent his or her frustrations, which could eventually discourage other potential customers from considering your company when they're ready to buy.
Ultimately, the long-term effects of a couple of missed mailpieces can be much more dramatic than the initial missed communication, which just goes to show it can be tough to assign a dollar value to customer connections. Even something as rudimentary as a valid mailing address can have a lasting impact on customer retention.
To discover other elements of mail handling with the power to help safeguard your customer connections and deliver a more favorable customer experience, read "Shifting perspectives: why it's time to stop looking at your mail center as an expense and start seeing it as a strategic player," our latest eBook that dispels some of the more common misperceptions around undeliverable mail.