Service Bureau Operations

Purpose: Explain what service bureaus do, with focus on merge/purge and mail production.

What is a Service Bureau?

A service bureau (also called a mail house or lettershop) is a third-party facility that handles the physical production and mailing of direct mail campaigns. They bridge the gap between data/creative and actual mail delivery.

Core Functions

┌─────────────────────────────────────────────────────────────────────────┐
│                         SERVICE BUREAU                                   │
├─────────────────────────────────────────────────────────────────────────┤
│                                                                          │
│   DATA PROCESSING          PRINT PRODUCTION          MAIL PREPARATION   │
│   ───────────────          ────────────────          ────────────────   │
│   • Merge/Purge            • Digital printing        • Inserting        │
│   • NCOA processing        • Offset printing         • Tabbing/sealing  │
│   • CASS/DPV               • Personalization         • Labeling         │
│   • Address hygiene        • Variable data           • Sorting          │
│   • Deduplication          • Bindery                 • Postal prep      │
│                                                                          │
│                         POSTAL LOGISTICS                                 │
│                         ────────────────                                 │
│                         • Presort optimization                           │
│                         • Entry point selection                          │
│                         • Commingling                                    │
│                         • Drop shipping                                  │
│                                                                          │
└─────────────────────────────────────────────────────────────────────────┘

Merge/Purge Process

Merge/purge is the process of combining multiple mailing lists and removing duplicates and unwanted records. It’s critical for cost savings and campaign effectiveness.

Why Merge/Purge Matters

Without merge/purge:

• Same person receives multiple identical pieces (wasted postage)
• Existing customers receive acquisition offers (wrong message)
• Deceased and moved individuals receive mail (waste + bad optics)
• Suppression violations occur (compliance risk)

With merge/purge:

• Each person receives one piece
• Customers and prospects are handled appropriately
• Bad addresses are removed
• Compliance requirements are met

The Merge/Purge Process

Step 1: DATA INTAKE
────────────────────────────────────────────────────────────
House File ─────────┐
Rented List A ──────┤
Rented List B ──────┼──▶  Combined Input File
Rented List C ──────┤
Co-op File ─────────┘

Step 2: DATA HYGIENE
────────────────────────────────────────────────────────────
Combined File ──▶ NCOA ──▶ CASS ──▶ DPV ──▶ Standardized File
                   │        │        │
                   │        │        └── Delivery point validation
                   │        └── Address standardization
                   └── Change of address updates

Step 3: MATCHING & DEDUPLICATION
────────────────────────────────────────────────────────────
Standardized File ──▶ Match Logic ──▶ Identify Duplicates
                           │
                      Name + Address
                      Name variations
                      Household matching

Step 4: PRIORITY ASSIGNMENT
────────────────────────────────────────────────────────────
For each duplicate set:
├── House File wins (always)
│   └── Best RFM segment within house file
├── Then rented lists by performance ranking
└── Then co-op names

Step 5: SUPPRESSION
────────────────────────────────────────────────────────────
Apply suppressions:
├── DNM (Do Not Mail)
├── Deceased
├── DMA Pander File
├── Prison addresses
├── Client-specific suppressions
└── Competitor employees (if applicable)

Step 6: OUTPUT
────────────────────────────────────────────────────────────
                    ┌── Hits Report (duplicates found)
Deduplicated ───────┼── Nets by Source (unique names per list)
Mail File           ├── Multi-buyer File (appear on multiple lists)
                    └── Final Mail File (ready for production)

Key Outputs

List Priority Rules

Priority determines which source “owns” a duplicate name:

1. House File First: Your customers always take priority

   • Within house: Best RFM segments at top
   • Prevents customers from receiving acquisition offers

2. Rented Lists by Performance: Best-performing lists get priority

   • Based on historical response rates
   • Higher-performing lists “keep” more of their names

3. Co-op Names Last: Fill in with co-op after rented lists

Why Priority Matters:

• Determines which list gets credited for a name
• Affects final net counts and list rental costs
• Impacts response attribution and future decisions

Multi-Buyers (Multis)

Names appearing on multiple input lists are called “multi-buyers” or “multis.”

Why Multis Matter:

• Higher response rates: People on multiple lists are proven buyers
• Premium segment: Often mailed as a separate, higher-priority group
• List evaluation: High multi-hit rate suggests good list synergy

Example:
  John Smith appears on:
  ├── House File (customer)
  ├── Rented List A (purchased from them)
  └── Rented List B (purchased from them)

  Result: John is a multi-buyer, assigned to House File,
          Lists A and B show him as a "hit"

Data Hygiene

NCOA (National Change of Address)

USPS database of address changes for people who have moved.

• Lookback: Typically 48 months
• Updates: Weekly from USPS
• Result: Updates old addresses to new addresses

CASS (Coding Accuracy Support System)

USPS certification for address standardization.

• Standardizes: Street names, abbreviations, ZIP+4
• Adds: Delivery point codes
• Required: For postal discounts

DPV (Delivery Point Validation)

Confirms address is actually deliverable.

• Validates: Address exists and receives mail
• Flags: Vacant, no mail receptacle, etc.
• Prevents: Mailing to invalid addresses

Deceased Suppression

Removes deceased individuals from mail files.

• Sources: Social Security Death Index, proprietary databases
• Updates: Monthly or more frequent
• Purpose: Avoid mailing to deceased (wasteful, insensitive)

DMA Pander File

Direct Marketing Association’s opt-out list.

• Content: Consumers who requested no mail
• Compliance: Industry standard suppression
• Updates: Quarterly

Lettershop Services

After merge/purge, the lettershop handles physical mail preparation.

Print Production

Mail Assembly

Personalization

Turnaround Times

Working with Service Bureaus

What Mailers Provide

• Mail files (from merge/purge or co-op)
• Creative files (print-ready PDFs)
• Personalization specifications
• Postal class and entry preferences
• Drop date requirements

What Service Bureaus Deliver

• Printed and assembled mail pieces
• Postal reports (piece counts, postage)
• Delivery to USPS
• Proof of mailing documentation

Selecting a Service Bureau

Consider:

• Capabilities: Equipment, volume capacity, specialties
• Location: Proximity to postal entry points
• Turnaround: Speed and reliability
• Quality: Print quality, error rates
• Pricing: Competitive rates, transparency
• Security: Data handling, facility security

Related Documentation

• Direct Mail Fundamentals - Industry overview
• Postal Operations - USPS discounts and optimization
• Path2Acquisition Flow - Where merge/purge fits in Path2Response flow
• Glossary - Term definitions