Besides a spot for preferred name, there is a bullet to mark as well as a salutation line. When printing labels I think it takes the Salutation line instead of the preferred name line.
I may be wrong, but you might want to check that.
I have someone whose first name is Gladys, but goes by her middle name Margo. I put Margo in the preferred line as well as the salutation line.
"God does not reveal the divine will to the curious, but to the obedient."
"What Christ has been and done for me, I must be and do for others."