Mailing Systems Technology January February 2012

JANUARY-FEBRUARY 2012

www.MailingSystemsTechnology.com

Choosing New Software?

Page 16

Software Spotlight Page 26

Barcoding your mail earns many discounts — but it’s not right for everyone Page 20

How to beat the costly challenge of return mail Page 24

Are we undergoing

the digital mail

revolution?

Page 18

Volume 25 Issue 1

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JANUARY - FEBRUARY 2012

Features 16

On-Premise or Cloud Computing?

The choice is yours… but weigh the options carefully

By Josh Evans

18

The Future of Digital Mailboxes Are we on the brink of a digital mail revolution?

By John Payne & Humberto Prospero

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20

To Barcode or Not to Barcode – That Is the Question The discounts are attractive, but barcoding may not be right for everyone

By Adam Lewenberg

24

Return Mail: How to Beat the Costly Challenge Return mail can be expensive for mail centers, but there are ways to minimize the impact

By Jeff Stangle

20

Departments

Columns

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5

Real-Life Management Are You a Theory X or a Theory Y Leader?

By Wes Friesen

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Software Byte

Exciting Times

15

Guest Commentary: A Year in Review

The Visibility, Predictability and Accountability of the New Intelligent Mail

By Christopher Lien

10

Editor’s Note

26

Product Spotlight: Software

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Reality Check A New Approach to Meetings

The Trenches 21 Century Mail – With 1980s Tools

By Mike Porter st

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Postal Affairs 9 Reasons to Take Another Look at Electronic Documentation

By Kim Mauch

12

Everything IMBC Driving the Value of Paper Communications in a Multi-Channel World

By Kevin Conti and David Robinson

14

Ship It Returns Happen

By Jim LeRose

[ PLUS ] 4

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Stay connected! Meet other industry peers, contribute to our thought-provoking discussions, or start one of your own. Join our LinkedIn group today!

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editor’s note

with Amanda Armendariz

Mailing systems technology PUBLISHER Marll Thiede

EDITOR

Exciting Times Welcome to our first issue of 2012! This time of year often seems like such a letdown.

The excitement of the holidays is over, the weather is often questionable and, as of January 22, we saw some rate increases for mailers. So, it’s no surprise that many people (especially those of us in the mailing industry) are eager to plow through (pun intended) the final days of winter and embrace the spring. Thus, our January/February issue is focused, appropriately enough, on looking forward to the changes that are brewing.

Amanda Armendariz amanda.c@rbpub.com

CONTRIBUTING WRITERS Kevin Conti, Josh Evans, Jim LeRose, Adam Lewenberg, Christopher Lien, Kim Mauch, John Payne, Mike Porter, Humberto Prospero, David Robinson, Jeff Stangle, Harry Stephens, Wes Friesen

CIRCULATION

Rachel Spahr rachel@rbpub.com

ADVERTISING

Technically, the theme of this issue is software, but “revolution” is a broader, more encompassing term that could be used instead. First, our feature article is on choosing the right software for your organization, and we all know the correct choice could revolutionize your operation by reducing costs and streamlining workflow. Secondly, we provide you with a look at the transformation from physical mailboxes to digital ones.

And of course it goes without saying that the United States Postal Service continues to adapt itself to the realities of the 21st century. Really, if “revolutionary” isn’t the appropriate word for this issue, I don’t know what is.

Of course, as the mailing industry (and, really, most industries out there) changes, so too do the ways we interact with our subscribers. Of course we’ll still be providing our print issues on a bi-monthly basis, but there is so much more to our brand than just the print issue. Our website is updated daily with new content, our monthly e-newsletters provide insight from some of the top minds in mailing, and our LinkedIn group is a great way to stay current on various happenings, connect with other mailing professionals, and share your opinions on the discussions posted. So don’t think of this print issue as the way we communicate with you; instead, think of it as just one of many avenues we use to reach our loyal subscriber base. If you can, take the time to get involved with us on the other levels, as well. Using the technology available while still maintaining the importance of print mail? That is, indeed, revolutionary.

As always, thanks for reading Mailing Systems Technology.

608-442-5064 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 25, Issue 1 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 ©2012 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 25, Issue 1] is published six times per year, (January/February, March Buyers Resource, March/April, May/June, September/October, November/December) 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

Real Life Management Are You a Theory X or a Theory Y Leader?

“In the past, a leader was a boss. Today’s leaders must be partners with their people… they can no longer lead based solely on position power.” – Ken Blanchard Want to be a more effective leader? understanding and properly applying the Theory X/y leadership model will help. Let’s take a look at where Theory X/y came from and how we can apply it to be better leaders.

Roots and Explanation of Theory X & Y The theory X and y leadership model was developed 50 years ago – and has stood the test of time and been validated by modern research.

The model was proposed by social psychologist Douglas McGregor in his classic book The Human Side of enterprise. McGregor’s model suggests that there are two fundamental approaches to managing people. Many managers tend towards Theory X, and generally get poor results – especially over the longer term. enlightened managers mostly use Theory y, which produces better performance and results and allows people to grow and develop.

Let’s look at these two competing leadership philosophies: Theory X (authoritative and traditional style). Theory X managers assume that people are lazy, don’t want to work and it is the job of the manager to force or coerce them to work. People are viewed as a “cost” that must be monitored and controlled. It is based on three basic assumptions: 1. The average person inherently dislikes work and will avoid it if at all possible.

2. Most people have to be coerced, controlled, directed and threatened to get them to work towards organizational goals.

3. The average person prefers to be directed, avoids responsibility, isn’t ambitious and simply seeks security.

In practice, Theory X managers tend to be autocratic and controlling, and feel it is up to them to ride people and make them do their work (i.e. managers are “policemen”). These managers tend to micro-manage, be extremely task oriented and not put much emphasis on building positive relationships. Little emphasis is shown towards developing a positive work environment, and recognition and appreciation would be rare. People working for these managers tend to be motivated by fear and feel unappreciated.

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Theory Y (dignified and enlightened style). Theory y managers assume people will perform well if treated positively and that higher order needs dominate most individuals. People are viewed as “assets” that should be valued and developed. It is based on six basic assumptions: 1. The physical and mental effort of work is as natural as play, so the average person does not inherently dislike work.

2. People are will exercise self-direction and self-control in order to achieve objectives.

3. rewards of satisfaction and self-actualization come from the effort to achieve objectives.

4. The average person learns not only to accept but to seek responsibility.

5. Most people have a capacity for imagination, ingenuity and creativity.

6. The intellectual potential of most people is only partially realized.

In practice, Theory y managers tend to be participative when making decisions and value both results and relationships.

These managers tend to delegate and empower their people because they trust them and feel they will do good work (i.e. managers are “coaches”). Priorities will be given to developing positive work environments and expressing regular recognition and appreciation. These managers will also feel that people are important and worth developing. People working for these managers tend to feel appreciated and dignified and will generally have good morale and feel motivated.

Applying Theory Y Modern research and your own life experiences validate that, generally speaking, the Theory y leadership style will lead to better results – both for your people and you as a manager. It is important to determine which style of leadership you want to follow – then do it! It can be valuable to get regular feedback through direct questions, surveys and third parties to assess how effective your leadership style is. The bottom line is that most people will respond positively to a Theory y leadership approach – and it’s up to us to provide it!

With Wes Friesen

Let’s get specific – how do we practice Theory Y management?

Here are a few pointers:  Vision and Expectations: Paint a positive vision of a better future, and be clear about expectations. Express your confidence in your team to be great. I like this quote from John Steinbeck: “It is the nature of man to rise to greatness if greatness is expected of him.”  Leadership approach: Be a servant leader, not a “serve me” leader. Minimize differences between the management-staff relationship.  Planning & Decision Making: Be participative, not autocratic.

Seek and listen to input from your team members.  Communication: Err on the side of over communication versus under communication. Be honest, realistic and positive – and be a good listener too.  Control: It is important to have policies, procedures and work standards in place so people know how to do their work. But avoid being over-controlling and micro-managing the work.

Showing trust in your people will lead to higher morale and motivation. Also, encourage your people to share their ideas and use their ingenuity and creativity to do the work smarter and better serve your team’s stakeholders.  Recognition: Work on providing regular informal and formal recognition and appreciation. One recent study found that the ratio of positive (appreciative) statements to constructive statements should be at least 5:1 to maximize relationships and motivation.

Let me close with a quote from Sam Walton. “Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it’s amazing what they can accomplish.” Good luck as you apply the Theory Y approach and help your people and teams achieve their potential! a Wes Friesen, MBA, 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 teaches university classes and is a featured speaker at national Conferences like National Postal Forum, MailCom, FUSION and others. Wes can be contacted at Wes.Friesen@pgn.com. Check out his personal web-site for free information (wesfriesen.com).

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Software Byte The Visibility, Predictability and Accountability of the New Intelligent Mail Managing the in-home delivery window is often a major concern for mailers. Ensuring pieces arrive at their destinations in a predictable and timely manner is especially critical for direct marketers.

This predictability is based upon a relatively dependable delivery schedule for the United States Postal Service. However, that delivery infrastructure will soon be changing and with it, so, too, may the predictable delivery of these time-sensitive mailpieces.

Delivery standard changes, which the USPS has filed with the Postal Regulatory Commission, are just one type of challenge facing the mailing industry. We already know that mail volumes are down and that there is still a growing interest in alternative communication and delivery channels. Yet, most astute marketers still know that direct mail works. Once a mailpiece arrives, it is going to be touched, opened and read. It simply cannot be ignored, and thus direct mail still provides a significant opportunity to connect with customers.

One of the greatest opportunities direct mail provides is a role as the lynchpin in multi-channel marketing efforts. We live in a

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multi-channel world, and it has been proven time and again that messaging to customers in multiple ways and strategically tying those together is one of the most effective ways to generate a response or sell a product. Anyone who’s been part of a customer loyalty program has certainly been approached in multiple ways, whether it’s through a smartphone, an email or a tried and true direct mailpiece. These multiple touch points help the marketer stay in constant contact with customers, and they help customers take full advantage of what the loyalty programs have to offer.

Simply put, multi-channel messaging works, but in order to achieve success, timing is everything. A message that arrives in a predictable, timely manner and has relevance directly to the recipient is going to generate a response. The message and the ultimate timing of that message are firmly rooted in accurate address data, and what makes direct mail based on accurate address data such a powerful element in multi-channel messaging is its predictability, allowing marketers to coordinate a messaging plan for additional channels, coupled with its visibility and accountability. It is the Intel-

With Christopher Lien

ligent Mail barcode (IMb) that provides the visibility into the mailstream and the accountability that we need to ensure that a piece was created, inducted and is being processed through a network.

Predictability is based in historically tracking mailpiece visibility.

Thanks to the IMb, we have been able to gather unprecedented data that allow us to make assumptions based on past delivery performance. We will need to work to rebuild this predictability by gathering data in the new network environment. For now, we have to look for ways that transcend barcodes and addressing, and truly get back to the heart of what I believe is the next frontier: Intelligent Mail.

The Intelligent Mail barcode is just that: a barcode. When we create an effective mailpiece as part of a multi-channel message, and then time the process from production to delivery, that’s where I think we truly begin to get into intelligent mail. The systems we use to measure and monitor that are going to be critical this year. The Postal Service is providing IMb tracking information free to their customers this year, and no doubt they did this as an additional carrot dangled to encourage people to adopt Full Service Intelligent

Mail. However, that alone isn’t going to be sufficient to create intelligent mail. It takes software. It takes systems. It takes meaningful reports that can decipher a flood of data. Organizations that are able to manage a full supply chain from message creation to address cleansing to astute mail preparation to visibility for tracking and message response are going to be the ones who will emerge with a measurable ROI that’s rooted in truly intelligent mail.

We are excited about this year, and we know that many of the software providers will be working closely with the Postal Service as they implement the network changes. Software solutions can help keep customers informed and actively engaged in the rebuilding of intelligent mail and effective communication. Yes, mailers now have access to free IMb tracking data for their specific mailpieces. However, translating the IMb data into actionable information to drive business and enhance the overall message effectiveness is where software comes into play. That’s where technology needs to be leveraged. a Christopher Lien is President of BCC Software, Inc., a BELL + HOWELL Company.

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The Trenches

With Mike Porter

21st Century Mail – With 1980s Tools as a consultant, I get the opportunity to walk through mail centers and document production operations of all sizes. It never ceases to amaze me when I see shops using tools and methods that I remember fondly from my old days in the service bureau business.

Swing arm inserter machines with a million miles on them, OMr marks (or no marks at all), clipboards, manual batch balancing, sequence-dependent matching, undocumented reprints and more are not uncommon in shops all across the country.

Thirty years ago, we didn’t have much of a choice. Camera technology for capturing barcode information at production speeds was barely invented and very expensive. any sort of workflow system was likely homemade or cobbled together from stand-alone tools, and aDf wasn’t even a twinkle in Gartner’s eye.

I’ve been fortunate to be invited to some centers that were stateof-the-art as well. It’s not as if the document industry has been frozen in time. Most of the places I visit do have some parts of their operation running with modern components. but it is surprising how many pieces of mail today are produced, at some point in the workflow, using equipment that was fully depreciated during the reagan administration.

That’s quite a compliment to the equipment manufacturers and service people who keep these workhorses humming. and considering how complex mail has gotten since the early days of Zip+4, the operations people have achieved miracles to be able to continue to meet new challenges by tweaking the legacy tools and techniques.

Necessity: The Mother of Invention I’ve seen some very creative solutions designed to tackle everything from holding down material to keep it from jamming (steel washers, Velcro, and Mylar film) to detecting sealed envelopes that were missing contents (light bulbs and a radio Shack sensor). Detailed job-specific setup instructions and manually-intensive production steps are frequently stored in thick binders — or between the ears of some very valuable employees.

UPGRADE OPPORTUNITY

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While admirable and functional, many of these adaptations only work under very specific conditions. They are sensitive to changes in materials, specifications, data, or environment. especially vulnerable are the procedures that rely upon experienced employee observations or manual processes. These don’t scale up very well should volumes increase. nor are they especially transferrable in cases where operations are outsourced or new workflows are introduced due to mergers and acquisitions.

I’ve never been one to recommend change just because some new technology comes along. On the other hand, some document operations are putting themselves at risk by relying on some old tools at a time when making mistakes or incurring extra expense could severely impact their continued existence.

I’m sure operations that rely on older hardware, software, and methods will continue to do so until it becomes financially unreasonable to continue. but document operations should factor in the impact of mistakes should their legacy systems unexpectedly fail. I will continue to help clients squeeze the value out of their existing infrastructure or help them migrate to something more modern — whichever path they choose to take. but transitions aren’t always easy. So if your shop is considering some updates in the next 12 months, don’t wait until the last minute. evaluating current and future requirements, comparing alternatives, migrating from the old to the new, and testing all take time and require coordination. just getting a handle on how the work is really getting done in your shop and determining your exposure to privacy violations or other errors can take more time than you thought. So get started now. assess your current methods and then make plans to continue to work with what you have or make some strategic upgrades. a Mike Porter is President of Print/Mail Consultants; a consulting firm that helps print and mail facilities assess their operations and maximize their potential. Get more thoughts about document operations and industry trends by subscribing to the free newsletter, “Practical Stuff” at www.printmailconsultants.com

LEGACY

2011

Reprints

Manual search through print file

automated and tracked

Inserter Machine Control Balancing/Integrity Matching Correcting Inserting Errors

OMr Meter counts frequent spot-checks Weighing mail pieces, visual inspection

2D barcodes/file based automated via cameras & software Camera verification automated sequence-check stops the equipment

Job Set-Up

Written documentation, employee experience automated workflow, hot folders

Job/Mail Piece Status

Manual search

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job/Piece tracking database

Postal Affairs

With Kim Mauch

9 Reasons to Take Another Look at Electronic Documentation If you’ve been in the mailing industry more than a year, you’ve likely heard about Electronic Documentation. The USPS wants you to use it. Several software solutions offer it. So what’s the delay?

Most mailers report being deterred by long testing times, additional costs and the general sense that it’s just too complicated.

But some recent changes have made it easier than ever to send your mailing documentation electronically.

What is it?

Electronic Documentation, or eDoc, is a way to send your mailing information — Postage Statement, Qualification Reports and other documentation — to USPS electronically. You can send this information using one of three methods: Mail.dat, Mail.XML or by manually entering your mailing data into the Postal Wizard. USPS prefers that mailers use eDoc as it prevents data entry errors that happen when printed documentation is transcribed by USPS clerks after you arrive at the deposit facility.

How can you benefit?

While there isn’t a postal rate discount for using eDoc, there are operational benefits that can offset the potential costs: 1. Submit your documentation with a few clicks. Because most presort and post-presort software already supports eDoc, you can have your mailing paperwork uploaded with minimal training or additional software.

2. Reduce errors caused by manual entry. When you print your postal paperwork, the entry clerk re-types it into PostalOne!. If they make a mistake, your mail could be held until the problem is solved. So rather than heading back down to USPS to correct a problem, you can be working on your next project.

3. Pre-screen your paperwork. When you upload your data using Mail.dat or Mail.XML, the upload algorithm does an initial screen of your sortation, along with your permit and contact information. If there are problems, you can solve them before the mail leaves your facility.

4. Faster acceptance of your mail. Because your paperwork is already in the system, USPS acceptance clerks can look up your Job information and accept your mail faster. A quick check to ensure your mail matches the documentation is usually all that is needed.

5. Avoid lines when submitting your mail. USPS is considering giving eDoc users an “express pass,” similar to the first-class passenger screening lines at the airport. This program is currently being tested and could be available nationally sometime in 2012. If implemented, this could save you a lot of time.

6. Shorter testing phase. One of the biggest hurdles to using Mail. dat and Mail.XML was the long testing phase USPS required for all users. Testing could take anywhere from a few days to several months, depending on the complexity of the mailings.

In October 2011, USPS revised the testing process, cut out sev-

eral scenarios and made the process a lot simpler. Mailers still need to test, but the process is now much easier.

7. Better vendor assistance. Most vendors that offer Mail.dat or Mail.XML now offer help to mailers who are just getting started with eDoc. If your existing software vendor supports Mail.dat or Mail.XML, it is likely they have experienced staff who can walk you through the maze.

8. No additional fees for Mail.XML users. Mail.dat users pay a fee to IDEAlliance to register their account, but there is no similar fee for Mail.XML. While only a few vendors support Mail.XML at this time, it allows for faster uploads and mailing modifications, all while being the more economical option.

9. One step closer to Full-Service. While there isn’t a discount for using eDoc, it is an important part of the Full-Service puzzle.

Once you’ve started using Mail.dat or Mail.XML, there is only a little extra work to get the Full-Service discount.

If you’re ready to jump into the eDoc world, you can start by contacting your vendors. Or, read the guides and specs available on the USPS site at http://ribbs.usps.gov. a Kim Mauch is a subject matter expert in mailing preparation and submission at Satori Software. Contact her at kmauch@ satorisoftware.com.

PRODUCT SPOTLIGHT Rethink Your Ink! 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.

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

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Everything IMBC

With Kevin Conti & David Robinson

Driving the Value of Paper Communications in a Multi-Channel World Postnet barcode retirement is back on the table! yes, the uSPS has hinted at retirement plans and a federal register notice may be issued in the next 90 days. However, should the uSPS re-instate the Postnet retirement date, it could be a full year before the deadline.

ing. This initiative resulted in fewer re-mailings, led to approximately $745,000 in mailing savings and generated approximately $1.2M in revenue with timely execution of integrated marketing over six months. Many more such success stories are available.

This action will help the uSPS gain total visibility of mail to best manage processing costs and effectiveness in light of the network Optimization program that is currently under review (for an advisory opinion) by the Postal regulatory Commission. as currently envisioned, plant reductions and overall network optimization efforts will commence next May, with completion targeted for December 31, 2012.

as we look forward to the events in 2012, how will the IMb continue to help organizations communicate effectively with end customers?

While new year’s predictions are always risky, 2012 looks to be the year of increased marketing growth through accountability and not just cost savings. Ongoing project discussions are occurring with these organizations focused on multi-channel/customer-preferred channel communications to drive sales, cross-sell and retention in a highly competitive market.

Here’s How It Will Happen To achieve the largest operations project in uSPS history on time and with minimal disruption, Intelligent Mail barcodes will be used to monitor the impact of changes to the network. In terms of IMb data, in October 2011, the following was inducted and processed as full-service IMb: } 54% First-Class Mail } 50% Periodicals } 32% Standard Mail

These volumes should be higher in May 2012, which gives the uSPS plenty of data to determine whether any changes adversely impact uSPS operations or mailer expectations.

Mailers are currently working to identify the real value between basic and full service IMb for their businesses. However, many are realizing greater value today, including a financial services operation that mails 40MM pieces (invoices, collection notices and service cancellation notices). The company’s objectives were to reduce postal expenses while lowering uaa mail to one percent of all mail. This mailer used full-Service Intelligent Mail to drive over $150,000 in postal savings and reduce uaa to 0.6% of the mail. another mailer, an acquisition marketer that mails 50MM pieces (lists acquired from third-party sources, lists from existing card subscribers, checks, loans and credit card offers) wanted to measure the quality of thirdparty lists, reduce uaa mail and track delivery for integrated market-

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Such technologies as the IMb and Qr barcode allow savvy mailers and organizations to integrate effective paper communications into a multi-channel plan. How many times have you called an organization or walked into a store in response to a mail offer and found the associate unaware of it? How many times have you visited a company website after receiving a mail offer and found inconsistent or incremental messaging?

The IMb allows organizations to not only track “mailpieces,” but also identify, store and decide on customer “journey” events related to specific marketing offers contained in transactional or customized marketing mail communications. These journeys may well start with paper-based communications and proceed through multiple channels via Qr barcode scans that guide the journey to web and then on to email, mobile, social media and digital delivery portal. by properly “instrumenting” the IMb and linking the unique ID to a prescribed campaign and pre-defined journey “tree,” organizations can leverage benefits of the IMb that go well beyond tactical postal efficiencies.

It is not surprising that the uSPS has offered mailers an incentive to link Qr barcodes and marketing programs to support just such marketing applications — and these types of incentives are expected to continue in 2012 and beyond to sustain and grow the value of paper communications in a multi-channel world. 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

With Jim LeRose

Returns Happen If you are one of the millions who shopped online this holiday season, then you were potentially faced with the laborious task of returning an item. It could be one that you received or had shipped to someone on your list. Either way, it’s a good possibility you had more fun eating Grandma’s fruitcake. People hate returning items so much that many either discard or give them away, foregoing the refund altogether.

} Sato America (visit: www.satoamerica.com) markets a twosided shipping label with a built-in packing slip and return label.

The consumer simply removes the top portion of the label, writes a comment and affixes the label in reverse. This is a simple method and step in the right direction that eliminates wasteful packing slips and helps the environment when compared with conventional means.

Unless you’re Devin Hester, the NFL’s all-time return specialist, you probably want no part of the return process. But it’s not just bad for the consumer; returns are hurting e-commerce companies as well. That’s because online consumers are demanding a simplified return process, and they are demonstrating this by finding someone else to buy from when the process is too cumbersome.

} Newgistics, the leader in reverse logistics (visit www.newgistics.com) touts its SmartLabel, a technology solution that helps companies get control and visibility of returns and simplifies the process for consumers. Simply apply the already included USPS return label, write the reason for the return and give it to the letter carrier.

Smart e-tailers simplify the exchange process and, in so doing, build loyalty and profits. Companies that want to grow their e-commerce business in 2012 and beyond are taking steps to simplify the process and that’s good news for consumers. Those that don’t will lose business, as reported in 2011 by DC Velocity.

} The newest innovation touted as a revolution in the return process is called EcoReturn (www.ecoreturn.com). This solution not only eliminates all packing slips and return labels, it actually makes the return process enjoyable for the consumer. Scan the QR code on the outside of the box with any mobile device, tap the item being returned, affix the emailed return label and give it to your letter carrier. There is no simpler or more environmentally friendly return process.

Satisfying consumer demands can put e-commerce companies in an awkward position. They may not even know what items are coming back until they arrive on their docks. After the holidays, this scene can resemble that of Mr. Galley’s in Miracle on 34th Street, when the US Postal service dumped thousands of pieces of mail on the judge’s desk. For e-commerce companies, it’s as much fun to receive, open and record the contents of each returned carton, as it would have been for the judge to read each letter and joyously respond. This is costing a significant sum of money that gets passed on to the consumer.

E-commerce companies must find a return solution that can help reduce their carbon footprint, build customer loyalty and save money. Bottom line: Returns Happen — but that doesn’t mean it has to be a nuisance for the consumer or hurt the environment when they do. If you have any comments or ideas on how to simplify the return process, I would love to hear from you.

I hope this helps you Ship Better and Save Money

Finally, new solutions are here and that means a simpler return process and happier online shoppers. Here are some solutions e-commerce companies are deploying to simplify returns, satisfy their consumers and grow their businesses: } Print and include an 8 X 11 label/packing slip with each order.

These labels provide simplicity and convenience since the return label is already built in. Consumers simply write in a comment (reason for return), peel the label, stick it on the carton and give it to the letter carrier. Unfortunately this process creates enormous waste since only about 10% of consumers return their purchases. The other 90% of these slips/labels simply end up in landfills.

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Jim LeRose is Principal of Agile NYC Metro and President of Advantaship.com. Jim 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. Jim welcomes your comments and can be reached at jim.lerose@agile-network.com or 888.214.1763.

Special Guest Column

Year in Review

With Harry Stephens

Looking Back and Looking Forward Anyone involved in the mailing industry most certainly watched the events of the USPS throughout 2011. They could be viewed in two ways: signifying a year where not much happened to change things, or a year where there was actually some progress.

I tend to take the latter view. I watched Pat Donahoe take the helm from Jack Potter during the last quarter of 2010 — at one of the most challenging times in the history of the Postal Service.

I respect him for that and for the leadership he and his executive management team have shown over the past year. His first full year of service — 2011 — was a difficult year for both the US economy and the Postal Service. As the economy remained weak, mail volumes and revenue continued to decline. The Postal Service did its best to meet the challenge by doing the things they could do without the need for congressional approval to reduce costs and increase efficiency—and by listening to those of us in the mailing community. Let’s look at what we did see happen:

2-4-1 – Everybody Wins You may already know that on October 11, 2011, the USPS announced that prices for most mailing services would change again on January 22, 2012. Among the changes are letters (1 oz.), which will see a one-cent increase to 45 cents, postcards will increase to 32 cents, a 3-cent bump, and letters to Canada or Mexico will increase by 5 cents to 85 cents. However, the most important change for those of us reading this publication had to do with First-Class Mail Presort pieces, weighing between one and two ounces. The second ounce is now free.

One might think that this change for First-Class Mail Presort pieces is just something the USPS decided to do along with the other changes to seek better financial health. But that is not the case. The idea of two ounces for the price of one (I like to refer to it as 2-41) was planted long before the decision was announced. This past spring at a Major Mailers Association (MMA) meeting in March, Paul Vogel spoke to those of us in attendance. As the President and Chief Marketing/Sales Officer for the USPS he is responsible for all domestic and international product development, including pricing, placement and promotion. After his talk, one member of MMA approached him with the idea that perhaps the USPS would approve allowing business mailers to mail two ounce pieces at the one ounce rate. Every major mailer at the meeting liked this idea.

Mr. Vogel liked it too, and said he would get back to us.

In the meantime, behind the scenes, we did not stay quiet. My company, DATAMATX, along with 30 first class large business mailers who comprise the National Postal Policy Council, many of which are Fortune 100 companies, are always actively lobbying for lower business rates from the USPS. Many of us are also active members of the Coalition for a 21st Century Postal Service that advocates for business mailers. We knew this was one decision that didn’t need a

ruling by the Postal Regulatory Commission (PRC) or Congressional approval, as it is not a rate increase or a mandate. This position was confirmed at a National Postal Policy Council (NPPC) meeting held after the Major Mailers’ meeting when both Bill Baker, legal counsel for the NPPC, and Steve Sharfman, the PRC General Counsel, agreed that this move would not be defined as a rate case. It would also require very little additional capacity to handle two ounces versus one, and certainly no additional labor, given the fact that staff has already been cut significantly to reduce labor cost. All it would take is for the USPS executive management and its board to act. It didn’t happen in October, but still all of our noise paid off.

The best news is that this change gives our customers the ability to fill that envelope with additional promotional messaging and other information that provides value to the mail and helps to grow their businesses, which is why like to call it 2-4-1 – Everybody Wins.

A summer of QR Codes The public’s enthusiastic acceptance of Smartphones that link to the Internet certainly did not decrease in 2011 and with that came more ways to allow customers to interact with businesses using these devices. With their growth in popularity, you may have already seen QR codes. They have been popping up in magazine ads, catalogs, brochures, outdoor signage and even on some television broadcasts. QR codes are two-dimensional bar codes that, when scanned by the camera on a Smartphone, connect a user to online content. Recognizing consumer fascination with these barcodes, the USPS team kicked off a QR Code promotion last July. The USPS mobile bar code promotion provided businesses with a three percent discount on Standard Mail and First-Class Mail letters and flats that included a mobile bar code. When consumers scanned the bar codes, they might view exclusive offers, video demos or social networking platforms. It was a limited offer for bulk mail only and most likely an experiment to see if making mail more interactive would encourage more direct marketers to use mail to grow business and help keep mail viable. a Harry Stephens is President/CEO and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. You can contact Harry at hstephens@datamatx.com or visit DATAMATX at http://datamatx.com for more information.

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Cloud The choice is yours… but weigh the options carefully Cloud computing has gained considerable attention in recent years as a new way to consume applications, and it has significant advantages. because the mailing industry as a whole covers such a wide variety of data and services, there is a wide ranging set of applications (e.g. database, CrM, billing, etc.), and plenty of opportunities to decide between on-premise and cloud computing options. When determining which type of application is best suited for each step in your mailing workflow, there are four factors that I believe lead you to an objective decision: security, availability, application requirements and total cost. The outcomes for your workflow will vary between all on-premise, all cloud computing and a mixture of both.

Security Considerations

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lish what data will be stored on the vendor’s system (e.g. name, address, telephone, email, invoice number, etc.), and of that data, what is protected information. If your vendor will store protected data, your second task is to ensure the vendor’s security standards align with your organization’s security requirements.

Given the nature of the mailing industry today, there is a wide ranging spectrum of security requirements: from highly regulated and sensitive industries like health care and finance, to marketing materials addressed to ‘Current resident.’ add to that, some organizations work for clients across the spectrum, which makes the analysis of security an important component of any application choice.

When cloud computing is discussed, security is often the primary point of conversation. Organizations go to great lengths to ensure that their valuable data, trade secrets or other confidential information stays protected. In some cases, this is primarily driven by regulatory compliance requirements. Many organizations in the mailing industry find themselves adhering to the most stringent of precautions driven by internal need or external customer requirements, while others determine they need minimal security.

Many cloud computing providers are in familiar territory when it comes to common industry security standards and regulatory requirements such as SOX, HIPPa, SaS 70, SOC, ISO, and PCI. This makes it easy to ask whether a particular vendor can meet your security requirements for any particular step in your mailing workflow. If your organization does not adhere to a particular standard, it is possible a cloud computing provider who does will meet or exceed your security needs.

When security is important, the implications of on-premise and cloud computing must be analyzed. In the case of on-premise, the application is on a system owned by the organization, and it can be configured to function within the current context of acceptable security levels. for example, if your organization installs Microsoft Word and excel on every computer, it is easy to decide to add PowerPoint to every system as well. Similarly, if you are working with client or in-house data on a particular computer, adding another application to that environment does not cause a significant change to where that data goes or where it is stored.

Availability The frequency of use for an application can vary widely, which makes availability another important factor to consider when looking at the difference between on-premise and cloud computing. a small company may have a mailing application that a single user accesses a few times each week. Large printers and lettershops have many users accessing an enterprise level mailing application continuously. These differences in usage impact what kind of availability is necessary to keep an operation running smoothly, and the mechanics of supporting either requires dramatically different amounts of resources.

Cloud computing typically involves storing data outside of your organization’s network. each cloud computing provider is different, not just in their security measures, but also what data will be managed on their network. Two basic tasks will provide the information needed for the decision making process. first, estab-

On-premise applications might seem ideal for frequent usage because they are on a local computer, and cloud computing might seem more appropriate for infrequent usage. In reality, cloud computing can provide significant benefits in high usage scenarios.

Many organizations operate around the clock and have core com-

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to make an application work. When you evaluate applications, you need to understand what you need to accomplish, but the exact features may be vague.

Therefore, it is important that as part of your evaluation you list the features and functionality you require.

This list should include two important categories: ‘Must have’ and ‘nice to have.’ If you are evaluating a GPS navigation application must haves probably include: list of directions, map overview of route and voice guidance for each turn. The nice to have features might include: estimated time of arrival, points of interest along the route, and traffic information.

Think through what you do today and how you might describe that as an application feature. This is more difficult if you have never used a particular application or are exploring new job functions, but the exercise will provide useful insights.

Making the Choice

petencies that fall outside maintaining the hardware, application systems and infrastructure for mailing workflows. netflix explains the company is run on nearly 100% cloud computing, primarily with amazon Web Services. While netflix is a technology company (that also happens to send massive amounts of first Class Mail), they decided to leave the IT heavy lifting to a trusted third party, freeing resources that might otherwise go toward maintaining high availability open for other core business tasks. Small- and medium-sized organizations would have difficulty justifying similar investments into availability in comparison to the average cloud computing provider. When an application is used infrequently and up time isn’t a significant concern, there is more flexibility in availability requirements. In this case availability would not be a significant factor.

Measuring application availability is not isolated to up-time. It can also mean access. Here on-premise and cloud computing differ significantly. On-premise applications are typically physically installed and legally licensed to one specific system. If you are not near that system, it cannot be used. Cloud computing provides greater availability. as long as you have a computer with a web browser and internet access, you can access your application.

The first three factors alone might determine whether or not you can use on-premise or cloud computing applications. If you are still left with two options, the next step is to calculate the total cost of ownership (TCO) for each option. TCO is an estimate whose purpose is to help determine direct and hidden costs of a product or system; in this case an application. The key task in calculating TCO is determining direct measurable costs as well as indirect or hidden costs related to managing either option. When calculating hidden costs, items such as support, updates, training, troubleshooting, hardware and all the other incremental costs need to be included for an accurate figure.

Hard costs like monthly or annual license fees, support fees and other fixed costs are important to the calculation as well. If comparing an incumbent solution against a potential replacement, talk to the person or team that is currently using the application. ask them about the indirect costs and time management related to the current application. Compiling the information for each solution is challenging; however, it is worth the additional effort. Once you have gathered all costs, a simple spreadsheet with a row for each category of cost and a column for each competing application will bring valuable objective analysis to the purchase decision.

Meeting Your Objectives

On-premise applications and cloud computing both offer significant benefits. because of this, it is important to consider both options when building and maintaining your mailing workflow. evaluating security, availability, application requirements and total cost will increase the chances you are leveraging the application that fits best any particular workflow component. Mailing workflows that are built with the best application at every step will find dramatic increases in the return on time and money invested in applications.

Security and availability are essential, but nothing is more important than having the application meet your business objectives. Typically when people write instructions, they document the steps it takes

josh evans is Vice President, Product Development, at Lorton Data. Contact him at 651.203.8208 or jevans@lortondata.com.

www.MailingSystemsTechnology.com a january - february 2012

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The Future of Digital Mailboxes Are we on the brink of a digital mail revolution?

By John Payne & Humberto Prospero

Unlike the title of John M. Cain’s explosive 1934 novel, The Postman Always Rings Twice, tomorrow’s postman may not ring at all. As consumers grow more trustworthy of data security, online bill payment and management are expected to grow exponentially. The challenge is accelerating consumer acceptance so that the predicted growth begins today rather than tomorrow.

After all, companies have been aggressively cranking up their online businesses for more than 10 years.

Because email has been fraught with security issues, banks, retailers and others have spent millions creating secure websites where consumers can order and pay for purchases. People have responded with gusto. Eighty percent of consumers transact business online; 64% pay bills online. Yet the rate of people opting out of receiving paper versions of their bills and statements stands at a mere 15-20%.

Why haven’t consumers switched to a paperless platform en masse? We believe the answer is based on three consumer values that have been missing until now: convenience, control and simplicity. The average consumer receives more than 17 bills each month plus significant quantities of other essential mail (privacy statements, insurance documents, stock disclosures, etc.). Receiving all of these documents every month, one by one, on numerous websites requires significant work on the part of the consumer.

So, despite the appeal of digital documents and interest from early adopters, mainstream consumers are reluctant to take on the extra work of rounding up all their mail. They want a “digital postman” to deliver their electronic mail safely and securely, without any fuss on their part.

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Digital Mailboxes — Poised to Propel the Mail Revolution

Digital postal mail — an exact facsimile of their paper mail — will be delivered immediately into a centralized digital mailbox as documents are made available from businesses. Consumers can access their digital postal mail conveniently, the way they want — through the web, mobile readers and a powerful iPad application. Unlike documents that consumers must search for on different billers’ websites, everything is in a single place that they can control.

How do digital post offices work?

There are a few different digital mailbox solutions on the market today, but for this example, we’ll focus on the one we are most familiar with.

Consumers log on to the website and register their free digital mailbox, which is based on the same physical address that the USPS uses. Once the address is verified via a verification code that is delivered physically to that address, the consumer can start receiving digital postal mail without additional setup. This particular solution we are referencing automatically delivers the full set of communications, rather than requiring consumers to gather additional documents from other sites. This push system is highly convenient and dramatically simplifies the consumer’s process of getting mail. Should a person move, a simple change of address request is made for the digital mailbox to be associated with the new address so consumers keep all their documents forever.

Consumers will find other conveniences, as well, to make their lives easier when dealing with mail. For example, customers can choose how to pay their bills. They can still pay by regular mail, or they can click a button to pay automatically from a checking account or a credit card. No worries about having their documents at hand when they need them, either. The service archives mail forever in a secure document repository and provides an efficient search capability that allows consumers to find their tax filings or financial records easily at any time. A homeowner, for example, could search quickly online, from any computer, for an insurance policy lost in a fire.

Another nice feature will be a chat button allowing customers to click and chat with a company’s representative. Surveys show that chat discussions on the Internet provide better customer satisfaction than on the phone. Plus, it is a more cost-effective solution.

Both businesses and consumers require a speedy, economical and compelling mail solution that solves their issues and meets their needs. The increasing cost of physical communications is simply becoming too much for businesses to bear. Estimates show that large banks, utilities and insurance companies, for example, spend around 50 cents per mailpiece. With the digital mailbox solution, that cost could drop to half of what it is today. As hard copy mail delivery becomes less convenient and less reliable, consumers, also, will begin to step up their demands for better alternatives.

The advantages of digital mailboxes for businesses stretch far beyond cost savings. The solution opens the door for two-way exchanges. Companies can put special offers in with their digital statements, and customers can click a button to accept an offer — an attractive way to increase revenue. Enterprises will

be able to take greater advantage of precision marketing, data analytics and improve customer satisfaction and loyalty through web-friendly methods.

To ensure security, the top digital mailbox offerings employ a double-barreled encryption system — encrypting mail while in motion and at rest. The technology offers consumers an environment free of SPAM, malicious links and worrisome attachments. Encryption is performed in authenticated links to systems, in fat pipes, not trafficking “in the wild” (outside corporate firewalls). In addition, restrictions can be placed on documents, requiring user credentials or other security responses in order to be viewed.

What will digital mailbox solutions mean for the printing industry?

At first blush, digital postal services may seem like a scary thought for transactional and commercial printers. On the contrary, however, printers will benefit substantially if they capitalize on the trend now. Digital postal mail transforms the business liability of physical mail into an extremely valuable digital communications channel and represents the natural evolution of traditional postal mail into the digital marketplace.

Today, clients produce output by creating large electronic files, sending the files to the printer, then to inserters and then out for mailing. With Zumbox, for example, at the point where the files go to the printer, another data stream will send a copy to the secure portal. Consumers will see their mail immediately, and hard copy mail will be delivered via USPS to their physical mailbox, until they choose to opt out of receiving the paper versions.

As a result of economic pressures on businesses, such as using traditional mail, digital postal solutions become an attractive alternative that allows printers to remain relevant in the business-to-consumer communications channel. Printers will be able to provide their customers with a desired service while, at the same time, creating a new revenue stream by leveraging their print-to-mail investments.

Four Major Pillars of Benefits

Cost savings: Service providers are facing ever-increasing costs and lower profit margins. Digital mailboxes enable providers to move to a low-cost model that will help improve margins.

Customer satisfaction and loyalty: Both satisfaction and loyalty can be improved through web-friendly methods, such as chat lines for customer support, which are less expensive than telephone coverage but more highly regarded by users.

Flexible payment options: Consumers can choose their payment method. By clicking a button to choose to pay either by credit card or checking account, users can avoid the postage costs of mailing in their bills and avoid late charges caused by postal delivery delays.

Better messaging options: Companies can send relevant messaging through two-way dialogue and respond quickly to inquiries.

From what they learn through the process, marketers can better tailor their campaigns to hit their target audiences more precisely.

John Payne is CEO, Zumbox & Humberto Prospero is Director of Consulting and Integration Services. Visit http://bit.ly/rwhgAV for more information.

www.MailingSystemsTechnology.com a JANUARY - FEBRUARY 2012

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To Barcode or Not to Barcode –

That is the Question The discounts are attractive, but barcoding may not be right for everyone

My goal here is to give you the tools to make the best decisions for your business around barcoding your mail and getting automation discounts. We are not going to discuss the technical details behind barcodes, but rather, the business reasons of where and when it makes sense. As the self-proclaimed King of Barcoding, I am responsible for over 5,000 companies barcoding their mailing during my 18 years in this industry. I managed major accounts in Boston, grew the only national presort service offering to over 4,000 customers and was in charge of sales for all barcoding equipment for the largest provider. With this title comes responsibility. That is to teach you how to save the most money with the simplest processes that can be set up for your business.

First off, we need some basic housekeeping. Here are the minimum requirements to barcode your mailings: } Pieces – At least 500 pieces for First-Class Mail or 200 pieces for Standard Mail. } Software – Need software that meets all USPS certifications. } Permits – Need to have at least one permit from the USPS. } Preparation – All mailings must have barcodes on each piece, be sorted, placed in trays with tray tags, and reports need to be brought with the mail to the USPS for processing.

Here is a link to the USPS Quick Service Guides, which is an easy way to get specifics for your mailings: http://pe.usps.com/text/qsg300/q000.htm.

Single Piece Rates

Automation Mail with Barcodes

Mail Piece Examples

First-Class Mail Retail Single Piece

First-Class Mail Automation

Standard Mail Automation

Standard Mail Non Profit - Automation

1 Ounce #10 Envelope 3 Ounce Newsletter (6X9)

$0.44 $0.84

$.34-.39 $.59-.64

$.24-.27 $.24-.27

$.14-.17 $.14-.17

8 Ounce Flat (9X12)

$2.28

$1.56-1.92

$.45-.49

$.32-.35 Image One

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By Adam Lewenberg Pros to barcoding: 1. It Saves You Postage! This is the main reason most companies barcode their mailings. (See the chart to the left) As the pieces get larger, the savings can increase dramatically.

Many customers doing mailings without any discounts will also try to apply for Standard Mail rates. Standard Mail is designed for newsletter or a solicitation where every piece is the same and the customer can live with a slightly slower delivery. Things like invoices, statements and checks have to go First-Class Mail because every piece is slightly different or has personal information.

2. Cleaner Addresses: In order to qualify for discounts your mail list must be compared to the national address list held by the USPS. Every barcode software provider will be able to comply with these rules with CASS and DPV certifications. All this means is that inside the software they have every deliverable address and can check that yours matches this list. Common mistakes are fixed automatically and exception lists are produced. Updates are typically provided every one to three months to make sure the addresses are up to date.

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3. Keep Track of Customer Moves: The uSPS requires that you comply with one of several move update requirements. Most of the vendors can link in with the national change of address database and give you the changes real time on your list. This is really helpful for companies to eliminate “undeliverable as addressed” mail. Think about the college alumni department.

How many times have you told your school your new address so they could solicit you for donations?

4. Quicker to Process Mailings: Many barcoding systems come with an envelope printer that can print 2-30,000 pieces per hour. If you have ever tried to feed large quantities of envelopes through your local laser printer or office copier you understand how painful it is. envelope printers can feed large quantities of envelopes quickly and easily and give you flexibility on what parts of the envelope you print. Mailings also print in the proper sort order. Many people have horrible memories of trying to sort mail by hand. all those steps have been eliminated.

5. Faster Delivery: barcoded mail travels faster than mail without a barcode. This is because when you submit your mailing to the uSPS, you have set it up to skip steps. It is in a tray with the correct forms telling the uSPS what they need to do with it. They can then move it to where it needs to go. also, since the uSPS sprays a barcode on every piece, you bypass this step as well.

Cons to Barcoding

Other Options Many companies want the benefits of automation and barcodes but cannot cost-effectively manage it inside their operation. Here are some other methods to consider:

Presort Services – These providers have one or several sorters that are similar to what the uSPS uses in their facilities. These sorters read the address on the mailpiece and spray the barcode on the bottom right. They can then sort the mail into bins to where it is going throughout the country. Presort providers work on a revenue split arrangement with the customer and the uSPS. Here is the most common: first Class Single Piece Postage rate rate the customer meters the mail

$.44 $.414 ($.026 savings)

The presort service sorts the mail as deep as they can get it.

Hopefully most will be to the deepest sort levels the uSPS offers of $.34-.368 and the uSPS pays them the difference. This payment by the uSPS covers their transportation and operations cost as well as their profit margins.

This has been an increasingly popular way to barcode mailings and there are over 250 Presort Service providers in the uS.

1. Software and Hardware Costs: Software/hardware combinations typically start at about $250 per month and can go much higher with faster feeders and color options.

Pros:

2. There Are Many Steps to Barcoding: If mailings are only done sporadically, it becomes difficult to remember all of the steps. as a rule of thumb, make sure that you are doing mailings at least once per month or have staff with experience.

2. They can manage the move update requirements.

3. Who Will Do It: barcoding software is typically loaded onto one PC. Most companies have many departments or people doing mailings. I have seen many barcoding projects fail because the company thought it would train large groups of people to use software and people could share the tool. This never works because of the complexity mentioned above. To barcode mail in house requires one or a few dedicated operators.

4. Taking to the USPS: In order to get automation discounts, mail needs to be submitted to postal centers that accept discounted mailings. not all do and with the uSPS’s budged cuts, this list is getting smaller and smaller. In some cities there are courier services that can be contracted to help with this.

5. Keeping Software Up to Date: In order to qualify for discounts, the software needs to be updated at least quarterly with all of the uSPS updates. again, this is a reason why it is better to have dedicated operators who can manage the updates.

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6. Requires Programming for Window Envelopes: If you want to barcode things like invoices, statements and checks, you will need to have custom programing that can put the barcode directly onto your document.

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1. They do all of the work! They pick up the mail at your office, run it through their sorters and take it to the uSPS.

3. The more you mail, the higher the discount you can typically negotiate.

Cons: 1. The savings are not as great as doing it yourself.

2. These services are most common for first Class mailings. Some presort services do Standard Mail as well but many require the customer to have the mail barcoded up front and they will only move it deeper into the postal system.

3. Many arrangements require you to date the mail for the next day. This can delay local mail. also, many providers are bringing mail to a center that is out of your postal area. This can cause further delays in local mail delivery.

4. Lastly, many presort services will tack on extra fees for services so you have to look at your bills carefully. Know what you are paying for prior to signing their contract.

Mail Service Providers (Mail House) – These services do all of the work for you. They will take the files and take care of all aspects of the mailing.

Pros: 1. You can focus on your core business and leave the mailings to the professionals.

2. They can get it done faster with higher level production equipment.

3. They can typically do different types of sizes and shapes that could not be run on office barcoding equipment (Thicker pieces, glossy stock, varying inserts).

4. You can get the lowest postage rates.

5. There are a huge number of service providers that can be shopped against each other for the best rates.

Cons: 1. These services can be expensive especially on smaller jobs (fewer than 5,000 pieces). Mail Service providers charge set up fees that range from $50-300 per job on top of the per piece costs. This is fine when you are doing large mailings but gets expensive on a per piece basis for smaller jobs.

2. Their bills can be confusing – I have looked at thousands of mail house invoices and they are all different. They each describe their services in different ways and some try hard to disclose very little so you do not know what you are paying for. It is recommended that you get the quote in writing broken down by the fees they are charging for each service.

3. Scheduling – If you are not one of their largest customers you want to make sure that your mailings get the priority they deserve.

As you can see there are a lot of options you can consider. You need to look at the quantity and frequency of mailings to see what works best for your organization. With the USPS deficit increasing by the minute it is inevitable that rates will increase and barcoding can be the best way to save money.

Adam Lewenberg, CMDSS is President of Postal Advocate Inc. with over 18 years of experience in the mail industry. Their mission is to help companies reduce mail related expense and streamline operations. He can be reached at 617.372.8653 or adam.lewenberg@postaladvocate.com.

www.MailingSystemsTechnology.com a JANUARY - FEBRUARY 2012 23

Return Mail

By Jeff Stangle

How to Beat the Costly Challenge

O

utside our industry, return mail must sound so last century. but although mail volume is shrinking, return mail is down just 0.62% since 2004, with around 1.6 billion pieces each year.* This is an acute problem for highvolume mailers in four groups: finance; insurance and healthcare; energy, telco and wireless; and government.

These organizations communicate with customers in critical areas like billing, explanation of benefits (eObs) and regulatory notifications. Here’s the scope of the problem in each group: Finance. an independent PbMS study revealed financial companies account for about 35% of all first-class return mail, more than 490 million pieces per year. Typically, return mail is managed at decentralized locations, as different divisions operate differently. a high-end investment group, for example, won’t make an address change without client approval, while another division will update such data from address correction software. It’s difficult to confirm that everyone’s meeting discount requirements because the customer’s address can vary from database to database.

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21% of return mail, just under 300 million pieces per year. Since customer addresses are tied to the location where service is provided, this group’s biggest challenge is delivering the final invoice to customers no longer in their service area. In addition, each customer can have up to three addresses — physical location, mailing address and e911. and as people migrate to wireless services, it’s harder to keep up with their physical moves.

Government. Similar issues exist in local, state and federal government, thanks to decentralized databases and return mail management. The government should know where americans live, yet 21% of the last u.S. Census mailing was returned undeliverable.

Scoping the Costs by our estimates, each piece of return mail costs the sender an average of $3 — a massive $4.2 billion expense to the industry each year. and that’s just operational costs — postage and printing, handling, research, re-mailing and related processes. The total is much higher, exceeding $50 per mailpiece when you count the value lost with returned communications — delayed and missed payments, additional call center activity and overall customer service costs. This adds up to an estimated $65 billion each year.

Insurance and Healthcare. Our study showed these segments own 20% of return mail, almost 300 million pieces per year. Health insurance and healthcare companies often aren’t in control of address data from employers or government agencies. This adds greatly to return mail expense, with sales reps pursuing clients for correct information. It’s hard to meet uSPS Move update regulations, leaving companies vulnerable to audits and penalties. also, an understanding of CMS (Center for Medicare/Medicaid) regulations on addressing vary from one line of business to another.

The united States Postal Service (uSPS) Move update requirement is also tighter than ever. for both discounted first-class mail and standard mail, organizations have to update customer move information within 95 days of a mailing, or discounts are lost and fines levied. fines can be significant, as the uSPS may multiply the postage deficiency by a number of years, since Move update has been in place since 1997.

Energy, Telco, Wireless. These sectors account in the study for

unfortunately, mailers often think they’re fully compliant, only to

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* uSPS 2011 national Postal forum

discover that certain mailings weren’t. Then they need visibility into all the organization’s mailings — documentation that a Move Update was performed, all reports and proof that full postage was applied where required.

Solutions Mailers usually begin solving their return mail problem with USPS address tools and thirdparty databases. There are also third-party solutions that work with postal certified databases. Tools range from NCOALink to access national change of address information to LACSLink that updates rural route conversions and other address renaming and renumbering.

The Intelligent Mail Barcode (IMb) uniquely identifies every piece in a mailing and can be used with services like the USPS Address Change Service (ACS) to connect the mail piece to your database. The Full Service implementation of the IMb with ACS is part of the trend toward integrated solutions. But every solution has its own trade-offs, so you need to evaluate how each is deployed.

Implementation costs can be significant, so you want to leverage the benefits. Mailers are therefore looking closely at the data from these tools to extract greater value and accuracy. We often find that mailers are suppressing customers from mailing because USPS reason codes on return mail and ACS files were misinterpreted. Suppressing mail to a customer has the same impact financially as completely losing contact.

To make sure your return mail solution has maximum bottom line impact, you need the right tools and services to obtain, check and develop the data and then take proper actions. It’s critical to work with a technology solution provider to develop a roadmap and constantly review the latest tools and services.

The Ideal Answer The one truly effective solution to reducing operating costs and fines is to develop a centralized, automated managed service. This integrates multiple technologies to convert physical mail into usable data and to perform a variety of pre- and post-processing tasks for address updating. Operating this service is a four step process: 1. Document capture and conversion. Once in electronic format, the original mailpieces can be shredded or staged for secondary processing, such as re-mail, reprocessing and address validation with customer follow-up. Data is reported to a host platform for updating and storage.

2. Address management, standardization and search. Advanced search activities include everything from landline and cell phone data to voter registrations and magazine and newspaper subscriptions. These go far beyond what commodity address quality and move update solutions provide.

3. Secondary processing and document repurposing. Setting up back-end business processes and data-driven events makes it easier to re-mail to updated addresses, while automating the reprocessing of addresses with on-going issues. This includes secure destruction of return mail and processes to prevent suppression of updated addresses.

Rebound processing can also feed call centers or trigger other communications.

4. Reporting, auditing and metrics. These processes update the host platform and provide management statistics. All electronic images and files are indexed and archived.

Tracking, analysis and documentation provide metrics to validate process quality.

Because of the complexity of the issues, it’s advisable to work with a consultant with postal expertise to design and implement the correct solution for your company. But the benefits can be huge. Our research confirms that taking a centralized, automated approach to return mail can reduce operational costs up to 70%. The rest of the total cost, such as missed payments, are 100% returned to the bottom line!

Jeff Stangle, CMDSM, MQC, Six Sigma Black Belt is Director of Solutions Development, Mailstream Consulting Pitney Bowes Management Services. For more information, visit www.pb.com/Management-Services.

www.MailingSystemsTechnology.com a january - february 2012

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PRODUCT SPOTLIGHT

ALL ABOUT SOFTWARE BEFORE YOU BUY...

Production Mail Operations: Boost Productivity Streamline your production mailing options and reduce labor costs with MailRoom ToolKit Architect. Eliminate unnecessary manual processing for a true web-to-print or transactional mailing system. Powerful APIs and comprehensive developer resources make integrating best-in-class address quality and postal presorting routines into your workflow fast and error-free.

Satori Software 800.553.6477 sales@satorisoftware.com www.satorisoftware.com

AccuMail Makes It Easy!

Check out the new Mailing Software from Datatech SmartSoft designed to save you money!

AccuMail frameworks Mailers Edition is fast, easy-to-use and packed full of features to make your life easier.

Visit their website for your FREE TRIAL, ask about their Switch ‘n’ Save program and get up to 6 months free!

Datatech SmartSoft 888-227-7221 info@smartsoftusa.com www.smartsoftusa.com

Identify New Movers Quickly Identify new movers quickly, while minimizing change of address data handling and return mail costs, with VeriMove move/update compliance from Pitney Bowes Software. Gain access to 18 or 48 months of move information so you can quickly update customer data with new address information before printing and sending mail.

Pitney Bowes Software pbbi.sales@pb.com 1.800.327.8627 www.pbinsight.com

Match your records with USPS information to identify new addresses of recent moves

Smart Mailers Track. Do You?

Organization in the Cloud

Visibility, predictability, and accountability are essential elements to any effective multi-channel marketing campaign.

Harness them with the Intelligent Mail barcode and Bell and Howell’s Track N Trace. Know when your mail will likely arrive, coordinate marketing channel efforts, and monitor USPS performance. That is truly intelligent mail.

Keep everyone organized with MailShopManagement cloud based software. Quotes, Orders, Production Flow, Inventory, Delivery status, Invoicing, Statements, and Commissions are all available in one package. Spend less time and energy managing day to day operations.

Bell and Howell 800.337.0442 info@bccsoftware.com www.bccsoftware.com/DataQuality/TNT

XeoSource Contact us today for more information.

877.678.7521 info@mailshopmanagement.com www.mailshopmanagement.com

Get Organized

Address Verification & Updating in Excel

SAP BusinessObjects Postalsoft Preferred Reseller

Now you can validate, standardize, correct, and even append new move-update information in realtime, 24/7/365. No Formatting. No Exporting. No Programming. No Hassle!

The SmartMover for Excel add-in is easy to install, and a simple click from inside your Excel document initiates address verification and NCOALink processing.

As a valued reseller, Satori Software now provides highquality service combined with industry-leading mailing preparation solutions to SAP BusinessObjects Postalsoft customers. Take advantage of the outstanding service and technical expertise that helps Satori Software customers achieve success with their mailing solutions.

Melissa Data 1.800.800.MAIL DESSales@melissadata.com www.MelissaData.com

Run, Don’t Walk Many companies claim to have Walk Sequence services, but only a true DSF2 licensee like Bell and Howell can provide you the fastest turnaround, greatest postage discounts, and most competitive rates for your Saturation and Walk Sequence mailings. Check out the facts about DSF2 services and actual licensees at http://ribbs.usps.gov/DSF2.

Bell and Howell 800.337.0442 info@bccsoftware.com www.bccsoftware.com/DataQuality/DSF2

AD#5.12

Print Directly to the Mailstream Install the free MailJack print driver on any Windows PC and, instead of printing documents to a desktop printer, they are securely transmitted over the Internet to Click2Mail.com.

We print them, insert them in an envelope, and mail them next day via USPS. No setup fees, no minimum.

Click2Mail 866-665-2787 www.click2mail.com/print-driver

Satori Software 800.553.6477 sales@satorisoftware.com www.satorisoftware.com

Take Advantage of IMb “Intelligence” Now you can take advantage of the intelligence built into the IMb to update and enrich data, while increasing mailing efficiency. MAIL360 provides IMb assignment management and service standard tracking/reporting. This comprehensive suite helps maximize USPS discounts, tracks and traces mail and manages IMb’s for all enterprise processes.

Pitney Bowes Software 1.800.327.8627 pbbi.sales@pb.com www.pbinsight.com

Get more informed visibility that answers: “Where’s My Mail?”

eDelivery Platform in the Cloud That Gets Results Meeting the needs of mailers focused on print suppression, Kern EDGEmail is a SaaS eDelivery platform that puts the mailer in control of their digital communications. EDGEmail utilizes the cloud to store, deliver, and manage electronic transactions at a fraction of the cost of other eDelivery offerings.

Kern 614.317.2600 edge@kerninc.com www.kernedge.com

Reality Check

With Wanda Senne

A New Approach to Meetings

I

don’t know about you, but I started scheduling meetings for 2012 back in november 2011! along with Outlook and my desk calendar (used for lots of notes and reminders) I also have a color coded MS Word calendar that I carry around with me to help me remember the meetings I already have when asked to participate in yet another meeting (and then I have to decide which one takes priority).

Okay, so you’ve decided you have to meet in person. What can you do to make the meeting valuable?

Do you juggle meetings too? I’m sure you do! not only do you have meetings for your work, you probably also have association and industry related meetings you attend that help you to do your job better. are any of the meetings a clear waste of time? Do you have a meeting just because you’ve always had a meeting at that date/time; or, you haven’t had the “team” together for a while and think it might be a good idea?

1. Start on time 2. Do nOT recap for late arrivals 3. Invite the right people 4. Prepare and distribute an agenda (outlining objectives) in advance 5. List agenda items in order of importance reflecting time targets 6. List who is responsible – who owns the item 7. Keep the meeting on track (pages and pages of advice there or ask robert) 8. allow a process (like a “parking lot”) to add items to be considered later 9. assign a scribe to capture minutes and next steps (distribute them aSaP)

Well, according to Industry Week, the cost of wasted time in unproductive meetings exceeds $37 billion each year! The formula they used was: average hourly rate of participants (conservative cost for managers is $40/hour) times the number of people, times the length of the meeting. Sit back and calculate just one of your meeting costs. Does the answer surprise you? an article in uSa Today from january 2001 reported that executives waste an average of 7.8 hours each week in unproductive meetings.

I’m sure that time could be better spent on other projects. How then, do you decide how to make your time spent in face-to-face meetings productive? first thing to do is decide if the meeting is necessary in the first place. a few questions an engineering consultant recommends you answer will help you decide: } Is there a clear purpose for the meeting? reading reports may not be a good purpose, but developing a plan of action to solving reported issues is appropriate. } Do you need to meet now? If you do not have all the information you need, it would be better to reschedule. } Is there an alternative to meeting? Communicating a status update may be more effective shared electronically, or on a phone call. Interactive messaging on a web event helps you avoid travel expense. } What if you do NOT hold the meeting? If nothing would be missed, you may just have helped save your company some money and be the corporate hero!

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january - february 2012 a www.MailingSystemsTechnology.com

you could reference u.S. army engineer, General Henry robert’s Robert’s Rules of Order (first published in 1876) to maintain order in your meeting; for a more conversational meeting, here are the basics many experts agree on:

Are there different guidelines for conference calls or Web meetings? A few: } understand that you will not receive visual cues (sleeping people or puzzlement) } use a phone in a quiet location with mute capability } Introduce attendees (for small meetings/calls) } reduce background noise (drawers opening, conversations in the hall, papers shuffling)

The next time you are involved with a “boring” non-productive meeting, I found a list of the top 20 time killer activities you can use (ask me and I’ll send them to you). My favorite is called “buzzword bingo.” you create a five-by-five grid and write as many acronyms, or buzzwords generally used in your meetings in the boxes and hand out copies to other meeting participants. Cross off the word when you hear it used. The first person to cross out five in a straight line jumps up and shouts, “bInGO!” you win the game, but probably not a lot of brownie points from the meeting leader! a Wanda Senne is the national Director of Postal Development for World Marketing. Contact her at wsenne@worldmarkinc.com or 770-431-2591.

ApplicAtion Article

Using Message Relevancy to Drive Customer Loyalty Mike Maselli, Vice President, Marketing and Product Management

This is the second installment of “using message relevancy to drive customer loyalty� by Mike Maselli. The first installment of this paper covered how to develop customer profiles in order to identify customer characteristics that influence message reception.

DELIVERING A RELEVANT MESSAGE Once data is optimized, mailers need to start thinking about how they want to deliver their messages.

Mailers, especially those in the marketing departments, rightly focus on delivering information how and where each recipient wants, and on increasing customer loyalty and retention.

The key to achieving that goal without duplicating all systems is being able to design personalized and relevant documents once, and then dynamically deliver via print, internet and mobile mediums, and aggregate all responses and payments and other user activities into a single reporting and tracking system. easier said than implemented, but having a single system that leverages multiple channels provides a lot of options to really connect with users.

DESIGN CONSIDERATIONS you have several options for customers who prefer printed mail. you can add inserts to an existing mailing, or apply the offer to the outside of the envelope or within the body of the bill or statement. you can also list a web address where more information is located, or add a Qr code that enables message access from a smart phone. a 2010 nielsen Company article states that 23% of mobile customers have a smart phone. This is a fast-growing market segment and represents a consumer type that is very attractive to marketers. for the growing number of recipients who prefer electronic delivery, your messaging options include email notification messages and Web pages for document viewing, bill payment and general

account management. Many companies are weary of adding messaging to the email notification because it may cause the recipient to think it is spam and unintentionally delete the message, forfeiting any early payment that comes from customers clicking through upon receipt.

Targeted advertising on Web pages is typically accomplished using text or banners in an easy-to-find location without having to scroll or search for the message. The best-performing ads are in the top third of the page, with horizontal skyscraper ads close to the top of the page averaging the most clicks and vertical skyscraper ads on the left or right-hand side a close second. electronic delivery also offers the ability to capture user click-through data to measure interest in an offer, giving you more information for deciding whether investing in further messaging is warranted.

The other design consideration is how to leverage the best that each medium has to offer. In other words, many end users will want a physical document sent to them with summary information, but will be more than happy to go online for more account details, service options and other promotional offers. This hybrid model addresses the needs of those not ready to transition completely to electronic documents, but who still want the benefits available when smart phones and computers have access to personalized content. Providing clear information on how and where to electronically access information and the information necessary for secure access can also help drive loyalty and build customer satisfaction. Š 2012 Bell and Howell, LLC. All rights reserved. Bell and Howell and the Bell and Howell logo are trademarks or registered trademarks of Bell and Howell, LLC. All other trademarks and service marks are the property of their respective owners. Specifications are subject to change without notice.

Bell and Howell www.bellhowell.net marketing@bhemail.com

www.MailingSystemsTechnology.com a january - february 2012

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Application article

Essential Software Technologies for Improving Mail Delivery The United States Postal Service (USPS) faces severe revenue shortfalls that have forced it to reexamine current business practices. To reduce costs, increase mail volume and enhance profitability, the USPS plans to make major changes in several areas: } Number and location of the facilities it maintains } Quality of service standards it offers } Standardized pricing } Electronic mail induction (eDoc) } Incentives and fees accounting The increasing number of programs designed for mailers using the Intelligent Mail barcode (IMb) reflects the changes that the USPS seeks to drive IMb adoption. These changes will affect the ways in which you prepare your mail, the options you can use to track your mail and your ability to measure the results of your mailings more accurately.

48 months of move information. Mailers can use these solutions to quickly update customer data with new address information before printing and sending mail.

3. Mail Preparation Best-in-class mail preparation solutions help mailers maximize postal discounts on every class of U.S. Mail with presort software that is PAVE Gold-certified in every single category. Look for software technologies that provide four-levels of presort savings and automatically generate the extensive audit trail and mail production reports needed to speed mail preparation and postal acceptance. The best solutions support a wide range of platforms and operating systems.

4. Electronic Induction, Drop Shipment Requirements and Supply Chain Management This technology allows users of PAVE certified pre-sort applications to meet the eDoc requirements for USPS Intelligent Mail Full-Service compliance. Look for solutions that make it easy to change Mail.dat pre-sort information to minimize postage costs, reduce spoilage and speed the delivery of mail.

5. IMb Assignment Management and Service Standard Tracking/Reporting Look for a comprehensive solution to assist with successful implementation of the IMb. Functionality should include the ability to maximize USPS discounts, track and trace mail, manage IMb’s for all processes across your enterprise and more. The best solutions offer an extensible platform for users to take advantage of the intelligence built into the IMb to update and enrich data, as well as increase mailing efficiency.

Mailpiece tracking information is a must-have for today’s mailers As we head into this era of USPS transformation, mailers will need to be prepared with the latest software technologies to minimize the impact to their organizations:

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6. Address Management Workflow and Customer Database Update Address management software automates the cumbersome, manual process of correcting customer addresses. It helps companies handle address changes through a consistent and documented process that maintains the most current contact information, while complying with industry standards and regulations.

1. Best-in-Class Address Coding Best-in-class address quality solutions validate, correct and standardize customer address data. This helps businesses provide more accurate, on-time delivery of correspondence, goods and services, and helps eliminate the operational costs associated with returned or undelivered mail. Look for software that is CASS Certified by the USPS. Also look for solutions that integrate address correction capabilities into legacy applications, including mainframe, UNIX and Windows environments. The technology should offer both batch processing capabilities to comply with USPS regulations and interactive processing for point-of-entry validation or address cleansing analysis.

For more information on the USPS transformation initiative, gaining optimum value for the IMb and improving mail delivery please download the new Pitney Bowes Software white paper at goto. pbinsight.com/imb2012.

2. Move/Update Compliance Move update solutions help mailers identify new movers quickly, while minimizing change of address data handling and return mail costs. Look for software technology that provides access to 18 or

One Global View Troy, NY 12180 pbsoftware.sales@pb.com

january - february 2012 a www.MailingSystemsTechnology.com

ApplicAtion Article

How Do the Recent Rate Adjustments Benefit All of Us?

by Christopher Lien, President, bCC Solutions bell and Howell

On january 22, the Consumer Price Increase- (CPI-) based rate adjustments took effect. While many voiced concern over the possible impact that any increase would have on the industry, these are not the heavy-handed increases that, given their current financial circumstances, the Postal Service would have been justified in filing. rather, they knew that marked increases in mail class rates would have run a likely risk of driving away customers, a major concern that has been shared among many printers and mailers.

Instead, they chose a path that would run the least risk of having a negative impact on customers, while simultaneously helping alleviate some of the organization’s financial difficulties and offering potentially significant benefits to bulk mail customers.

Despite these known risks, the uSPS announced last november their intent to proceed with the exigent rate case, originally filed in 2010. However, when developing the plan that took effect on january 22, the Postal Service did count on other areas of reprieve aside from significant price increases. as hoped, they will continue to urge Congress to make public policy adjustments to mitigate the Postal Service’s anticipated losses and provide them with the flexibility they need to get back on track. In particular, this includes returning some of the overpayment of the pre-funded retiree healthcare coverage. The uSPS is also anticipating the President and Congress to support the five-day delivery request.

That alone could save the uSPS over $3 billion. Hopefully these maneuvers will help the Postal Service avoid raising rates again in the near future.

The recent rate and regulation adjustments are not all about increases, though. There is one important element to the rate ad-

justment that is very welcomed, and that is the Second Ounce free plan for first-Class Mail. even though this might not make much sense when one focuses on the pure profit-growing objective that the Postal Service is trying to reach, it does hold great potential. In talking to some major first-Class mailers, I have found that they are approaching it with caution while remaining optimistic to the possibility of expanded business opportunities.

Having access to a second ounce at no additional fee can be extremely beneficial to mailers. for example, they can use the extra ounce to include additional marketing materials that can help them generate more revenue. In turn, given the return they are seeing on their investment, there’s a chance those mailers could invest extra money in more mailpieces. furthermore, with this extra space, mailers will have more opportunities to experiment with ways to tie direct mail in with electronic communications, inserting materials that leverage the mobile barcode, personalized urLs, and more. These, too, show great promise in growing business, and can strengthen the value of direct mail as well.

In the end, the adjustments in any rate case are unique to each mailer since each mailing itself is unique. as you work to adjust to the new rates and regulations, turn to software providers. We are dedicated to helping you make the necessary changes to your operations to overcome any impact that the new postal landscape has on your business. We will help you leverage the potential of offerings such as the Second Ounce free program, and most importantly, help you continue to make each mailpiece count.

Bell and Howell www.bellhowell.net marketing@bhemail.com

www.MailingSystemsTechnology.com a january - february 2012

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