Page 1

WHAT TO SEE AT

GRAPH

EXPO! Page 26

ANNUAL WAGE & OPERATIONS

SURVEY RESULTS Part One! SEPTEMBER - OCTOBER 2011 www.MailingSystemsTechnology.com

From Incomplete Addresses to Mail Redirection — Some of the Latest Advancements in Recognition Technology Page 24

IMb Update: The Current Numbers Page 14

CLOUD COMPUTING and its role in the mailing industry Page 22


Volume 24 Issue 5

September - october 2011

Features 18

A Light at the End of the Tunnel? While still light years away from the mailing industry of yesteryear, things are getting better compared to our 2010 results. By Amanda Armendariz

18

22

Cloud Computing – Keeping Up with Changing Times How the mailing industry can use this technology to our advantage By Josh Evans

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From Incomplete Addresses to Mail Redirection some of the latest advancements in recognition technology By Dr. Tatiana Vazioulina

22 Departments

Columns

8

6

Real-Life Management mentoring — our passport to building a Lasting Legacy

24

10

Software Byte time for a New transformation plan

12

Editor’s Note so, What’s Next?

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What to See at Graph Expo!

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Reality Check the Next “What’s Next?”

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Pushing the Envelope the Future of the postal service

The Trenches Yes, You cAN be too perfect!

13

Postal Affairs Adding Value to every Door Direct mail

14

Everything IMBC mtAc Update: current Imb Numbers

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Ship It trying to Lower shipping costs but Getting Nowhere?

[ PLUS ] 4

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Make sure you sign up for our monthly e-Newsletter so we can keep you posted with news alerts and updates! www.MailingSystemsTechnology.com


editor’s note

with Amanda Armendariz

Mailing systems technology PUBLISHER Marll Thiede

EDITOR

So, What’s Next? As we head into the fall season, there seems to be a sense of uneasy anticipation among mailers. For many of us, the situation with the USPS is at the forefront of our minds — at least during the workday. After all, when your career and livelihood depend, in some way, on the mailing industry, the thought that the biggest player (or really, the only player) in the game could fail is rather disconcerting. And it seems that fear is not too far off. The USPS anticipates it will run out of cash at the end of September. It will not be able to make the required $5.5 billion prefunding payment into the Retiree Health Benefits Fund, as directed by law. And mail volumes continue to drop. Sounds dismal, right? Well, in a way, it is. The USPS is going to have to make some massive changes — to its infrastructure, its digital strategy and its business model — if it plans to be around in the future. But, with that being said, things are looking up slightly, at least according to our survey respondents. The economy isn’t impacting operations nearly as much as it did last year, and wages for certain staff positions are actually on the rise. Perhaps most encouraging is the fact that a good portion of our respondents said that their operations would actually be hiring more people in 2012. If that’s not a good sign, I don’t know what is! And speaking of our survey, thanks to everyone who responded; your input gives us a great overall view of the state of the mailing industry. Part 2 will appear in the November/December issue, so be on the lookout for that survey and take a couple minutes to answer that, as well. We’d love to hear from you on other matters, too. Join our LinkedIn group, follow me on Twitter, or shoot me an email and let me know your thoughts. As always, thanks for reading Mailing Systems Technology.

Amanda Armendariz amanda.c@rbpub.com

CONTRIBUTING WRITERS Kevin Conti, Josh Evans Wes Friesen, Jim LeRose Christopher Lien, Kim Mauch, Kate Muth Mike Porter, David Robinson Wanda Senne, Tatiana Vazioulina

CIRCULATION

Rachel Spahr rachel@rbpub.com

ADVERTISING 608-241-8777 Ken Waddell ken.w@rbpub.com

GRAPHIC DESIGN Kelli Cooke

2901 International Lane • Madison WI 53704-3128 608-241-8777 • Fax 608-241-8666 rbpub@rbpub.com www.MailingSystemsTechnology.com

Volume 24, Issue 5 Subscriptions are free to qualified recipients: $20 per year to all others in the United States. Subscription rate for Canada or Mexico is $40 per year, and for elsewhere outside of the United States is $45. Back issue rate is $5. Send subscriptions to: Mailing Systems Technology, PO Box 259098, Madison WI 53725-9098; or call 608-241-8777; fax 608-241-8666; e-mail rbpub@rbpub.com or subscribe online at www.MailingSystemsTechnology.com. For high-quality reprints, please contact our exclusive reprint provider. Scoop Reprint Source 800.767.3263 ext. 144 www.scoopreprintsource.com. All material in this magazine is copyrighted ©2011 by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to Mailing Systems Technology, RB Publishing Inc. or its staff becomes property of RB Publishing Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or Mailing Systems Technology. RB Publishing Inc. and/or Mailing Systems Technology expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine. Mailing Systems Technology (ISSN 1088-2677) [Volume 24, Issue 5] is published seven times per year, including the annual resource guide, by RB Publishing Inc., 2901 International Lane, Suite 100, Madison WI 53704-3128, 608-241-8777. Periodical postage paid at Madison WI and additional offices. Postmaster: Send address changes to: Mailing Systems Technology PO Box 259098 Madison WI 53725-9098

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Real Life Management

With Wes Friesen

Mentoring – Our Passport to Building a Lasting Legacy perhaps the greatest legacy any of us leaves is the people whose potential we helped develop. A great tool for developing people — and yourself — is mentoring. there are many benefits to being in a mentoring relationship. A mentoree gains valuable insight, a listening ear and sounding board, understanding of strengths and opportunities for improvement, different perspective, doors opened and more. the mentor often gains more than the mentoree, including such gifts as the opportunity to pass on life lessons learned, practice interpersonal and management skills, expand their horizons, and the satisfaction of helping another person achieve their potential. An effective mentor looks at how he or she can benefit others — and this ultimately benefits the individuals and the larger organization.

ENGAGE It’s impossible to mentor from a distance. Without engagement, you cannot lead effectively. one way to facilitate engagement is to have an open-door policy with your mentoree. Let her know you want to be there as needed and encourage a connection if a special need arises. Another tool is to practice mbWA (“management by walking around”). spending some time in the world of your mentoree helps promote engagement and shows that you care.

Suggested steps when starting a mentoring relationship include:

EDUCATE education is an essential building block of effective mentorship. mentoring should about helping others become the best they can be, and that is built on a foundation of helping, guiding and teaching. our goal is to help everyone we are mentoring to earn an “A” — whatever an “A” represents in your organization.

Clarify and communicate clear expectations. make sure both the mentor and mentoree are on the same page and supportive of each other’s expectations.

EQUIP effective mentors help create an environment in which others can be productive and excel. equipping goes hand in hand with education in helping people perform at their highest potential.

Set realistic goals and objectives. collaboratively setting goals in the front-end will help ensure focus and builds in direction and accountability into the relationship.

ENCoUrAGE encouragement is the fuel that powers our efforts to engage, educate and equip. encouragement helps lubricate the rough spots that people go through. As J.r.r tolkien said, “Kind and encouraging words cost little but are worth much.”

Focus on cultivating a great relationship. I like the following ben stein quote: “personal relationships are the fertile soil from which all advancement, all success, all achievement in real life grows.” Ultimately, the main lasting benefit from mentoring is the development of a positive, win-win relationship between the two parties.

EMPoWEr true empowerment is preparation followed by the appropriate freedom. the best way to learn is by doing, so there comes a point when we need to let people loose to do their jobs.

Seek opportunities to maintain contact. It takes time together to nourish healthy relationships. schedule regular one-on-one meetings, but also look for other opportunities to spend time together and learn from each other. Develop a mentoring network. there is real value to having multiple informal and formal mentors that can help us grow and develop. on the other side, being involved in helping multiple people develop is very rewarding and helps build that positive legacy that lives beyond our time in the organization.

The Seven Es of Effective Mentoring At this year’s National postal Forum, I heard my friend Jim burns do an excellent presentation on mentoring. part of what Jim included was the “7 es” of effective mentoring, which came from tony Dungy. tony is the highly respected and successful retired

8

coach of the champion Indianapolis colts. Following are tony’s seven keys to being an effective mentor:

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ENErGIZE the best leaders and mentors energize and inspire those they are leading. tools include having an inspiring and compelling vision, clearing road blocks to success, and believing in people and treating them like adults — not children. ELEVATE raising up other people is the truly selfless goal of every effective mentor. It’s not about getting the credit; it’s about helping the organization and every person in it be the best they can be. As president Harry s. truman put it “It is amazing how much you can accomplish when it doesn’t matter who gets the credit.” a Wes Friesen, cmDsm, emcm, mQc, Icp, ccm,cmA, cm, cFm, App, pHr is the manager of revenue collection & community offices for portland General electric, a utility in portland, oregon that serves over 820,000 customers. Wes can be contacted at Wes.Friesen@pgn.com. check out his personal website for free information (wesfriesen.com).


www.MailingSystemsTechnology.com a SEPTEMBER - OCTOBER 2011

9


Software Byte Time for a New Transformation Plan In 2005, Postmaster John Potter presented the 2005–2010 Transformation Plan for the USPS. At the time, Intelligent Mail barcodes were still just being considered, List Certification was an emerging concept, and reducing Undeliverable As Addressed (UAA) mail was a major challenge to the industry. Here we are now, beginning to wrap up 2011, and yet many of the challenges in that Transformation Plan are still facing us. However, now we are also facing the dire situation of rapidly declining mail volumes, increased competitive pressure from alternative communication methods and a DMM that is as dynamically changing and complex as ever. Certainly not the type of transformation I think anyone could have predicted. Yet, our industry is indeed transforming. Print, mail and communication in general are dramatically different now than they were even a decade ago. As we are all aware, these changes very much affect

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the mailing industry, but we must not lose sight of the fact that they resonate within the technology and users of technology as well. The challenge we as software and technology providers face is making sure that we keep pace with emerging technology and seek both a complementary as well as competitive approach for direct mail. The overall goal is still the same — making every mailpiece count. One of the major transformations we’re seeing in software and technology providers is a move to cloud-based computing. In a cloud-based environment, there is no software at the client site other than perhaps a web browser. The Internet is the gateway to the software and users typically subscribe on a pay-as-you-go approach. The benefits touted in cloud computing are a lower upfront investment in software; no need for the end user to apply software updates; and often a lower total cost for computer hardware, meaning a reduced IT budget.


With Christopher Lien

The risks to cloud-based computing, however, are something the mailing industry needs to seriously consider before jumping too quickly into this technology transformation. The first and perhaps most obvious is access to the Internet. While becoming pretty ubiquitous throughout the industry, access to the Internet is essential for cloud-based computing. If the connection goes down or is having bandwidth issues, you will not have access to mission critical systems. Another risk to consider with cloud-based computing is data security. Financial, healthcare and insurance companies may have serious concerns with allowing their data to be processed offsite and through the Internet. Secure file transfer protocols are continually improving, but so are the efforts of nefarious individuals who are actively seeking new ways to steal sensitive consumer data.

Many postal software applications continue to explore a transformational bridge between both cloud-based concepts and onsite solutions through strategic partnerships. A common and well established example of this is NCOALink processing whereby data is processed remotely via a licensed service provider through the postal software application. This approach not only opens up the opportunity for change-of-address processing, but also expanding access to data quality on-demand services. List suppression, data enrichment, and advanced address correction are just some of the expanding services available for mailers who are considering transforming their mailing operations into marketing services. a Christopher Lien is President, BCC Software, Inc., a BELL + HOWELL company.

www.MailingSystemsTechnology.com a SEPTEMBER - OCTOBER 2011

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The Trenches

With Mike Porter

Yes, You CAN Be Too Perfect! I’m a reformed perfectionist. I started my career in the document business as a programmer. A mainframe programmer. Yes, we were the computer geeks that operated in a mysterious world fraught with those three-letter acronyms that kept everyone else guessing. I don’t know if I became a perfectionist because of the detailed work and attention to detail that mainframe programming demanded, or if I was drawn to programming because I was already that way. but I know they’re connected. perfectionism in the document print and mail world is generally a good thing. producing mail that is not 100% correct can have severe consequences. Anyone who has been in this business long enough has probably endured the pain of double-stuffed statements, truncated address lines or some other imperfect result. I’ve written about mailpiece quality and accuracy many times in this column and provided a few hints and tips about how to achieve near-perfection — or at least catch errors before they make it out the door. but there are times when perfection gets in the way of progress. I’ve seen that happen with some of my clients. And I frequently fight against my own idealistic tendencies. there are situations when keen attention to detail is appropriate. And many other instances when it can be a hindrance.

Can You Afford the Time? Digging for all the answers or thoroughly investigating every single possibility down to the miniscule details can eat up tons of time. the recession and staff reductions have resulted in lots of people in the document industry handling the work of two or three people. time isn’t something they can afford to waste. I’m not suggesting that we all go crazy and start making decisions about procedures, hardware, software or postage without thinking it through. that would be irresponsible and it could get you fired. but I am suggesting that making a choice that has a high probability of being perfectly acceptable is often possible without researching the issue to death. As a small business owner, I get to make lots of decisions. I’ve noticed that those times when I surrender myself to my latent perfectionist tendencies I usually return to my original first choice anyway. It turns out to be the best decision about 95% of the time. And when I find out later there’s something better, the difference is usually so small it wouldn’t have made up for the time lost with no decision while I anguished over the details. Which brings me back to my point. If you’ve got a decision hanging over your head that will result in cost savings, better service to your customers, capabilities that represent new revenue opportu12

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nities and the like, make it! trust your experience and instincts and get on the road toward those benefits.

Hesitant about making decisions too quickly? Here are three ways to make it easier:  take advantage of trial offers or guarantees — our last software purchase was made the day after we installed the trial version. the product wasn’t working perfectly at that point, but I was pretty sure we could figure it out. the potential benefits were obvious. If the vendor doesn’t advertise trials or guarantees, ask for them.

 Find someone who has already made the decision — Look for customer reviews or analyst opinions. take advantage of your personal network and sites like Linked In, twitter and Facebook to solicit opinions from peers all across the world.

 enlist the help of an expert — You’ve got to make sure that the people you hire are truly unbiased and objective. And you have to be comfortable sharing enough information about your own operation that the resources can rate the viability of the choices. We routinely sign Non-Disclosure Agreements with our clients that provide for the security of proprietary information when we do things like reviewing rFp responses or make recommendations for hardware or software.

It’s OK to Trust Your Instincts I meet so many people that know what they should do almost immediately. they KNoW it. And yet they spend the next six months trying to find time to do the thorough evaluation that will make them feel better. In the end, they ultimately make the same decision that could have been made long ago — oftentimes without the benefit of the research they intended but never finished. meanwhile, they have missed sales opportunities or suffered under continued poor productivity instead of moving forward. When you can make a decision where the rewards greatly outweigh the risks and you’ve done enough investigation to be reasonably sure of the right move, put perfectionism aside and take bold steps towards progress. I’ve found it refreshing to have liberated myself from the burden of looking at every decision as if my life depended on it. With a little common sense, I can trust my knowledge and experience to come through for me. You can do the same. a mike porter is president of print/mail consultants; a consulting firm that helps print and mail facilities maximize their potential. Get more thoughts about document operations by subscribing to the free newsletter, “practical Stuff” at www.printmailconsultants.com.


NEW

COLUMN

Postal Affairs

With Kim Mauch

Adding Value to Every Door Direct Mail USPS has launched its Every Door Direct Mail (EDDM) program under the guise of making direct mail easier and more affordable —and is marketing it to small business owners as a do-it-yourself (DIY) program. Understandably, most mail service providers (MSPs) see this program as a business threat. But it doesn’t have to be. With a little work, MSPs can use this program to gain customers. Regardless of the marketing hype, EDDM is not that user-friendly. It requires effort to understand the requirements, hardware to print the mailpieces and time to properly submit everything to the local Post Office. Most small businesses will need help. With the right strategy, MSPs can piggyback on the USPS marketing budget to find new customers.

Using EDDM to Find New Customers The EDDM program is actively promoted by the USPS, which is holding local seminars. Those who attend are apt to be eager and ready to use direct mail. Sign up for every local seminar and bring lots of business cards. Be ready to answer questions about what the seminars don’t say:  Preparing an EDDM mailing is complicated  Skipping an address list isn’t much of a benefit  Eliminating the address makes mail look like unwanted

advertising  The only thing EDDM eliminates is a postal permit After discovering all the complexities involved with sending an EDDM mailing, business owners may be open to hiring someone to handle the work. Another good strategy: scan for fliers attached to doors. Businesses using fliers are already spending money on advertising, and don’t realize that postage for EDDM is cheaper than paying minimum wage to distribute flyers. Finally, check your home mailbox for EDDM mail (noted in the indicia). A business owner who has gone through the process of preparing an EDDM mailing may be willing to hire a mailing service provider to get the benefits of direct mail without the hassles.

The Pitfalls of Preparing EDDM mailings The small business owner will find there are a lot of minutiae when sending an EDDM mailing. Important information like choice of ZIP Codes, mail carrier routes and cost cannot be accessed on USPS.com without signing up for a business account. Most importantly, small business owners generally don’t have the industry knowledge, time, staff or equipment to make EDDM a repeatable success without help from an MSP.

Defining the Delivery Area — A small business owner may know which neighborhoods to target, but not how that corresponds to ZIP Codes or how many mailpieces they’ll need. Even so, in the next step the business owner must pick the exact carrier routes to blanket. Designing the Mailpiece — Creating effective direct mail requires marketing knowledge and experience, which MSPs have, but many business owners do not. At the minimum, business owners need to know what size to make the mailpiece so that it qualifies as a Flat. Printing the Mailpiece — Most business owners don’t have the capability to print mailpieces in-house. Poor print quality and the inability to handle heavy card stock are real limitations. The cost of toner and paper add up to an extremely high per-page print cost. Bundling Mail — The mailpieces have to be bundled. Remarkably, the EDDM web page doesn’t provide instructions for bundling mail. The average business owner will need to contact someone for instructions and assistance. Submitting Paperwork — EDDM still requires paperwork, which must be completed properly. Then mail must be brought to the correct Post Office. If the mailing spans more than one Zip Code, it can be brought to Business Mail Entry, which requires a permit; otherwise, mailpieces and documentation must be delivered to each local Post Office.

Selling the Mailing Service Provider The complexities of an EDDM mailing are time-consuming to navigate. MSPs provide a service that removes that barrier to entry — and may even cost less for the business owner than the DIY route. Here are just a few benefits of going through an MSP:  Personalized mailpieces seem less like “junk” mail  Quality printing and paper stock look more reputable  Less hassle and time lost at the Post Office

An MSP provides a one-stop shop for EDDM. A knowledgeable shop will be able to help business owners determine if EDDM or a more targeted mailing will better serve their marketing goals. A good shop will help with messaging and layout of the mailpiece. With a little extra work, EDDM is giving MSPs an opportunity to find new clients on the Post Office’s marketing bill. a Kim Mauch is a subject matter expert in mailing preparation and submission at Satori Software. Contact her at kmauch@satorisoftware.com.

www.MailingSystemsTechnology.com a SEPTEMBER - OCTOBER 2011

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Everything IMBC

With Kevin Conti & David Robinson

MTAC Update: Current IMb Numbers the Usps provided an update on the current Imb numbers at the mailers technical Advisory committee (mtAc) meeting held in August. According to Jim cochrane of the Usps, Imb adoption has leveled off. the overall mail class mix of full-service hasn’t changed a great deal since the last update. of the 42 billion full-service Imb mailpieces processed, this is the breakdown:

Add to this the Usps’ financial worries and their resulting planned actions of reducing the size of their footprint by closing more than half of the current mail processing centers across the country, the Imb can be used to ensure that there is minimal impact to the service performance. If service begins to suffer, the Usps can adjust the processes and, again, minimize the impact of their changes to the network.

48% of full-service Imb is First-class

Another feature that will soon be available on the Usps’ website to help the on-boarding process for small business mailers is a list of third-party providers that can assist a mailer in the onboarding process and through the test environment for mailers (tem’s process).

31% of full-service Imb is standard mail 50% of full-service Imb is periodicals to date, over $70,000,000 has been paid out in Imb discounts by the Usps. Yes, those customers that opted to invest in the full-service Imb implementation are enjoying the associated discounts. In addition to the discounts, another expressed value proposition for full-service Imb is free Acs. You may be aware that full-service Imb mailers expressed concern over traditional Acs charges that were being assessed by the Usps as a result of issues in the reading of the Imb. several months ago, the Usps agreed with mailers that these traditional Acs charges were not appropriate and as a result, ceased charging these mailers for traditional Acs. Also well-received by the industry is that the Usps agreed to refund mailers for some of these charges. the Usps is getting a better handle on the source of issues with Imb barcode readability, and as a result, it announced that traditional Acs fees will continue to be waived until september 24, 2011. Afterwards, however, the barcode readability must achieve a 70% threshold. traditional Acs notices above 70% will be charged for. Additionally, the threshold will be raised five percent every six months until capped at 90%. Jim cochrane also noted that the value of the Imb to the Usps is far from being realized. basic Imb is an improvement over postNet for the Usps, but full-service is where the real value is. Full-service Imb gives the Usps added visibility down to a mailpiece level via the eDocumentation (e-Doc) and FAst scheduling appointments even before mail arrives at their loading docks. With pallets scanned, the start-the-clock initiated, trays scanned and mailpieces being processed, the Usps has visibility of the mail throughout its entire network.

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As stated in the past, the Usps has the most to gain by mailers implementing the full-service Imb. since they’ve removed the deadline of the postNet barcode retirement, the option left available to them is to motivate mailers to adopt full-service by offering additional value — beyond the current discounts. Hence, we’ll see more changes and services that are available specifically to those mailers that are full-service Imb compliant. An exception to this may be something similar to what happened with the Qr barcode discount of three percent available to mailers through August 31. In this program, while full-service Imb wasn’t mandatory, eDoc was required. so, perhaps mailers need to evaluate the cost of migrating to basic with e-doc capabilities as compared to the cost of going all the way to full-service Imb. As always, mailers are encouraged to contact their vendor of choice to get assistance in making this decision. a Kevin conti is Director of mailing solutions at pitney bowes software. David robinson is currently the Director of Address Quality for pitney bowes.


Ship It Trying To Lower Shipping Costs But Getting Nowhere? Would you visit a car dealer and tell the salesperson you have no intention of evaluating the competition, money is no object, you’ve done no research, you’ll trust his/her opinion and you absolutely have to leave that same day with a shiny brand-new car? Of course you wouldn’t. So why do shippers treat UPS and FedEx the same way and expect to see lower shipping costs? Business is good for UPS/FedEx who, right now, are both pondering next year’s increase they will inflict on their loyal customers with the implementation of yet another GRI – General Rate Increase. The conversations in the boardroom probably sound something like this: “Hmmmm… hey Charlie, should we hit them with 4.9, 5.9 or a 6.9% increase in January? Hey, I know, we’ll make it 8.9% and just advertise it as 6.9%; there are many inconspicuous ways we can spin that, and our bonuses will be huge. But wait a minute… if there’s no recourse, why don’t we just go for the largest increase percentage ever? Let’s hit them with 10.9% and then offer them ways to lower their costs as a way to appease. We need not worry about the dete-

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riorating US economy and our customers who are desperately trying to stay afloat and need to cut expenses. We can easily get away with it, there’s no competition and Wall Street will love us.” Folks, if you’re holding stock or working for the “Dynamic Duo,” congratulations, because your income will probably increase next year, but for many of their shipping customers, the situation will be quite different. So what should you do if you want to take action? First, continue to utilize traditional methods, i.e. negotiations, policy enforcement etc. Next, don’t let the personal relationship with your carrier rep prevent you from taking aggressive cost-cutting actions, and make sure you have all the leverage you need to win the best deal. How do you do that? Invest now in a multi-carrier shipping solution. Foregoing “free” carrier-provided technology and implementing your own multi-carrier shipping solution — one that processes


With Jim LeRose

shipments for ALL carriers — places you in an elite group of intelligent business owners and managers and will help you truly drive down costs. Shippers that have their own multi-carrier shipping software, instead of using “free” carrier-provided technology, have the single most important leverage tool in the industry and will save 15–30% over those that do not. Logistics and transportation managers enjoy the coddling they receive from seasoned carrier representatives that UPS and FedEx hire to make promises and bear gifts. These carriers spend millions developing single-carrier shipping solutions to lock in your business to only one company and these tactics have worked and continue to work brilliantly. Remember this: once you accept this “free” shipping software, you are accepting higher rates and missing out on potential savings. The tradeoff for providing free shipping software is enormously in UPS/ FedEx’s favor. Why else would it be free? What is their incentive to give their customers the best rates when they are already

using their proprietary technology with higher rates embedded right into the software? Jim LeRose – known in the industry as “The Freight Spend Assassin” is Principal of Agile NYC Metro and President of Advantaship.com and has been a transportation industry consultant for over 25 years. His clients have saved millions on transportation costs. Agile has helped companies such as JP Morgan, Audiovox, Intuitive Surgical, Panasonic Electric, Petco and over 1,000 others. Advantaship helps small businesses get the same discounts on shipping as the big guys. Jim welcomes your comments and can be reached at jim.lerose@agile-network.com or 888-214-1763

Want to know more advantages to a multi-carrier shipping solution? Read more on our website!

www.MailingSystemsTechnology.com a SEPTEMBER - OCTOBER 2011

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A Light at the End of the Tunnel? While still light years away from the mailing industry of yesteryear, things are getting better compared to our 2010 results. By Amanda Armendariz Things are looking up in the mailing industry… at least slightly. Sure, we’re still bombarded every day with news stories about how the USPS will be unable to meet its financial obligations come September, or how the ever-increasing use of technology by all segments of the population is eroding the importance and relevance of hard-copy mail. But, according to our survey respondents who participated in this Wage & Operations Survey — Part 1, there is a bright side. For example, 40% of respondents say that the economy has had no effect on mail center managers’ opera-

tions this year, compared to only 22% last year (of course, one could argue that things got so bad last year that they just stayed that way in 2011!) Only 31% say that mail center managers in their facilities had to take on additional responsibilities, compared to 37% in 2010, and only 22% of managers had to freeze salaries, compared to a whopping 39% of respondents in 2010. Staff wages for non-managerial positions rose slightly or stayed very close to 2010 levels. Looking at these results, it does indeed seem that things are looking up — at least for the time being.

MAIL CENTER MANAGERS Who’s Managing the Mail?

Number of Full-Time Employees (FTE) Managed 01% 0-5 FTE

59%

6-10 FTE 48%

11-15 FTE

MALE

41% FEMALE

18

11% 03%

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16-20 FTE 20+ FTE

37%


It Pays to Be the Boss: Average Salaries of Mail Center 12 Managers %

Time Spent in the Mailing Industry 10%

6-10 years

<$30,000

14%

36%

11-15 years

37%

$30,000-$49,000

16-20 years

41%

$50,000-$74,000

12%

1-5 years

23%

20+ years

15%

$75,000+

Number of Mail Center Managers with Certifications

Did you know?

27%

The longest-employed mail center manager in our survey results has been a mail center manager for 47 years!

USPS EMCMP

14% CMM

09% CMDSM

Training

Local PCC conferences/meetings ere the most popular form of training, outpacing all other options at 45%. Non-mailing national conferences (i.e. management training courses) came in second in terms of popularity, with 18% of managers utilizing this option. Vendors’ user conferences were a close third at 17%. Fourteen percent attended the National Postal Forum, while 12% attended events such as MSFA, NACUMS, Non-profit or DMA. Eleven percent attended MAILCOM. These relatively low numbers could be explained in part by the fact that 15% of managers said it was not in the budget for training this year, and nine percent said no training was needed this year.

REsponsibiliTiEs

2011

For those mail managers who took on additional responsibilities, some of the top ones include (in no particular order):

No Effect

Added Responsibilities

Salary Concession

Salary Freeze

Working More Hours

08%

07%

11%

11%

18%

19%

22%

22%

31%

37%

ADDiTionAl 2010

39%

40%

Managers Affected by the Economy

Number of Mail Managers Decreased

• Shipping & Receiving • Copies & Records • Printing Services • Document Imaging Processes

www.MailingSystemsTechnology.com a september - october 2011

19


Let’s Look at the supervisors

Number of Employees Managed:

Who’s Managing the Mail?

0-5

06%

6-10

67%

11-15

MaLe

60%

16-20

33%

28%

FeMaLe

Annual Supervisor Salary:

Supervisor Certifications

03%

09%

<$20,000 $20,000-$29,000

CMM

usps eMCMp

$30,000-$39,000

00%

$50,000-$59,000

CMDsM

13%

03% 19%

32%

31%

$60,000+

44%

The Economy through the Supervisors’ Eyes

35%

38%

44%

The average supervisor has been at their job for 13 years. The longest-employed supervisor in our survey results has been in their position 35 years!

2011

03%

06%

06%

09%

15%

16%

19%

21%

2010

20

02%

$40,000-$49,000

Did you know?

No Effect

06%

Added Responsibilities

Salary Concession

Salary Freeze

september - october 2011 a www.MailingSystemsTechnology.com

Working More Hours

Number of Mail Supervisors Decreased

Training Local PCC conferences/ meetings were most popular, with 28% of supervisors attending. Continuing education classes, both on-site and online, came in second with 22% of supervisors participating. Only 12% attended NPF, and a full quarter of respondents said no training was available this year due to budget cutbacks.


Thatâ&#x20AC;&#x2122;s Loyalty! Forty-four percent of respondents reported an employee turnover rate of zero, with an additional 37% reporting a rate of less than five percent. However, for the rest of our respondents, turnover rate was much higher, with an average turnover rate of 21%.

STAFF

Did you know?

89%

Do Not

16%

$12 .13

$12 .20

$12 .90

$13 .44

Have an Employee Incentive Program

$11 .50

$13 .35

2011

$14 .12

Show me the money

$17 .01

$16 .71

11%

Are Not Represented

The average staff member has been employed 9.5 years.

2010

$11 .04

Employees Are Represented by Unions

Entry level

High

Operators of Inserters

Addressing Machine Operators

Mail Handlers

(Average wage)

(Average wage)

(Average wage)

(Average wage)

(Average wage)

84%

Hiring Practices

Thirty-one percent of respondents indicated the number of full-time equivalent (FTE) mail center employees went down in 2011 as compared to 2010, while 13% indicated that the number of employees increased in that same time frame. Thirteen percent of respondents expect to have to lay off employees in 2012, but 15% expect to be hiring.

The ReSpondenTSâ&#x20AC;&#x2122; opeRATionS by The numbeRS Monthly Outgoing Mail Volume

Monthly Incoming Mail Volume

Number of Employees in the Company 09%

13%

14

%

30%

09

%

13%

22%

38%

08%

54%

17% 34%

15% 23

%

Less than 50,000

500,000-999,999

< 5,000

50,000 - 74,999

Fewer than 10

100-500

50,000-299,999

1 million or more

5,000 - 19,999

75,000+

10-99

500+

300,000-499,999

20,000 - 49,999 www.MailingSystemsTechnology.com a september - october 2011

21


Cloud Computing – Keeping Up with Changing Times How the mailing industry can use this technology to our advantage | By Josh Evans

C

loud computing has a nice ring to it. However, using a word like ‘cloud’ to define computer technology leads to many questions even though it is a concept that is easily grasped. think of cloud computing as a utility similar to an electric power plant. Instead of creating your own electricity, you plug into a shared resource that is planned, built and maintained centrally. much like you plug something into an outlet and consume electricity, you can also plug into the internet and consume applications. there are vast numbers and types of devices that can be plugged into an electrical outlet, and a similar reality is emerging for applications using cloud computing. It is important to note that there are three different forms of cloud computing: public, private and hybrid. A public cloud is like a power plant. the electricity is generated for anyone that is willing to pay for it. private clouds are similar to a gas powered generator. You, or your organization, decide that you want cloud computing, but you want it for your own use. most of the benefits of cloud

22

september - october 2011 a www.MailingSystemsTechnology.com

computing remain, but it is within your walls and control. A hybrid cloud is much like you would expect. It blends the use of both public and private cloud resources. Within the context of this article, cloud computing will reference public clouds. the convenience of easily accessible electricity has become an integral part of our day-to-day lives. And just like electricity, the Internet has become an essential part of daily life for many of us. In metropolitan areas, it can be argued that the availability of Internet service is even more prevalent than electricity because of wireless access. one of the key components of cloud computing is wide-ranging Internet access. Whether you are at work, home or travelling on the ground or in the air, the cloud is available. simply connect to the Internet, open a browser and access applications you want to use. If you purchase a new refrigerator and it is bigger than your old one, you don’t need to worry about provisioning additional electricity for the appliance. the power plant already has you covered


for your increased needs. something similar happens with cloud computing. If you are using a cloud-based application, and your usage goes from minimal to heavy, you don’t need to worry about additional resources required to support the dramatic increase in usage. cloud providers have that covered. Not only do cloud computing providers handle scaling of your needs, they also handle the management of your application. power plants do everything needed to keep the flow of electricity going. cloud providers do everything needed to keep your applications up and running. Upgrades, patches, fixes, updates and all the other work it takes to keep your application available is handled in one place. could you imagine having to fix your own power lines after a storm? While there are certainly cases when maintaining your own software makes sense, the upkeep of many applications is a cost that can be avoided. cloud computing providers also centrally manage security. because they must manage security for a large number of users, the investment in security by cloud providers is typically more robust than that of any individual organization. there are certainly those who have concerns about relying on cloud providers to keep their data secure. they can point to recently publicized data breaches as their rationale. organizations are always at risk of theft. banks, museums and home owners implement security systems (some quite sophisticated), and they all still experience theft when criminals are determined to steal. cloud organizations take many steps to mitigate security risks, much like a bank does everything it can to prevent a robbery. Just as receiving power is as simple as plugging in a cord, using an application through cloud computing is as simple as pointing your browser to a website and entering your username and password. Additionally, cloud computing providers manage security, scalability and the application centrally so you and your organization can spend time working, not worrying about software and system upkeep. the attention given to cloud computing corresponds with its opportunity to generate efficiencies, and the significant impacts on most industries.

How will Cloud Computing affect the mailing industry?

Now that we understand what cloud computing is, it is time to turn our attention to its impact on our industry. In many ways, cloud computing is already heavily integrated into the mailing industry. Like any technology though, it takes time for the full benefits of its adoption to be realized. popular postal data quality products such as ZIp + 4 coding and NcoALink processing have been provided as cloud services since their inception. service bureaus centrally manage the software and updates of these products, so clients can benefit from the updated information without doing extra work. In the last couple of years, the mailing industry solidified its movement into the latest technologies when desktop mailing software companies began providing NcoALink as a service. Instead of individual users paying Usps licensing fees ($15,000 for the most common license) and maintaining NcoALink software, users now benefit from receiving NcoALink service through a vendor without incurring all of the as-

sociated costs of bringing NcoALink software in-house. In both of these examples, vendors are offering what most would agree are essentially cloud computing based services. the availability of mailing industry specific cloud computing services increases each year. Just five years ago accessing services like record suppression, merge/purge, postal presort, and Intelligent mail tracking meant buying software or paying a service bureau. Now these services are available from multiple vendors in the cloud. the next five years are sure to bring additional services to the mix. cloud computing is already well established in the mailing industry, and the growing list of applications supporting the industry is promising. this shift toward cloud computing suggests the advantages of this method provide significant value. Jumping on a bandwagon often provides instant “me too” gratification, but there must be rationale as well. reliability, scalability and security are meaningful incentives. by themselves, they may be enough to compel a switch, but there is another significant dimension to the evaluation. Decision makers looking at cloud computing often talk of total cost of ownership (tco) — a cost estimating practice used to help determine direct and indirect costs of a product or system. Although there are certainly exceptions, cloud computing typically reduces the tco for products and systems dramatically. As an example, postal presort and ZIp + 4 software take a significant time investment to keep the software current. It is common for these services to require weekly and monthly updates as well as other version releases periodically. the person responsible for ensuring that the software will produce Usps-compliant mailings typically has significant skills and knowledge. they know how to take files of name and address data and turn them into formats that can be applied to mailpieces destined for the Usps mail stream. the time (read: money) spent updating software could otherwise be spent ensuring quality, developing processes, preparing more files or some other meaningful task. this is a short list of ideas about ways a person would add more value to an organization once liberated from time spent maintaining software. In tco terms, this time is often described as a “hidden cost.” It is hidden because it is not something that shows up on an invoice. maintaining software isn’t the only hidden cost, others will vary from organization to organization; including time troubleshooting software, security and maintaining redundant systems. companies around the globe are already benefitting from cloud computing efficiencies, but how will the industry go beyond just efficiency? As one looks around our industry, there are examples of how cloud computing is advancing beyond the basics. the prevalence of ApIs (how programs talk between one another), mail.XmL, web-to-print and many other applications points to a changing future. cloud computing companies are combining multiple technologies to create new value chains. the future holds many new and exciting products, and it is up to our industry to make the most of the technology at hand. Josh evans is Vice president, product Development, Lorton Data. He can be contacted at jevans@lortondata.com or 651-203-8208.

www.MailingSystemsTechnology.com a september - october 2011

23


From Incomplete Addresses to Mail Redirection Some of the latest advancements in recognition technology By Dr. Tatiana Vazioulina Although the automated reading of addresses has achieved a very high level of accuracy in recent years, there is still a portion of addresses on mailpieces that is not sufficiently recognized and needs to be entered manually. However, todayâ&#x20AC;&#x2122;s advancements in recognition technology allow posts to successfully overcome even these residual bottlenecks in mail processing.

Foreign Mail The main driver for investing in technology innovations is to meet customersâ&#x20AC;&#x2122; expectations: to deliver mail in a timely manner to the exact recipient and add value to the mailpiece by 24

SEPTEMBER - OCTOBER 2011 a www.MailingSystemsTechnology.com

making it relevant to the addressee. One of the problems here is connected to processing foreign addresses. All mailpieces have to be sorted to discriminate between domestic and foreign mail. Foreign mailpieces are processed separately and are sent abroad. If a domestic address is interpreted as a foreign address, the mailpiece is sent abroad and will either be lost or, at best, reach the addressee with a significant delay. Today, recognition systems meet the strictest error rate requirements to differentiate between domestic and foreign mail.

Incomplete Addresses Another example of an issue that can be solved using new technology is the processing of incomplete addresses, which is part of a bigger, undeliverable-as-addressed (UAA) problem. The accuracy of address information is often neglected, and mailpieces are sent with incomplete or inaccurate addresses. These mailpieces require additional handling; if an address cannot be automatically resolved, the mailpiece is also sent for manual processing just to verify the conclusion that the address is unreadable and that it cannot be processed further. The latest Optical Character Recognition technologies (OCR) include an arsenal of sophisticated techniques enabling a conclusive judgment on the quality of address information (for example, technology can determine that an address is incomplete or inaccurate), thus eliminating the need to send a mailpiece for manual keying. Simultaneously, modern systems can reduce the portion of mailpieces sent for manual processing, including those with addresses missing ZIP Codes. Until recently, OCR systems required the ZIP Code to recognize numbers first, and thus reduce the context to recognize the text part of an address. Today there are systems


that can successfully and reliably read the text part of an address using a broad context, thus automatically resolving addresses that do not contain a ZIP Code.

Mail Redirection Mail redirection is one of the most challenging postal situations and exploits one of the most sophisticated automated systems for mail processing. State-of-the-art recognition technology performs a variety of tasks on images of US letter mail that go beyond mere address reading. In addition to the destination address, this technology reads and matches personal/business names contained in the destination address block with names contained in the USPS Change of Address (COA) database. The capability to automatically read the addressee name eliminates the long and costly mail forwarding procedures, improves the speed and accuracy of mail forwarding and substantially reduces expenditures on postal logistics. Moreover, advanced OCR also reads the return address and executes Address Change Service (ACS) determination and endorsement determination. Businesses commonly use the name and address data for many different purposes (e.g. customer relationship management, address validation, marketing, data quality, data validation, customer profiling, personal information, etc.). While extracting information from the endorsement and ACS line, the technology enables further services for customers, allowing the utilization of an electronic address change service. The ACS service helps meet the needs of business mailers by providing a cost-effective, efficient means of obtaining accurate change-ofaddress (COA) information. This saves mailers time and money by reducing the amount of undeliverable-as-addressed (UAA) mailpieces and reducing labor needed to manually re-key addresses. Thus, the updated address data made available by OCR can be passed on to business customers for a fee, helping banks, insurance companies and other businesses ensure that their customer address databases are always up-to-date. Other achievements that are worth mentioning include the capability to successfully detect overlapping mailpieces (so-called “double feed”) even where the shift is very small, to ensure that the covered mailpieces are not lost or sent to a wrong destination. Technology can also successfully detect and recognize “Return to sender” stamps, which may be randomly located on mailpieces and are often of a very poor quality. These new technology applications represent working systems with already proven efficiency and cost savings for the posts that have implemented them. Many deserve a closer look, as they have significant potential to further improve mail sorting efficiency and enable additional postal services. Not only can they read more addresses with higher accuracy, but they are also able to read address elements and data from a mailpiece that could not be reliably read before. Dr. Tatiana Vazioulina has worked in product management and marketing at Parascript, LLC., an image analysis and pattern recognition company, for a decade. She can be reached a tatyana.vazulina@parascript.com or 303-381-3106. Parascript can be found online at www.parascript.com.

www.MailingSystemsTechnology.com a SEPTEMBER - OCTOBER 2011

25


More Jobs, More Revenue.

product spotlight

what to see at

The MCS Eagle UV Inkjet is the first 4.25” inkjet printer for the industrial market. This high-speed, high resolution printer offers print widths up to 17”, supports difficult substrates such as coated stocks and gift cards, and uses less ink than its competitors while delivering true native 600dpi quality. It can mount on almost any existing transport or base.

GRAPH

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MCS, Inc www.mcspro.com 800.728.0154

B

43 oot 06 h

An alternative to larger, higher priced systems, Sensible Technologies’ high performance feeder/folder and intelligent inserter solutions deliver industry-leading uptime to help you increase productivity and capacity. Our simple, durable designs make our equipment easier to operate with less manpower for a lower-cost ROI. Visit Booth #4306 for a demonstration.

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See the US debut of the Concept D envelope overprint press capable of running #10 envelopes at up to 500 envelopes per minute. That’s 30,000 envelopes per hour! The Concept D combines extremely high production output with full color direct mail quality with full variable print image processing. W+D North America Inc. www.wdnorthamerica.com inkjet@wdnorthamerica.com 913.492.9880

Grow Your Business

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20 oot 10 h

Communicating with your customers and prospects is more important than ever. The new Pitney Bowes DP40S color printer with FeedMax Feeder is a full color, laser printing system designed to help you manage the production of your promotional material. Pitney Bowes will demonstrate the integrated process from document creation to finishing. Pitney Bowes www.pb.com

Sensible Technologies www.sensibletech.com info@sensibletech.com 734.421.1727

30,000 inkjet envelopes per hour. Expand your direct mail market.

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48 oot 05 h

Data Quality On-Demand

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46 oot 22 h

Make the best of your data, whenever, wherever, however you need it. Use Accurant to eliminate address errors and ensure that you will stay in constant contact with customers and prospects. Optimizing customer satisfaction and your bottom line. Bell and Howell www.bccsoftware.com/DataQuality/Accurant bccsoftware.com 800.337.0442


Direct mail inserting is all about intelligence and flexibility.

B

40 OOT 17 H

See the full servo W+D BB700 run with a unique front end print line combined with the ability to process inline and print on demand as well as read and print at speeds up to 16,000 envelopes per hour. W+D North America Inc. www.wdnorthamerica.com inserting@wdnorthamerica.com 913.492.9880

Advanced Gripper Arm Inserter

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36 OOT 11 H

The Forerunner Series from Bell and Howell is the industry’s most advanced gripper-arm technology. The F13 (formerly Enduro) with Harmonix software automatically detects machine, operator and environment production characteristics and adjusts processing speeds to achieve greater efficiency; higher net throughputs. The F13 offers 20% faster speeds of up to 13,000 cycles/hour. Bell and Howell www.bellhowell.net 1-800-220-3030

B

20 OOT Decrease Time Between Jobs 38 H Featuring a new front-end that ramps up processing speeds to 24,000 mailpieces per hour, the K3500 SilverLine Dual Channel sets new standards for high speed inserting systems. The redesigned system combines the best of the original Dual Channel with new technologies that come standard on each machine, helping mailers decrease time between jobs.

Bring It!

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52 OOT 10 H

When you are told it can’t be done, Bring It! When you need a solution to your mailing needs, not just an expensive piece of equipment, Gunther is there. When nobody can help solve your complex mail problems, try Gunther. We create intelligent Mail Inserters for the non-standard world. Gunther International www.guntherintl.com sales@guntherintl.com 800.864.1490

Kern www.kerncan.com 888.KERN.INC

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Mail Green remanufactured ink cartridges for Pitney Bowes, Hasler, Neopost and Data-Pac postage meters deliver quality, reliability and performance comparable to OEM at a fraction of the cost. Mail Green leverages the superior design of the Original Equipment Manufacturer’s cartridge and adds value through proprietary remanufacturing processes, highly efficient USPS compliant ink formulas and outstanding customer service. Thinking about new ways to cut operational costs? Think Mail Green.

SortGen allows you to co-mingle mail in a single-pass and achieve the highest postage discounts. Paramount is a DBCS sorter that processes the widest spectrum of mail in the market at the highest throughputs. SortGen and Paramount … Your intelligent co-mingling solution. Siemens Commercial Mail Solutions www.siemenscms.com/commingling cmsinfo.sea@siemens.com 877.947.7005

Mail Green www.gomailgreen.com orders@gomailgreen.com 866.760.6027 ext. 104


Reality Check

With Wanda Senne

The Next “What’s Next?”

IN

my August reality check column, I considered the “what’s next” for the Usps folks who decided to take advantage of the retirement option and wished them well, while considering the people “left” who may be dealing with “survivor syndrome.” Following that announcement (along with thousands of others in our industry) I am evaluating the current “what’s next” — the Usps’ network optimization, or operations facility rightsizing plan eliminating approximately 325 facilities in calendar year 2012 based on mail volume projections. As successful businesses evaluate their value chain and capabilities to protect their market share and stakeholder value, difficult decisions result in major impacts. the Usps is in a position that requires this evaluation, strategic planning and reaction to succeed. there are many ways to react to this reality, and my approach is based on a recommendation from Nick Vujicic, an internationally recognized preacher and motivational speaker born without arms or legs: “Use everything we’ve got to the best of our abilities; learn to accept what you cannot control and focus instead on what you can.” Do you think that people are hard-wired for hope? some people claim they have an optimism bias. A tendency to be overly optimistic about the outcome of planned actions. some people claim this bias “creates an over-estimating likelihood of positive events and an under-estimating of negative events.” Daniel Kahneman, Dan Lovallo and bent Fluybjerg (Harvard Business Review, 2003) acknowledge that an optimism bias exists and is often used in a strategic effort to promote large politically charged projects for approval and acceptance. You know, if that’s what it takes for the Usps to achieve momentum and approval to right-size its network, I’m all for it! I’m optimistic. mail will remain a powerful, successful marketing and communications channel for many years and a massive network adjustment is just one element needed for future viability. Are you optimistic? Want to find out? Psychology Today has a “happiness — or optimism — test” you can take. I didn’t pay the $6.95 to get all the results (pretty reasonable cost) but it seems that my cynicism score of 18 indicates that I believe strongly in the goodness of humankind and give almost everyone the benefit of the doubt, accepting what people say and do at face value, while not making conjectures about their motives. It’s pretty clear what the Usps’ motives are. to do all it can within its legal authority to provide a stable infrastructure to help 28

september - october 2011 a www.MailingSystemsTechnology.com

support the approximately 8.4 million jobs and the $1.138 trillion in sales revenue associated with the mailing industry that represents over seven percent of the nation’s GDp and over six percent of the nation’s jobs. You might think it is good to temper optimism and be slightly skeptical to avoid getting taken advantage of. If you lean more to the pessimistic side of the equation and assume the worst, you can miss opportunities, neglect problems that need to be solved and fail to take action that could lead to improvements in your quality of life. So how can you maintain a positive attitude in what is likely to be a stressful situation while understanding and working through the USPS network optimization this coming year? Some advice from a university in Iowa suggests:

 make an itemized list of everything you experience that is

negative or stressful.  examine the list and ask:  can I do anything about this? (remember Nick’s recom      

mendation)  can I change the situation?  What if I changed my reaction to the situation? create a plan to change your reaction and do it! make a list of positive things in your life Laugh and spend time with family and friends Listen to good music physical activities/exercise take a nap! (Love that one!)

the bottom line is this reminder from orson Wells: “If you want a happy ending, that depends, of course, on where you stop your story.” Don’t stop this story (that will eventually be positive) until all the details are shared and you work with the Usps to accept what you can’t change, and focus on what you can! a Wanda senne is the National Director of postal Development for World marketing. contact her at wsenne@worldmarkinc.com or 770-431-2591.


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control if quality it. discounts Don’t risk page 14 is ignored.

THE CHANGING

FACE Industry trends — past, present, and future page 20

10 tips for automating your mail and package tracking.

Page 24

Adopting new customer communication methods.

Page 22

A new approach to postal costing.

ING MAK THE PIECES FIT

Upgrading your software? Questions you should ask — and pitfalls to avoid page 16

OF MAIL Not to worry — direct mail is here to stay page 22

to Software The fightadaptations to remain USPS relevant support a changing in the 21st century page 8 page 14

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Pushing the Envelope

With Kate Muth

The Future of the Postal Service Editor’s Note: This analysis by Kate Muth originally appeared in our e-newsletter, and due to popular demand, we are re-running it in printed form. You can read the entire piece on our website.

T

he pony express is remembered as a legendary part of this nation’s history and provides an indelible image of an early postal system connecting the western reaches of a new country with its more populous eastern portion. many Americans might assume the pony express was the primary way that mail reached people living west of the mississippi in the second half of the 1800s.

the truth is that the pony express lasted only 18 months (18601861), was not a postal service (then the post office Department) invention but was a contract service launched by transportation pioneer William H. russell, and was a money loser from the start. but romantic folklore is borne from movie images and western novels and other retellings of a tale steeped in American folklore, but short on historical fact. Unfortunately, we face a similar situation with today’s communications about the postal service’s plight — with the writing of the “current history” of the postal service. some media have not done a good job of weeding out the facts from the folklore, for example by reporting that tax dollars are somehow at risk when the postal service loses money. In fact, it’s postage ratepayers that foot the bill — and face future rate increases — when the postal service posts net losses. And people who should know better continue to use loaded words, like taxpayer bailout and subsidy, to describe the postal service’s financial situation and challenges. the most damning part, however, is that public policy is being formed from this misinformation. the facts are challenging enough for the postal service; it shouldn’t have to fight a misinformation campaign too. on their face, the facts are sobering. the postal service is in the midst of a financial crisis unlike any in its 230-year history. It lost $8.5 billion in FY 2010 and is on track to lose $8.3 billion this year, according to estimates from postal officials. It will reach its borrowing limit of $15 billion and run out of cash by september 30, 2011. the postal service has indicated it will not be able to make the $5.5 billion prefunding payment into its retiree Health benefits Fund on september 30 as directed by law. And all of this is playing out while the world is embracing digital communications, raising questions about how a hard-copy communications infrastructure should adapt to the digital age. In a desperate effort to conserve cash, the postal service took the extraordinary step in early June of suspending its biweekly employer contributions into the Federal employment retirement service (Fers), which will save it $800 million through the end of 30

september - october 2011 a www.MailingSystemsTechnology.com

the fiscal year. It also announced it had suspended discretionary awards and its pay-for-performance program for executives and officers. It is in the midst of employee buyouts and a reduction in force that are part of its plan to shed another 7,500 positions. (over the past four years, the postal service has reduced its workforce by 110,000 career employees.) It continues to focus on reducing its workhours to keep its costs down. It has revamped its retail strategy in an effort to close post offices more easily, while providing customers with even greater retail access to products and services. While these are commendable efforts — and just the kinds of things a private-sector business would do — they are like sandbags against a rising mississippi river. they will hold off the water for only a short time before the river comes rushing through, destroying entire communities. At the moment, these cash-conservation initiatives are among the few tools the postal service has to hold down its costs. only congress can provide the postal service with a complete set of tools to build a levee strong enough to hold off the flood waters. only congress can fix the overfunding of benefits plans so the postal service can stay afloat long enough to tackle its long-term challenges and thrive in a fast-changing communications market. If congress is so worried about some of these long-term challenges — which include an oversized network, shrinking volume, a changing communications landscape, and a wanting digital strategy — it could tie continued payment relief to milestones in an operational plan. of course, this would require congress to allow the postal service to right-size its network. Unfortunately, many in congress seem to think the postal service needs a “crisis” before any reform of the system can occur. the postal service’s situation is not so different from the stalemate that occurred over the debt ceiling, where lawmakers appeared willing to gamble with the nation’s economic recovery just to advance a particular agenda. similarly, congress refuses to right a clear injustice against the postal service — the overfunding of its benefits plans — and instead lets the postal service slide into insolvency so lawmakers can gin up a crisis and force through their own “solutions.” Just as Wall street clamored for a bipartisan solution to the debt ceiling, the mailing industry does the same for the postal service’s financial crisis. Let’s not forget that the mailing industry is responsible for 8.7 million jobs and more than $1 trillion in sales revenue, or seven percent of gross domestic product, according to the latest analysis by the emA Foundation for paper-based studies. A financial fix is essential to the integrity of communications and commerce in this country. a Kate muth is president of muth communications, a writing, editing and consulting firm. contact her at katemuth@comcast.net.


Mailing Systems Technology September October 2011  

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