JANUARY - FEBRUARY 2015 www.MailingSystemsTechnology.com
HOW THE USPS IS TAKING LOST CUSTOMER PERMIT FUNDS AS INCOME PAGE 20
CHOOSING THE BEST
ADDRESS QUALITY SOLUTION. PAGE 8
MAKING YOUR PRINT AND DIGITAL COMMUNICATIONS SYNCHRONIC. PAGE 28
FIND YOUR MAILING SOFTWARE SOLUTIONS INSIDE
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TABLE OF CONTENTS
JANUARY - FEBRUARY 2015 | VOLUME 28 ISSUE 1
Editor's Note A Whole New Look
By Amanda Armendariz
Real Life Management
In Praise of Praise By Wes Friesen
Intro to International Mail
Maximize Your Revenues with De Minimis By Krish Iyer
Special Report – How the USPS Is Taking Lost Customer Permit Funds as Income By Adam Lewenberg
One Strategy for Choosing the Best Address Quality Solution By Bill Jamieson
A Complete View of Customer Relationships — from the Mail Center? By Mike Porter
22 A Good Time for Change
With new leadership at the helm of the USPS, are bright times ahead for the mailing industry? By John Callan
24 Changes Mailers and Shippers Should Prepare for in 2015 By Gordon Glazer
Direct Mail Evolution
How I Added $1.4 Million to my Sales in 12 Months By Joy Gendusa
Informed Visibility: Package-level Detail for Letters and Flats? By Kim Mauch
Direct Marketing 101
Making Your Mailing Business the Best Choice By John Foley Jr.
26 The Risks and Rewards of Mailing in a Regulated Industry
Automating compliance so your clients can focus on growing revenue By Bruce Gresham
28 Sit Back. Take a Breath. Be Strategic.
How to effectively make your print and digital communications synchronic By Kurt Konow
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
Plus, find your options for a new mailing software solution featured throughout this issue!
VOLUME 28, ISSUE 1 MAGAZINE STAFF Publisher Marll Thiede
A WHOLE NEW LOOK
Editor Amanda Armendariz email@example.com Contributing Writers John Callan, John Foley, Jr., Wes Friesen, Joy Gendusa, Gordon Glazer, Bruce Gresham, Krish Iyer, Bill Jamieson, Kurt Konow, Adam Lewenberg, Kim Mauch, Mike Porter Audience Development Manager Rachel Spahr firstname.lastname@example.org Advertising 608-442-5064 Ken Waddell email@example.com Design Kelli Cooke RB Publishing Inc. 2901 International Lane Madison WI 53704-3128 Tel: 608.241.8777 Fax: 608.241.8666 Email: firstname.lastname@example.org SUBSCIRBE Subscribe online at www.MailingSystemsTechnology.com. 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 Call 608.241.8777 Fax 608.241.8666 E-mail email@example.com Online at www.MailingSystemsTechnology.com. REPRINT SALES ReprintPro 949.702.5390 www.ReprintPros.com All material in this magazine is copyrighted ©2015 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.
WITH AMANDA ARMENDARIZ It was just a few weeks ago that we were ringing in the New Year, raising our champagne glasses and cheering as the clock counted down to midnight (or, for those of us with young children, our night probably consisted more of sitting on the couch with our spouses, trying to make it to at least 10 o’clock before crashing.) Either way, 2015 is here and off to a great start. And with the new year comes a new look for us at Mailing Systems Technology. We hope you’ll enjoy our new, streamlined design, which accompanies a couple of new columns — Intro to International Mail and Direct Mail Evolution — as well. So if your new year’s resolution included something on mailing more pieces internationally, or getting the most bang for your direct mail buck, you’re certainly in luck. 2015 promises to be a big year for the mailing industry. With Postmaster General Pat Donahoe stepping down in February and a new PMG, Megan Brennan, taking the helm, it will be interesting to see what changes are implemented that will help ensure the viability of mail. This is not to criticize Mr. Donahoe's handling of the USPS; he did a fantastic job considering the hand he was dealt, and we'd like to thank him for his service with the USPS and wish him the best. And we hope that the new leadership shares his passion for mail and the survival of the USPS. After all, we in the mailing industry know that mail works, so any changes made that allow this valuable communications vehicle to thrive will be gladly welcomed by us! If you'd like, drop me a line at firstname.lastname@example.org and let me know what you think of our new look. As always, thanks for staying connected with Mailing Systems Technology.
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 28, 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
www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
REAL LIFE MANAGEMENT
By Wes Friesen
IN PRAISE OF PRAISE
ee Iacocca once said, “Management is nothing more than motivating other people.” Even though this statement is an over-simplification of what effective management entails — motivation is extremely important. So how do we create a work environment that people will find motivating? Some feel that finding fault and pointing out errors is the key to motivating. But focusing on the negative and downplaying the positive is not the answer. Johann Wolfgang Goethe emphasized the point when he said “correction does much, but encouragement does more.”
happens next drives actual performance. Offering timely and specific praise as progress is made towards the goal will improve performance at every stage. Another benefit of expressing praise and recognition is that every time we show people we care, it’s like making a deposit in an emotional bank account. Making these deposits is important when you need to make a withdrawal by giving negative feedback. Gray Ridge, CEO of the WD-40 Company explains it well. “If you don’t have enough emotional deposits, when you have that tough conversation, it’s going to feel like an attack and it’s going
“If managers want to create a workplace environment where people thrive, tap into the benefits of praise. It costs nothing and pays big dividends to both giver and receiver.” Ken Blanchard, noted management consultant, speaker and writer.
Why Praise and Recognition Are Important According to Tom Rath from Gallup, research has shown that “employees who report receiving recognition and praise within the last seven days show increased productivity, get higher scores from customers, and have better safety records. They’re just more engaged at work.” Praise and recognition supports a “high-expectation, high-support” philosophy that can maximize long-term results and relationships. This approach starts with setting expectations and goals with employees — but doesn’t end there. Setting a goal starts the behavior, but what 6
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
to hurt. But if you have enough deposits, the employee will already know that you mean them no harm and instead recognize that you’re trying to help them.” Receiving praise and recognition benefits the receiver — but also benefits the giver. Recent research by the University of Pennsylvania on happiness and well-being found that the act of expressing gratitude is a major contributor to overall happiness. Researcher Sonja Lyubomirsky found that people who express gratitude are likely to be happier, more hopeful and energetic, and to feel positive emotions more often. They are also more forgiving, empathetic and helpful while being less depressed, envious and neurotic.
Keys to Effective Praise and Recognition Effective praising should be sincere, specific, timely, frequent, based on current performance and personalized to the receiver. Ken Blanchard, Vicki Stanford and David Witt have developed a TRUE Praise model which can help us be more effective in giving praise and recognition: Timely: Praisings must be immediate and specific. Tell people exactly what they did right as soon as possible. For example, "You submitted your report on time Friday, and it was well-written. I was able to present your data at the meeting.” Statements like “Keep up the good work” are less sincere and not specific enough to be effective. Responsive: Find out how people want to be praised. If someone doesn’t like to be praised in front of peers, then the praising should be delivered privately. The point is to be aware of the needs of the people receiving the praise so it is meaningful to them. Unconditional: Deliver praise without evaluation or strings attached. Praise should not be given with something expected in return. It should be given freely when deserved. Enthusiastic: Give sincere and well-intentioned praise. Speak from the heart and tell people how you feel about what they did. For example, “I was so proud of you after hearing your financial report presentation. I want you know how good I feel about having you on our team.”
The Five-to-One Ratio Over the past decade, scientists have explored the impact of positive-to-negative interaction ratios in our work and personal life. They have found that this ratio can be used to predict — with remarkable accuracy — everything from workplace performance to divorce. And independent research has landed as the ideal ratio for success and happiness to be five positive comments for every one negative (i.e. 5 to 1 ratio).
Researchers and consultants Emily Heaphy and Marcia Losada examined the effectiveness of 60 leadership teams. The driver that distinguished the most successful teams from the least successful teams was the ratio of positive comments to negative comments. Top performing teams gave each other more than five positive comments for every criticism, while the lowest performing teams gave each other three negative comments for every positive one. Psychologists Donald O. Clifton and Tom Rath wrote the book How Full Is Your Bucket? Included was their research into what the positive-to-negative ratio should be to maximize productivity and well-being. Guess what they concluded? Five-toone ratio positive over negative.
Researcher John Gottman has studied relationships for over 40 years, and has also found the magic ratio to be five positive for every negative. In one specific study using the 5:1 ratio, which Gottman dubbed 'the magic ratio,' he and his colleagues predicted whether 700 newlywed couples would stay together or divorce by scoring their positive and negative interactions in one 15-minute conversation between each husband and wife. Ten years later, the follow-up revealed that they had predicted divorce with 94% accuracy! Why are so many positive comments needed for every negative one? Reason is that people are emotionally conditioned to absorb the negative more deeply than the positive. If you reflect back on your own life experiences, you will know this is true.
Bringing It Home The starting place to see more frequent praise and recognition in our work place is for us as leaders to set the example. Gandhi was right when he said, “You must be the change you wish to see in the world.” I would like to close with a couple of quotes from two of our country’s most successful entrepreneurs and business leaders. Mary Kay Ash said, “There are two things people want more than sex and money… recognition and praise.” Sam Walton advised us to “appreciate everything your associates do for the business. Nothing else can substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune.” I wish you well as you model and develop a culture of praise within your team! ¾
Wes Friesen, MBA, CMDSM, MDC, EMCM, MCOM, CBA, CBF, ICP, CCM,CMA, CM, CFM, APP, PHR is the Manager of Billing, Credit and Payments for Portland General Electric, a utility in Portland, Oregon that serves over 830,000 customers. Wes leads his teams with the able assistance of Supervisors Eric Houger, Jan DeMeire, Heidi Fouts and Matt McHill. Check out his personal web-site for free information (www.wesfriesen.com). He can be contacted at email@example.com.
www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
By Bill Jamieson
ONE STRATEGY FOR CHOOSING THE BEST ADDRESS QUALITY SOLUTION
ach year roughly 4 billion mail pieces are destroyed due to poor address quality. Software is essential for ensuring your mail piece arrives where and when it should. There are many address quality solutions and vendors in the postal industry. Choosing the right one for your business is not a trivial task but can be simplified with a few suggestions.
ribbs.usps.gov/ncoalink/documents/tech_ guides/CERTIFIED_LICENSEES/ for more information) You will have to decide whether to use a Limited Service Provider (18 months of data) or Full Service Provider (48 months of data) or both. By choosing a vendor that supports both LSP with ANKLink and FSP processing you get the full benefits of 48 month data but at a fraction of the cost.
Start with USPS Certified Software
Consider the Vendor
CASS certification is required to qualify for the best USPS discounts. More importantly, it provides a minimum performance benchmark for all address quality software. The USPS RIBBS website (https://ribbs. usps.gov/files/vendors/cassn01d.TXT) provides a list of 49 CASS-certified software vendors and 78 CASS-certified products. Fortunately, the list contains some more information that can help. This CASS list contains a platform field that you can use to reduce the number of products down to a specific operation system platform that matches your production environment. Linux shops should be cautious here, as the list of software may include Windows software that works through a Windows emulator rather than natively on Linux. This platform field can also be used to find solutions that use the most advanced 64 bit platform architecture. This CASS list contains 11 data product certification levels (ZIP4, CR5, 5D, LACS, SUITE, ELOT, DPV, DSF2, RDI, National, and State). One quick way to weed out the wheat from the chaff is to pick software and vendors that are certified for the most options. Making an investment in address quality should include a change of address solution through NCOALink. There are lists of certified NCOALink vendors on RIBBs that can be combined with the CASS list above to continue narrowing down the search for the best address quality solution. (Visit https://
In my last article, â€œOnly You Can Win the War on UAA Mail,â€? I mentioned private datasets that can augment the postal datasets and give a much better chance at a successful delivery and response. My advice is to look for vendors that can support both postal and
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
an on premise solution will offer the most security, followed by services and cloud solutions. Do not pass sensitive contact data to a vendor if you do not trust their processes for ensuring your data is secure. Look for a vendor that has customer support written into their DNA. Being able to reach out to a qualified support person who understands address quality is a real benefit. If your software vendor has a professional services team and experience integrating address quality solutions, you should be able to benefit from their experience to help improve address quality workflow efficiency. Pre-sale support is an indicator of post-sale support. If your sales person is responsive and knowledgeable, it is a good signal that the support team is
Performing a trial run of the software before purchasing is critical. Key performance indicators for address quality software include speed, match rate, accuracy, and volume. non-postal data lookups (proprietary change of address, proprietary address resolution, and suppression lookups). In addition, look for software that will identify waste or mistakes in your address list. Software with a good duplicate removal and merge/purge tool can pay for itself very quickly. If your company does manual address entry, look for a software that can correct an address at the point of entry. Understanding the security risk that your company can bear is critical when purchasing an address quality solution. In theory,
as well. To find the vendor with the most loyal customer base, ask for referrals that most closely match your business and interview these customers.
Benchmark the Software At this point you should have narrowed down your list of software and software vendors to a handful of choices. Comparing these choices based on cost and benefits is the next step. There is a range of prices in the marketplace for address quality software. Be
aware of purchase price, renewal price, option prices, and integration/disintegration costs. Make sure these costs are in alignment with the value that the software provides and are not out of line with other similar featured products. Performing a trial run of the software before purchasing is critical. Key performance indicators for address quality software include speed, match rate, accuracy, and volume. Average address quality software can process around 1 million records per hour. Higher quality software will move the needle up to over 10 million records per hour. Processing speed is dependent on the system architecture so make sure you benchmark each address quality software using the same hardware.
Software that can make a higher five-digit match rate will help save significantly on postage. I have seen large volume mailers save millions by upgrading to an address quality solution that improved their match rate by as little as three percent. Be careful that a higher match rate does not negatively impact the accuracy of the match. Fortunately, CASS certification sets a minimum standard for all address quality software. However, do your own side by side comparisons and make your own determination for which software provides the highest accuracy. Lastly, make sure your benchmark includes a stress test. A robust address quality software should be able to handle high volumes of data for a long period of time without failing. By stressing the software
you can tell a lot about the overall quality of the solution. If the software fails elegantly and does not destroy any data, this is a good sign that the software was well designed. On the other hand, if a failure results in corrupted data then you should be concerned. Finding a robust address quality software and software vendor will undoubtedly add value to your business. My suggestions above simplify the buying process by using the information that is easiest and quickest to obtain to narrow your search first. This will give you more time to perform benchmark testing against a small handful of solutions. Hopefully, this buying strategy will help you choose the best address quality software and software vendor for your business when the time comes. 他
Bill Jamieson is Senior Product Manager, BCC Software. He can be reached at BillJ@bccsoftware.com or 585.272.9130 ext 3388. Visit www.bccsoftware.com for more information.
www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
INTRO TO INTERNATIONAL MAIL
By Krish Iyer
MAXIMIZE YOUR REVENUES WITH DE MINIMIS
any businesses shy away from utilizing a postal option when sending international mail and parcels. Fear of potential duties and taxes or uncertainty about mail and parcels being held or returned cause the most anxiety. Complicating this problem is the fact that few, if any, international mail entities have the ability to collect duties and taxes from the initial sender or recipient. This wrinkle could result in an unpleasant after-the-fact bill from a destination country’s customs authority to a recipient many months after a shipment has been delivered. This possibility poses a particular problem for e-commerce and catalogue retailers who have to balance the use of a mail service to keep international shipping cost low with the desire to offer end customers a secure and efficient experience free of post facto billing. With this in mind, the best solution is focusing on countries with a high de minimis value.
What Is a De Minimis Value? For US export purposes (and inbound country import), a de minimis value is a threshold amount at which mailers can import an item into a country without having to pay a duty or tax. Although there are exceptions to this rule on certain items — textiles are generally problematic for import regardless of value — countries with a high de minimis value are excellent candidates to consider when sending parcels or mail internationally.
The Land Down Under
where the de minimis values are high; it’s an excellent “test market” for mailers who wish to start sending mail and parcels internationally. Currently, the Australian de minimis value is 1,000 AUD (Australian Dollars), approximately $829 at the time of this writing. The value of typical US export mail or parcel shipments fall far less than this amount, which makes Australia a great market. Other markets with a high de minimis value include: £ New Zealand: 400 NZD (New Zealand Dollars), approximately $330 £ Honduras: $500 £ Ecuador: $400 £ Singapore: 400 SGD (Singapore Dollars), approximately $300 £ Dominican Republic, Peru, Panama and Uruguay: $200
Beware of Regulations on Imports The fact that these markets have high de minimis values does not automatically mean it is easy to send mail or parcels from the US. It is important to know the types of shipments that have restrictions on importation. Restrictions may include the amount an individual can import into a
country in a year or an outright ban on the item being mailed. In general, these categories tend to fall outside the de minimis and may be difficult, if not illegal, to send using an international mail service: £ Jewelry £ Textiles, especially in countries known for exporting them (i.e. wool in Australia and New Zealand) £ Alcohol £ Tobacco £ Lottery tickets or gambling-related items £ Medication and pharmaceuticals £ High-value electronics £ Used or refurbished items £ Literature and printed material featuring political points of view
International Mail Information Resources Consult with a licensed customhouse broker and utilize the commodity look-up feature on www.export.gov to understand the regulations and restrictions that may affect international mail. With a little bit of research, mailers can expand their businesses to reach potentially lucrative markets around the globe. ¾
With a little bit of research, mailers can expand their businesses to reach potentially lucrative markets around the globe.
Australia is the best example of a country
Krish Iyer is Director, Product Marketing, Shipping & Logistics Solutions for Neopost USA. Neopost USA provides mailing, business communication management and shipping solutions. For generations, the company has worked with its customers to prepare, deliver and manage their customer communications in the most secure, efficient and professional manner possible. For more information about Neopost USA, visit www.neopostusa.com.
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
Conquering the Global Marketplace Over the past 30 years, Melissa Data has partnered with technology companies at the forefront of innovation with a multitude of reference data sources to provide our customers with the most viable information possible. That’s not only postal address data from USPS, Canada Post, Deutsche Post, and Royal, but business data, demographics, geographics, property info, and international datasets packed with valuable information our customers can use for effective direct mail sales and marketing initiatives. A strategic asset to the Melissa Data operation is our core of technology and service partners, like Microsoft, Oracle, and Salesforce, that empower our ability to communicate effectively with audiences that may not be aware of the technologies our solutions support. Any business that has a true desire to expand globally will benefit with the support of service partners that are key to optimizing your destination markets, expanding your focus, meeting specific retailer requirements, and getting you to the market quickly. As a global enterprise, it‘s vital for e-commerce websites to be able to properly format and verify as many addresses as possible to enable efficient deliveries to the recipients at the right address… and in some areas of the world, at the right time. One
major consideration for the delivery of mail and packages in parts of the world is based on the ability to know the “where and when” of recipients to coordinate a timely delivery. And that is accomplished through the power of mobile applications. Sales, Marketing, Service, Responding, Delivering - to the whole world. That’s the future. We need to spread our wings, and our websites to encompass global, cross border commerce with every communication touch point opportunity we can muster… and there’s no better place to start than the mailbox… with intelligence, accuracy, flexibility, and resourcefulness. Melissa Data: At your service.
www.MailingSystemsTechnology.com a JANUARY - FEBRUARY 2013
By Mike Porter
A COMPLETE VIEW OF CUSTOMER RELATIONSHIPS – FROM THE MAIL CENTER?
key to customer retention is developing a comprehensive understanding of each customer’s interactions with the organization. What have the customers bought, and how often? Have they called customer service? What offers have been presented to them? Which pages have they visited on the company website? What payment method do they use? Answering questions such as these to get a complete view of each customer’s relationship with a company can be a tall order. In most companies there is no central repository to store details from sales, marketing, customer service, billing, and other customer touch points. Surprising to most executives, the place that comes closest to a corporate-wide snapshot is probably the mail center. Communication tracking systems used by corporate document centers can be a source of valuable customer relationship information. Automated Document Factory (ADF) systems can tell an organization how and when each outbound communication to a customer was distributed. It can reveal customer communication channel preferences and monitor the status of messages. Though they use the information only for facilitating the creation and distribution of messages, the document center knows quite a bit about customer preferences and behavior applicable to other parts of the company. They know which customers pay their bills by check. They know when customers have moved. They know if there are multiple customers at the same address. The ADF data can even allow the document center to detect when customers stop
using an email address previously proven effective as a communication channel.
How Mailing Data Helps Customer Relationships Customers, particularly those who communicate electronically, may not inform a company directly when they move to a new address. They can still access their bills or statements online and they will continue to receive alerts via text. Customers may believe physical address updates are unnecessary. The only department likely to know the customer has moved is the mail center. Processing mail files through the National Change of Address database (NCOA) provides that information. NOTE: I advise our clients to keep processing files through NCOA even if their customers have gone paperless. There are plenty of times when having current postal addresses on file are beneficial. There could be lots of relationship and business opportunities associated with a customer move. A company might want to let customers know about stores or facilities located near the new address. There may be special events of a local nature to be promoted. Proactively answering common questions from movers can cut down on calls to customer service. Moving to a new house or apartment may ignite a need for additional purchases or new services. It could be an ideal time to offer a discount on window coverings, lawn mowers, or home security services. Insurance carriers may need to adjust premiums based on the location of the customer’s new home. Tax rates may need adjusting. The possibilities are endless.
Customer Communications Info + Other Sources = New Insight When combined with information acquired from other parts of the organization, data about customer communications can provide much-needed insight into customer behavior. Suppose a company redesigns their bills or statements. Understanding when documents are delivered is important when evaluating subsequent website traffic or the types of calls to customer service. This is how an organization can gauge the impact of the document modifications. Without data from the document center, segmenting the analysis by bill delivery channel or studying the intervals between document receipt and customer action would be impossible. Marketing departments can find information gathered by the corporate ADF and other document operations data sources most useful. Companies judge the effectiveness of email marketing campaigns, for example, on response rates and conversions. The mail center can track emailed notices or other documents that have historically been delivered but not opened. This could indicate the customer has abandoned an email account. Eliminating these types of email addresses from the campaign can result in a more accurate measurement of campaign effectiveness. Companies can put customer communication data collected and analyzed by document centers to use improving operations in many ways across the enterprise. The financial impact to organizations finding new ways to leverage information they already have will easily outpace the original benefits used to justify the purchase and implementation of ADF systems in the mail center. ¾
Mike Porter is President of Print/Mail Consultants, a firm that helps companies lower costs, develop future strategies, and improve quality in their document operations. Connect with Mike directly at firstname.lastname@example.org. Or visit www.printmailconsultants.com and sign up for Practical Stuff, a free newsletter for document print and mail professionals.
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
Mailing Software Vendor or Postal Industry Partner? USPS recently announced its first postage increase for 2015 (April 28) and another may be coming. What you may know better than anyone is this increase alone may not be the most costly change for many mailers. As updates to postal regulations have become more frequent and far-reaching, you‘ve probably found yourself spending more time trying to keep track of the changes than on your core business objectives. That is exactly the reason your mailing software vendor should be working on your behalf in the industry both to deliver the technology needed to run your mailing operation and the guidance you need to capitalize on these changes.
What you gain with Satori Software Peace of mind. As USPS works to rebuild in this digital age, requirements for preparing and submitting mail seems to change with every CASS and PAVE cycle. Our customers rely on our solutions to deliver communications, build relationships with their customers and run their businesses more efficiently. We take this responsibility very seriously. We understand that regulatory changes impact every part of your mailing operation from requirements for list accuracy and sorting to printing thresholds and documentation. Your mailing software vendor must take time to understand your business, your challenges and your goals and objectives. In the postal industry, it’s critical that your mailing software vendor have both deep postal industry experience and influence to help you navigate important initiatives that impact your bottom line.
Help when you need it. We share what we learn so that you can prepare your mailing operation for upcoming changes. Our postal experts host live and on-demand webinars, post updates to our On the Envelope blog and can be found at many industry events. To get started, subscribe to our blog and newsletter to receive updates at http:// www.satorisoftware.com/mail-solutions/learn/. When you have a question about our mailing solutions — that can’t be answered in the documentation or knowledge base — our team of support engineers has your back. Satori Software has been delivering data quality and mailing solutions for over 30 years. We have dedicated development teams, customer support and professional services personnel that are experts in the postal industry. Many former Firstlogic and Postalsoft employees who previously worked on the discontinued products have joined our team. We encourage you to see for yourself the ongoing commitment to the industry that Satori Software brings to you. For more information, call 800-553-6477 or visit www.satorisoftware.com/smoothmailing.
Industry influence. Satori postal experts, including Senior Director of Postal Affairs Bob Schimek, participate in key associations, helping to form and drive the rules and regulations that propel the postal industry. These organizations, which include the Mailers’ Technical Advisory Committee, PostCom and IDEAlliance, work directly with USPS to ensure that planned changes for them to be more fiscally efficient also support your continued business needs. Rather than attend every postal advisory meeting and read every change to the DMM, you can count on Satori postal experts to have done so. We work hard to ensure your mailing technology meets the latest industry requirements.
DIRECT MAIL EVOLUTION
By Joy Gendusa
HOW I ADDED $1.4 MILLION TO MY SALES IN 12 MONTHS
n Mailing System Technology’s April 2014 newsletter (subscription highly recommended!) I wrote about the need for direct mail companies to adapt to the changing marketplace or suffer a slow, painful business death. You can read that column for more context at http:// tinyurl.com/JoyGendusa, but for the purposes of this article, all you need to know is that at the end, I offered a solution: a new direct mail product that uses Google to give customers an integrated online (Google) and offline (postcards) marketing system. Imagine all the lead generation power of direct mail coupled with ultra-affordable and automated online follow-up. The product is called DirectMail2.0.
A Personal Example In the first 12 months of using DirectMail2.0, I added $933,000 to my overall revenue from this product alone. My best 12-month period (in terms of revenue added by DirectMail2.0) is $1.4 million, and this contributed directly to my bestever overall revenue year (2014), in which we finally broke $22 million! The reason is simple: It works.
Money Talks Dr. Amit Khanna, a dental practitioner in Hollywood, MD, is an excellent marketer and a disciplined mailer. If it works in the dental marketing game, Dr. Khanna knows about it — and uses it! He was one of the first clients to hop on board the DirectMail2.0 train. Here is how his mailing history looks: 2009–2010: Mailed 6,000 postcards monthly 2011–2013: Mailed 12,000 postcards monthly
2013–Present: Added DirectMail2.0 mailings After implementing DirectMail2.0, his new patients per month jumped 57%! Let’s break that part down financially from the client’s point of view, since that is the real deal-maker for reorders. £ Mailing 12K/month: An average of 83 new patients/month ¡ Each patient costing $1,453.50 £ Mailing 12K/month WITH DirectMail2.0: An average of 154 new patients/month ¡ Each patient costing $553.79 To understand Dr. Khanna’s overall return on investment (ROI), we first have to figure out the lifetime value of each new patient…
revenue to an entirely different plane. That speaks volumes about why DirectMail2.0 increases reorders. Who wouldn’t reorder with results like that?
So What Does a 70% Reorder Rate Mean for Your Revenue? Let’s look at a couple more examples from a print/mailer profitability standpoint, because I know you all want data and hard numbers…
ABC Spectrum Preschool £ First order: 2,700 pieces - $1,238 £ Second order: 12,000 pieces - $3,069 £ PLUS $600 in maintenance fees since first order £ That's a 243% increase in marketing spend!
Dr. Jacob Plawner £ First-year patient value: $2,000 each £ Patient value the following years: $300 each £ Average number of years a patient stays with him: 6.4 years £ Lifetime value of each patient: $3,920 ¡ 2,000 + (300 x 6.4) = 3,920 Now comes the fun part! Let’s talk money: If you take the aforementioned 83 new patients per month (without DirectMail2.0) and turn that into revenue per patient in the first year, Dr. Khanna will recognize $325,3560 on average per month. Post-DirectMail2.0 however, with the increase to 154 new patients, the good doctor is looking at $721,280 on average per month! Can I get a witness? Just adding DirectMail2.0 almost immediately brought his
£ £ £ £
First order: 17,000 pieces - $2,000 Second order: 48,000 pieces - $7,085 Third order: 108,000 pieces - $13,916 1,372% increase in marketing spend!
Bottom line: DirectMail2.0 adds more money to YOUR bottom line. And the onboarding process is dead simple: They’ll get your online account set up with your company’s branding so that it looks like YOU are the direct line to DirectMail2.0, and they’ll train your sales people on how to set up and run top-notch DirectMail2.0 campaigns. ¾
Joy Gendusa is the Founder and CEO of PostcardMania, a fully-integrated marketing firm specializing in direct mail. She used postcards to grow PostcardMania from just a phone and computer to a $22million enterprise in less than a decade. Visit www. postcardmania.com for more information.
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
SAP Postalsoft DQ 8.0 End-of-Life… It’s Not Too Late! Happy New Year!! 2015 is off to a fast start and hundreds of companies have added the looming SAP Postalsoft DQ 8.0 end-of-life as one of their new year’s top priorities. With the end-of-life approaching on March 31st, customers can rest assured that the simple upgrade to Firstlogic Data Quality (DQ) 9.0 is their best option. The ACE, DataRight IQ and Match/Consolidate solutions have been cleansing addresses, standardizing data, and matching and consolidating customer data for over 30 years. Last year, Postalsoft DQ 8.0 customers had plenty of time to explore their options. They could have reengineered their address and data quality applications and processes using a new software tool, but this option is no longer practical. At this point, customers can stay the course and continue to leverage their Postalsoft DQ 8.0 investment by performing a simple upgrade to Firstlogic DQ 9.0.
is the company SAP trusts to provide Postalsoft ACE, DataRight & Match/Consolidate customers with upgrade options to ensure business continuity. About the Author: Ken Kucera is the Managing Principal of Firstlogic Solutions, LLC. Ken has over 30 years’ experience in delivering enterprise software and consulting solutions to customers. Prior to Firstlogic Solutions, Ken led a delivery team at SAP BusinessObjects specializing in data quality solutions including Postalsoft DQ 8.0 and SAP Data Quality Management (DQM). Copyright © 2015 Firstlogic Solutions, LLC - All Rights Reserved. Firstlogic, Firstlogic Solutions, ACE, DataRight IQ & Match/Consolidate are registered trademarks of Firstlogic Solutions, LLC. Postalsoft is a registered trademark of SAP America, Inc. All other trademarks are the property of their respective owners.
The 3 Step Simple Upgrade Process: Step 1: Install Firstlogic DQ 9.0 Step 2: Run the Edjob utility to update your Job-Files. Step 3. Test your updated Job-Files. After the upgrade, you’re ready to run your existing business processes, applications, scripts and Job-Files “business as usual.” Your applications dependent on the ACE Fault & Error Codes also continue to run as usual. And if you leverage the statistics files produced by ACE, you’re good to go. For those customers concerned about being supported on all operating systems, you’re covered there too with support for Windows, Linux, Solaris and the AIX operating systems. Finally, Customers will be able to leverage the same CASS & NCOALink Certified address cleansing engine as embedded in Postalsoft DQ 8.0 leveraging your existing NCOALink certification. It’s Not Too Late… A simple upgrade from version 8.0 to 9.0 takes hours, not weeks. And since your team is already familiar with the ACE, DataRight IQ and Match/Consolidate applications, there’s no learning curve. As the leading SAP Gold Partner specializing in the SAP Postalsoft DQ and SAP DQM platforms, Firstlogic Solutions
www.firstlogicsolutions.com 1.888.725.7800 email@example.com
By Kim Mauch
INFORMED VISIBILITY: PACKAGE-LEVEL DETAIL FOR LETTERS AND FLATS?
ast fall, USPS announced that it has approved funding for the next phase of Informed Visibility. Informed Visibility, or IV, is an initiative to give mailers insight into how letters and flats are processed, and ultimately delivered. Before IV, letter and flat mailers were able to get piece scan data through the USPS Confirm program, later renamed IMb Tracing. The piece level scans are available free for participants of Full-Service. These scans are generated as letters and flats are processed on automation equipment, a passive process. The data is then collected by the IMb Tracing program, and provisioned to customers as raw data within one to two days. This information can be used to infer the eventual delivery date of the mail, and identify processing issues within the mail stream. USPS actively uses this data to ensure that mail is meeting published service level agreements. However, significant gaps in data are likely when using IMb Tracing data alone. Pieces without an Intelligent Mail barcode, carrier route bundles and pieces in finely sorted containers are unlikely to receive scans through most of the mail network. The first phase of Informed Visibility added additional layers of scanning information. Intelligent Mail tray and pallet barcodes are scanned throughout the mail stream, and this data, combined with the nesting information provided in electronic documentation, can be used to infer the location of each piece of mail in the early stages of mail processing, when it is still in the original container. Bundle scanning has recently been added, finally providing tracking information for carrier route bundles.
The Flaw in the Machine Many mailers are taking advantage of the data from IMb Tracing and Informed Visibility to monitor mail delivery, time follow-up events such as multi-media campaigns, and even pre-plan mail entry to create the most impactful mail experience for the end recipient. However, there are two crucial flaws in the current infrastructure that make the data less useful than it could be. The first issue is with the final scan event. Currently, pieces get a final scan at the last piece of automation equipment available at their last sorting facility. This is usually at the local SCF, or at larger Delivery Units. Once this final automation pass is complete, the final scan indicates that the mail piece is “out for delivery.” However, it can take up to 24 hours or more for the piece to be delivered, as the scan only indicates that the piece is on its way to the mail carrier. This makes timing follow-up activities such as reinforcing emails difficult. The other, and much more troubling, issue with both IMb Tracing and IV is the data latency. It’s unusual for mailers to get scan data for their mailings sooner than 24 hours, and 48-72 hours is the norm. With this latency, mailers get information about processing problems, mail piece movement and delivery information up to three days after the event itself. In a real-time world, it is difficult to react to such out-of-date data.
Enter Phase Two USPS has been tight-lipped about the actual features that will be available once phase 2 of IV is released, but it will be a significant upgrade to the system used today. Real-time data provisioning isn’t achievable
with the current system, so IV version 2 will likely re-write much of the current infrastructure. Mailers could receive scans within a half hour of the scan event, making tracking mail more actionable. In addition, there has been talk of additional processes to capture passive delivery scans as well. Rather than have the carrier scan each piece as it is placed in the mailbox, Geo-Fencing has been proposed. With Geo-Fencing, various locations on each route could be equipped with a scan location, and as the carrier passes that location, mailers and USPS could infer that all mail slated before that location has been delivered for the day. New scanner technology is already being deployed to carriers for packages, which could be re-purposed to collect the passive scans for letters and flats. With enough scan locations for each carrier, mailers could receive a delivery notice for a mail piece within an hour, allowing them to trigger follow-up activities such as emails or phone campaigns. With the growth in ecommerce and package volumes, USPS has spent a lot on improving its package tracking technologies, which has been received well by the public. There is still a lot to learn in this space, but the Postal Service is gaining market share due to its efforts. By adding more value to the mail for letter and flat customers by improving the timeliness of the scan data, USPS could increase revenue and volume, drive adoption of advanced mail preparation like Full-Service, and stem the tide of electronic diversion. While details about IV are still murky, the potential of keeping mail relevant and actionable could be lucrative for both USPS and the industry. ¾
Kim Mauch is a subject matter expert in mailing preparation and submission at Satori Software. Contact her at firstname.lastname@example.org.
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
DIRECT MARKETING 101
MAKING YOUR MAILING BUSINESS THE BEST CHOICE
hat good would a menu be on the door of a restaurant if it told the hours of operation, but didn’t list any of the food it offers? I think the answer is obvious; it would not be an effective menu at all. That’s why I find it so surprising that print, mail, and marketing service providers continually provide irrelevant first impression details such as who and when they were founded — forgetting to showcase all of their delicious offerings. When you discuss your affiliated mailing business to prospects, do you mention the real, practical ways your solutions can solve their problems? The point is, if you want to grow your customer base and increase long-term projects, you need to market in a clear, consistent way that tells your target audience why they need your solutions. Start with these five simple steps:
Step 1: Identify Your Audience The more you know what your target audience looks like, the more you will be able to speak to them in a way that solves their needs. How do you go about this? Hang out on social media, follow digital conversations in online communities and blog forums, ask current customers questions, and send out surveys with great incentives. If you’re looking to identify your target audience, the key is to listen to what others in your industry are doing and saying. Once you’ve done everything you can to know and understand your potential customers, work hard to build your marketing message around them.
Step 2: Know Your Strength If you’re going to tell your prospects why
The more you know what your target audience looks like, the more you will be able to speak to them in a way that solves their needs. they should use your business over the competitors, they need to know what makes you the best choice. What is your differentiator? People want to know how your services and or offerings will: £ £ £ £
Educate them Make their job easier Further their objectives Represent their business
Identify what your offer in terms of these bullet points and before you know it, you will have a solid message as to how you stand out from the competition.
Step 3: Develop Your Message Your message needs to stand out. Crisp writing, compelling headlines, and copy that gets straight to the point providing clear calls to action will serve you well. Be strong, confident, and consistent in your marketing from blog to Tweet, and remember to always focus on the one question that will be at the forefront of your prospects’ minds, which is, “What can you do for me?” If you can answer this, you have your value proposition, remember to make it shine.
Step 4: Show, Don’t Tell If you’ve been following my past articles, then you probably know how strongly I feel about talking with your audience, not at them. Talking about services is important, but nothing is more compelling than letting someone see what the solutions your services can do for them. Share free, valuable content that will benefit your audience, and give them a taste of what working with you can do for them.
Step 5: Don’t Do All the Talking Your current customers are one of your best assets when it comes to marketing your business. Displaying testimonials is a great way to get your customers to do the talking for you. Give your prospects the chance to communicate with customers you have that have faced similar problems. Examples are, after all, the best way to lead, so use them to show the genuine benefits of your offers. The competition in this industry is tougher than ever. Hone in on your strengths and make sure your prospects know how those strengths can benefit them, making it clear why your mailing business is the best choice. ¾
John Foley, Jr. is the CEO of interlinkONE and Grow Socially. John and his team consult with print and mail companies on sales and marketing techniques, write strategic online marketing plans to get them on a path to marketing success, and John speaks frequently to print, mail, and fulfillment providers about expanding and transforming their businesses to grow revenue. Learn more about John at JohnFoleyJr.com, and his companies at www.interlinkONE.com and www.GrowSocially.com.
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
5 Ways Inkjet and Software Can Optimize Your Mailing Costs With an investment in Inkjet you can see productivity gains and cost reduction in multiple areas; one of the areas that is often overlooked or considered too complex is postal mail. Since there are pre-sort houses and pre-sort software that given many print and mailers use for cost optimization. Other considerations for how to improve the mailing expense of customer communications may be over looked. In fact, I have recently done a whole PowerPoint presentation on the topic. Consider these ways you can combine an investment in inkjet production printing and the optimization of your mail processes: 1. Combine print jobs to increase mail densities 2. Use color to take advantage of current postal discounts 3. Eliminate pre-printed forms with plain paper workflows 4. Make changes to the print stream in order to take advantages of inserter features and functions 5. Leverage the print stream to match your print file with your pre-sort software
Have a new inserter (or two or three)? Are you able to use all the features given the structure of your current customer communications print files? If you aren’t, this is where software solutions like those here at Crawford Technologies integrate into the workflow to modify and unlock your CCM to leverage new and old technology in your workflow—and in turn improve workflow efficiency and reduce cost. I invite you to learn more by contacting me with questions or comments or by viewing our recent webinar on a Day in the Life of an Operations Manager. By: David Day, EDP, Product Marketing Manager
I know what you’re thinking, “If it was that easy everyone would be doing it.” This is where additional software solutions come into play. All of the above ways to improve your mail process can be influenced by the right Customer Communications Management or production print workflow software solutions. Many companies are constrained by the legacy applications that drive the composition or production of their printed and mailed customer communications. The challenge with legacy applications for most organizations is the lack of flexibility for change—meaning it takes time and effort to make changes making the production of the communications less than agile. How can you solve the challenge? Consider using software to combine like job types after they are composed by your legacy applications. Then add value by making changes to the print files in order to add color and reduce or eliminate the need for pre-printed forms. As I mentioned in my five tips, this added use of color can also save you money with the postal service and currently stated discounts through the end of the year.
n the January/February 2014 issue of Mailing Systems Technology, I wrote an article about how the USPS has been taking our permit funds when they become inactive and dormant. Since then, the Office of Inspector General of the USPS conducted a study confirming these findings and made recommendations for changes that were rejected by USPS management. The goal of this article is to make you aware of this issue, explain how these funds get lost and what resources you have to get money refunded (and convince you to push your postal liaisons to make changes to this archaic policy!). The good news is that the Office of Inspector General provided the statistics that I was unable to obtain through multiple Freedom of Information Act requests. According to the study titled Dormant Advance Deposit Permit Accounts, Report Number FT-MA-15-001, “The Postal Service refunded $34.3 million to customers from October 1, 2008 through June 30, 2014. During fiscal years 2012 and 2013, the Postal Service refunded $9.2 million of that amount to customers; $15.6 million of customers’
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
unclaimed dormant account balances was considered income to the Postal Service during that same timeframe.” The significance of this issue is that the USPS is admitting that it considers unclaimed dormant account balances as income. Also, during these two years (Fiscal 2012 and 2013), 63% of these dormant funds were not returned to customers. If we extrapolate these numbers over 10-20 years there could be hundreds of millions in dormant permit funds that the USPS has held onto and made it very difficult for the average entity to claim. The big issue comes with how the United States Postal Service handles these funds. With most organizations (corporate, non-profit and state government), unclaimed funds are turned over to the state’s unclaimed funds office where it is easy to search for your money. These funds will typically remain visible on that state’s website or on www.missingmoney. com until the money is claimed. With the USPS, at 24 months of inactivity, a notification is sent. The entity has 30-60 days to collect their funds (or renew the permit)
or the money gets transferred into general ledger account where the money is considered income to the USPS. To make matters worse, these dormant permit accounts are deleted from POSTALONE! and archived one year from when the funds are transferred. The only way to get this money back is to know what funds you had that were lost, then to go to that specific local postmaster or district for help. There is a procedure that can be followed to get access to the information, but the visibility is lost at the local level. I have included the chart to the right so you can compare the Lost-Funds Process for the USPS vs. most other entities. The big difference is the long term visibility. With the USPS, visibility is lost at 26 months with one single notification to the customer unless a local postal employee goes the extra mile to help clients (which I am sure happens). This is compared to you being able to search for your money on websites that remain active for much longer periods of time. The USPS claims that it cannot publish these lost funds on a website the way other
By Adam Lewenberg entities do because of “USCODE - 2011 Title 39 Postal Service, 412:” ‘Non-disclosure of lists of names and addresses, …except as specifically provided by subsection (b) (Regarding Census data) or other law, no offer or employee of the Postal Service shall make available to the public by any means or for any purpose any mailing or other list of names or addresses (past or present) of postal patrons or other persons.’ I feel that trying to return postal funds to the entities that lost them needs to be an exception to this law. Even if the lists are not published, there needs to be an easy way for an entity to do a search with the USPS for their lost funds.
The Office of Inspector General did recommend the following } Periodic attempts to locate customers’ inactive and dormant accounts } Retaining cancelled account information within the PostalOne! system for more than one year These recommendations were turned down by USPS management stating that the current process is “reasonable, efficient and effective.” They also stated that the recommendations would “unduly burden the Postal Service with non-value-added processes that would add additional costs and inefficiencies.” When the USPS holds client funds, it is acting like a bank and should be held to the same fiduciary responsibilities. That is to make every effort possible to make these funds available and effectively returned to the customer. If it is going to consider dormant funds income after a period of time, this should be presented upfront on every permit application to create awareness to the way the USPS handles accounts.
Here are the main reasons postal accounts go dormant: } Site closed/merged/changed names/core contact left. } Postage account was for a location outside the headquarters where visibility was lacking.
USPS Inactive Permit Accounts
Non USPS Lost Funds
Time that funds can remain dormant
Varies by State. (Typically 2-5 Years)
Where do funds go?
They stay at the USPS.
They then need to be turned over to that state’s Unclaimed Funds Office.
How notifications are sent
At the two-year mark, you are sent a letter stating you have 30 days to fill out a PS Form 3533 to request your funds.
States have a website available of all available funds and do different forms of publicity to find the owners. This includes publishing a list in the newspapers.
Time to make the claim
30-60 days from the date of the letter. The system automatically closes the account at the end of 26 months of no activity.
Most states give 15 years to an unlimited timeframe to collect your funds.
Where can you go to research available funds?
You need to go to your local post office and speak to the Postmaster where the funds are being held. After the 26 month period, they may not have visibility to the funds.
To the state’s unclaimed funds office or to www.missingmoney.com
} Fragmented process inside the organization without one group responsible for managing the postage accounts. } Money sent to prefund the account is looked at as an expense vs. an asset and not tracked. } Multiple accounts set up at different post offices and for multiple classes of service to prefund mailings. The only way we are going to change this process is if we make the problem visible and put pressure on the Post Office. We need the United States Postal Service to create a public listing of these closed accounts or at least the name and address of the original permit owner made visible in a database that can be searched.
Here is how you can help: } Talk to your USPS Account Managers and local Postmasters. } Bring this issue up at your local Postal Customer Council meetings. } If you plan on attending the National Postal Forum, bring it up at the USPS booth. } Sign our petition at https://www.change. org/petitions/usps-create-a-public-listing-of-dormant-permit-accounts
I do not believe that the USPS is trying to be deceptive, but that its process is archaic and needs to be changed. When the USPS takes your prefunded postage, it is acting like a bank and needs to be held to the same fiduciary standards as any other financial institution. This means it needs to take all means necessary to manage your funds and make sure they get returned properly. There are over $50 billion in the various states’ Lost Funds Offices. This money came from the public and private sector because everyone is supposed to return money that is not rightfully theirs. The United States Postal Service should be held to this same standard. ¾
ADAM LEWENBERG, CMDSS, MDC, President of Postal Advocate Inc., runs the largest Mail Audit and Recover firm in the United States. Their mission is to help entities with large numbers of locations reduce mail related expenses, recover lost postage funds, and simplify visibility and oversight. In 2013 and 14, they have helped their clients save an average of 60% and over $12 million on equipment, fees and lost postage. He can be reached at 617.372.6853 or email@example.com. www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
A GOOD TIME FOR CHANGE
With new leadership at the helm of the USPS, are bright times ahead for the mailing industry?
A GOOD TIME FOR CHANGE With new leadership at the helm of the USPS, are bright times ahead for the mailing industry?
hange in leadership can be just what’s needed in hard times. It may invoke a new hopeful attitude, fresh thinking and revived energy. Whether one thinks new leadership will be stronger than what it replaces may not be as important as the fact that it is simply new. We tend to give new regimes new chances to solve difficult problems, uncover new opportunities and even break loose in new directions. Our new USPS PMG Megan Brennan, our new PRC Acting Chairman Robert Taub, and our new leadership in Congress should all be greeted with enthusiasm and encouragement. Retiring Postmaster General Pat Donahoe did a commendable job on his terribly turbulent watch. He took the helm of “The USS Postal Service” when it was already taking on losses resulting from declining First Class Mail revenues, exacerbated by the resulting damage of an unavoidable
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
collision with an iceberg called “The Great Recession.” Yet he has kept his badly damaged ship afloat and on course. Although it is still taking on water (in the way of debt) the good-ship USPS continues to deliver the goods over vast geography, with celerity, regularity and reliability for remarkably low rates. Mr. Donahoe maintained USPS’s buoyancy mostly by jettisoning cost in the way of workforce reduction (212,000 positions through attrition), processing plant consolidation (305 facilities and 82 more to come), optimizing window hours (at 13,000 P.O.s) and eliminating delivery routes (23,000). That amounts to $16 billion in annual savings. Relatively small increases in ecommerce-driven parcel revenue have helped a little too. But all this is still not enough to account for the continuing decline in its primary profit generator, First Class Mail, which amounted to $17 billion per annum over the past 10 years.
So our nation’s new and first female PMG, Megan Brennan, takes charge of a slightly more buoyant vessel. As PMG Donahoe’s Chief Operations Officer, Ms. Brennan directed most of that $16 billion in cost-cutting and as the new Chief Executive she is likely to maintain a “steady as she goes” course, trimming expenses wherever Congress will allow, even though many members object to the additional planned plant closings. She also continues to benefit from the significant reduction in fuel costs, as long as that lasts.
Change in Attitude Hopefully, change in leadership will bring constructive change in attitudes and relationships along with it. In his farewell address to the National Press Club, PMG Donahoe complained about the lack of change during his term in office, which he blamed on “myopia — shortsightedness,” on the parts of Congress, the mailing industry and labor unions. He said, “We never get beyond the narrow set of interests that are determined to preserve the status quo.” His position that the Postal Service cannot adapt and transform to meet the disruptive forces of e-substitution all on
and mutual opportunity. She can initiate an all-inclusive stakeholder discussion about what the future will look like and what needs must be met by which party. Surely industry roles and business models will need to adapt and change to meet changing customer needs.
Customers – Connections – Collaboration
By John Callan its own is fair. The USPS may be the heart of the postal circulatory system, but it is dependent upon the rest of the body as well. And, these critical stakeholder groups must change along with it. Given his desperate need to concentrate on keeping the Postal Service afloat, PMG Donahoe didn’t have much breathing room to think about the distant future. In his remarks he asked, “What is the organization going to look like in 10 or 20 years? How will we serve our customers in the future?” He suggested that “the best approach is to take a broad, long-term view of the organization and develop strategies that best serve our customers and employees of the future.” He acknowledged that the Postal Service cannot meet “its full potential as an engine of growth for the mailing industry and America’s businesses… within its current business model.” As a fresh face and voice of authority, PMG Brennan has the opportunity to immediately seek to enlist the governing, customer and employee interests in conversation about change. She can lift the dialogue beyond the “us vs them” cultural perception that lingers and embrace a spirit of ecosystem partnership, collaboration
Think about it! Every single person in this country is a “customer” of the U.S. Postal Service, and millions living overseas are too. Not even Facebook, Google or Amazon can make this claim. Customers are not only the businesses that pay the postage to mail and ship things, they are the consumers who receive things too. Infants, the elderly, shut-ins and shut-outs are all USPS customers. And, the Postal Service has the herculean task and “obligation” to meet all its customers’ needs, whether it gets paid directly to do so or not. Yet customers’ needs, wants and choices are changing and the Postal Service must understand and accept this and change along with them. New digital technologies are enabling and empowering customers with unprecedented decision making capabilities that must be embraced rather than avoided or ignored. Now customers can easily and quickly change to other means of communication and disconnect from postal services. Yet, the same disruptive digital technologies can be applied by the Postal Service to retain and even enhance its customer connections.
mailing and shipping customers, but they currently stop short of enhancing connections with their receiving customers. New mail-receiver feedback-loop technology has been proposed and should be considered as a value enhancing application to determine customer needs and preferences, even by allowing them to opt out. Customers will soon be taking more and more control of transactions as it is and by enabling them with bi-directional communication, trust and loyalty will be enhanced and the value and frequency of transactions increased. The Postal Service is in the “connection” business. It serves as the messenger, carrier and connector between people — business to business, business to consumer and consumer to business. Its sole purpose is to bind its customers together, to connect them. And it accomplishes this by connecting each link in the value chain with the next — suppliers with service providers with transportation contractors with workshare partners and of course with its own postal employees. The connection process is dynamic, contiguous, perpetual, interdependent and universal. What keeps the lifeblood of the postal value chain circulating is its “collaboration” with the rest of the ecosystem. In the all-American spirit of “E pluribus unum,” out of many participants comes one universal system. This interdependence is what holds it all together and our industry players should deliberately ask, “What can we do to help each other?” The stagnant economy is now finally moving forward, fuel costs are low, ecommerce is booming, we have new leadership and shared customers are plentiful and everywhere. Now is the ideal time to harness the collective power of “Customers, Connections, and Collaboration” and ride the wave of technological change to our shared success. ¾
Yet customers’ needs, wants and choices are changing and the Postal Service must understand and accept this and change along with them. The USPS has made great strides in recent years with the development and deployment of its Intelligent Mail Barcode (IMb) for mail and IMPb for parcels, which are good examples of applying new digital technology to meet its operational needs. These digital information gathering tools greatly enhance the Postal Service’s ability to efficiently identify, validate, sort, route, tally individual items and collect postage payment. They serve as excellent mechanisms for electronic connection with their
JOHN CALLAN is Managing Director of postal consultancy Ursa Major Associates, LLC and Founder of the PostalVision 2020 Initiative. Its fifth annual Conference themed “Customers — Connections — Collaboration” takes place at The Ritz Carlton, Pentagon City, March 10-11. Contact John at firstname.lastname@example.org. www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
CHANGES MAILERS AND SHIPPERS SHOULD PREPARE FOR IN 2015
lthough most of us are not able to influence major changes in our industry, we can prepare for them and take advantage of the opportunities that change presents. For 2015, shippers should take advantage of several opportunities to decrease costs, while being proactive to mitigate rate increases.
USPS Mail No price increase is expected in 2015, yet the question many of us wonder about is: what is going to happen to the “temporary” indigent price increase from last year that raised rates above the allowed change in the CPI? Will rates for mail go down? Don’t hold your breath. 24
JANUARY-FEBRUARY-2015 | www.MailingSystemsTechnology.com
Congressional Postal Reform: Will the incoming Congress be able to address the legislative changes needed to return the Post to stability? The current situation was created in 2006 when Congress passed the Postal Accountability and Enhancement Act (PAEA). In my opinion it was dirty politics to hide the $75B the USPS overpaid into civil servant retirement and not increase the deficit. It was a hidden tax increase, thus avoiding the “3rd rail” for political longevity. In return for not having to continue to overpay into this account, the USPS was forced to prepay 50 years’ worth of health care in 10 years. The Post has done an incredible job while Congress has tied their hands behind their backs. It’s time to take off the handcuffs and let the Post Office thrive.
Expect lively discussion on “Electronic Postmarks”(USPS email with images of what is in your mailbox), 5-day mail delivery (6 or 7 day package delivery), cluster box mandates, reduced delivery standards for overnight mail, plant and office closures/ consolidations, transportation infrastructure upgrades and more. Meter users will continue to enjoy a one cent (2%) discount on metered letter mail at Retail rates. Presorted First Class mailers will continue to mail the second ounce free.
USPS Parcels IMpb becomes mandatory January 26th. Without this “Intelligent Mail Package Barcode” your packages will NOT be eligible for Commercial Base (Base) or Commercial Plus Pricing (CPP). Base discounts for Priority Mail
By Gordon Glazer for weight/zone average 15% off Retail and CPP averages 29% less. Mailers that used to enjoy these discounts by using an “online” Postage Meter now require some sort of PC software bridge to create IMpb compatible labels. Most mailers lost the default to “Base” discounts last year with their automated systems. Savvy mailers would manually select PM “Base” as the USPS deferred enforcement of this mandate. Note: Shippers that use PC Postage products have been compliant for a long time. In addition, users also benefit from address standardization and correction that help eliminate delivery delays and inconvenient returns caused by improper addressing. So, while the meter manufacturers are offering software solutions to their clients, it begs to reason: “Why not simply skip the meter, and simply print the postage on the address label in an easy one-step process?” If you look, you can find online solutions that not only allow you to print fully compliant PC postage shipping labels one at a time, but also do so without any fees. The USPS Click-N-Ship site will do this and allow you to receive “Base” discounts. What about getting rates BELOW “base” without any minimum volume commitments, label fees or extra charges? Yes, it’s out there! It is possible to print all in one labels with postage costs less than “base,” maintain an address book, order free shipping supplies and schedule a free pickup.
sional (“dim”) weight rather than the actual weight. Note: To compute the DIM weight, divide the cube (L x W x D) by your DIM factor. Unless you have negotiated a non-standard DIM factor, the DIM divisor for UPS and FedEx is 166. As an example, a 12” x 12” x 12” package would be 1728/166 = 11 Lbs. This is your DIM weight even if the contents only weigh a pound. Shipware analyzed the 25 most common boxes used in America and estimate that 32% of all packages will be impacted by this change, resulting in a 17% increase to the average shipper. The good news is that USPS is not changing their DIM policies.
a (yawn) .9% decrease for “Base” and 2.3% for “CPP” the affected change was as much as 59% less in selected cells. 3. General Rate Increases (GRIs): As part of their annual rate increases, both UPS and FedEx increased their Ground and Express rates by an average of 4.9%. This is an average across all weights and zones; however, increases vary by weight, zone and service level. For example, Ground packages 1-10 lbs. increased 6.8%. Most air services are going up approximately 7%. In addition, the minimum package charge increased 5.9%, from $6.24 to $6.61, and Accessorial charges which account for as much as 30% of net shipping charges went up across the board. While some of our readers may not be concerned about shipping as it is “done in the warehouse,” aren’t we all looking for ways to increase our professional stock value? Perhaps you should consider positioning yourself as the in-house USPS champion to introduce shipping alternatives to the national private carriers that could decrease costs and improve the delivery transits? While you deal with the changes in 2015, it is possible to lower your mail and small package transportation spend while simultaneously improving its performance. In all change there is opportunity. Your efforts to capitalize on those opportunities are perhaps the one constant that will drive your success in 2015! ¾
For 2015, shippers should take advantage of several opportunities to decrease costs, while being proactive to mitigate rate increases.
The Perfect Storm: These 3 Major Changes Have Shaken up the Small Parcel Transportation Landscape 1. Dim Changes: In a nutshell, both UPS and FedEx have removed the three cubic foot exception before applying dimensional weight pricing for all Ground packages. Effective with the 2015 general rate increases, all packages will now be charged the dimen-
Note: Currently Priority Mail and Parcel Select packages only dimensionalize to outer zones 5-8, with a 1728 exception and at the more favorable 194 DIM factor. Priority Mail and Parcel Select do charge a “Balloon rate” of 20 pounds for packages going to zones 1-5 weighing less than 20 Lbs. when the Length plus Girth exceeds 84” but less than 108”. 2. Priority Mail Price Decrease: The USPS has been historically a great competitive option for commercial shippers in the lighter weights, generally three pounds. and under depending upon your level of discount. In September of last year, the USPS dramatically lowered the price for Priority Mail in the inner zones (1-5) and weights up to 40 Lbs. While the official press release on this increase reported
Gordon Glazer, CMDSM, CMDSS, MDP, MDC is Director of Strategic Partnerships at Shipware LLC, an innovative parcel audit and consulting firm that helps volume parcel shippers reduce shipping costs 10%-30%. Gordon is a postal industry veteran with 27 years of experience and is a sought after speaker and industry thought leader. He welcomes questions and comments, and can be reached at 858.724.0457 or email@example.com. www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
THE RISKS AND REWARDS OF MAILING IN A REGULATED INDUSTRY
Automating compliance so your clients can focus on growing revenue
egulatory pressures on financial institutions have increased dramatically in the years since the 2008 financial crisis. In response, financial institutions have worked diligently to redeploy resources and rewrite processes in order to comply with new federal rules and avoid costly fines. For the 100 largest banks in the United States, the operational cost of regulatory compliance now exceeds $1 billion annually, and more than one-third of smaller community banks are spending one-third of their operating budgets on compliance. Neither of these statistics represents the additional cost of lost 26
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productivity and fewer resources devoted to revenue generating initiatives. Mail service providers (MSPs) who support financial institutions have an important role to play in helping their clients stay compliant. Those who learn to manage this challenge most accurately and most efficiently will have a significant advantage over their competitors. If you serve financial institutions, or are considering expansion into this space, this is a good time to revisit your own processes for compliance and learn from industry best practices. Mail operators should be familiar with the Consumer Finance Protection Bureau (CFPB). The bureau was created under the
Dodd-Frank Wall Street Reform and Consumer Protection Act to increase transparency to the lending process for mortgages, credit cards and other financial products to help consumers better understand the costs and risks of borrowing and the terms and conditions of their existing loans. The idea is that a more informed consumer will ultimately result in a stronger and more resilient American economy. The beginning of the year is a good time for mail operators to review processes and quality checks related to compliance with CFPB regulations. For the foreseeable future, there will be mandated consumer notifications that need to be produced accurately and delivered on time. Your role is to help your clients comply with these regulations by providing: 1. Proof of content: Is the content in every mail piece accurate and compliant?
By Bruce Gresham 2. Proof of production: Was each mail piece accurately compiled, addressed and produced? 3. Proof of induction: Was each mail piece mailed correctly? Was it inducted at the right time, in the right place? Mistakes can result in expensive fines, legal actions and potentially irreparable harm to a company’s reputation. Those are the risks, but there are also opportunities. Those who excel in this space are finding innovative ways to reduce operational costs by automating compliance, and they are leveraging mandated notifications to create more impactful customer contacts and stronger customer relationships. The key is to have an automated work flow and end-to-end integrated tracking and control solution that tracks each mail piece from when the data record was created, through the time it is printed, inserted into an envelope, commingled, and then handed off to the United States Postal Service (USPS) for delivery. Your in-house mailing equipment or commingle provider should have the technology in place to provide you with the corresponding data points for each step the mail piece went through to be inducted into the USPS. Compliance audits often require documentation so that financial institutions can prove their adherence to regulations. Manually producing these types of documents is inefficient and introduces the potential for lost records and inconsistent reporting. Automated reporting from software or a website portal can make this process more efficient and more accurate. Innovations in document design and data collection allow mailers to add full color, personally relevant messaging to their physical communications and create tighter linkage between the mail piece and websites, mobile applications, or other digital channels. Producers of regulated First Class mail should take advantage of these innovations and also consider transforming their print operations into White
Paper Factories — end-to-end production mail solutions that transform plain rolls of white paper and envelopes into high-impact, colorful and personalized customer communications. A White Paper Factory with digital color print and high-speed inserting can help to improve the integrity and quality of your mailings while eliminating the need to store pre-printed forms and envelopes. This type of production environment also allows for cross-selling opportunities to be printed on the mail piece. These targeted messages can provide a substantial return on investment if the message is clear, concise, personalized and current.
processes with file-based, automated mail piece verification, streamlining their workflow and providing the highest degree of integrity. Today, the investment is not only paying off in the new services L & D is able to provide to transactional mail clients, but also in the improved services they are able to provide to existing direct mail clients. In her own words, Jill Pedan, business development manager at L & D, said, “By freeing our operators to cross train and redeploy into other areas of our operation, not only does our new system create a leaner production floor workflow, but it also strengthens our productivity as a whole and we can say with confidence that our clients are getting the benefit of the highest integrity, error-free mailing the marketplace can provide.” Just as I encourage financial institutions and the MSPs who serve them to revisit their processes for compliance and take advantage of some of the opportunities they may be overlooking, I would also encourage MSPs who currently do not process First Class Mail for financial institutions to consider expanding into this space. While there is risk in taking on compliance responsibilities, there are also considerable opportunities to create value for your clients. ¾
The beginning of the year is a good time for mail operators to review processes and quality checks related to compliance with CFPB regulations. To meet the highest standards of integrity, mailers want to reduce the number of hands and machines that touch each individual mail piece, as well as the number of different software platforms that track it. That’s why an automated work flow and a single software platform that tracks the mail piece throughout its life-cycle is essential for mail operations that want to excel in this space.
A Real-Life Example In 2013, just as banks and financial institutions were beginning to understand the new rules and regulations implemented by the CFPB, L & D Mail Masters, a full-service direct marketing firm based in New Albany, Indiana, saw the opportunity to expand its business further into the transactional mail space. They made a capital investment in equipment and educated themselves on the laws that would impact their new clients. They replaced manual integrity
BRUCE GRESHAM is Vice President of Planning and Strategy for Pitney Bowes Presort Services. Pitney Bowes, a global technology company, powers billions of transactions — both physical and digital — through data management and engagement software, shipping and mailing solutions, and location intelligence offerings. With a network of 32 operating centers across the U.S., Pitney Bowes Presort Services processes more than 14 billion pieces of mail per year and is the USPS’s largest workshare partner. Bruce can be reached at 704. 726.6728, firstname.lastname@example.org, or visit Pitney Bowes’ website at www.pb.com. Follow Bruce on Twitter @BPGresham. www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
SIT BACK. TAKE A BREATH. BE STRATEGIC. How to effectively make your print and digital communications synchronic
merely a component to a pre-determined strategy. Now, communicators and operations team members must take a step back and truly become strategists.
How Are Multichannel Campaigns Evolving?
ilos are broken down for a reason. And that reason is because they are rarely effective or revenue-producing. In the world of marketing communications, this holds especially true. Let’s take a look back at recent history. Before the turn of the 21st the century, transactional documents were one silo, and a direct mail or promotional piece was another. In the early 2000s the term transpromo took the print and mail world by storm by inserting promotional content into transactional documents, or what we call “critical communications.” Eventually, an e-component was added via the likes of a QR Code, pURL, etc. Our industry continues to see gradual shifts in how we deliver communications, largely based on observations of consumer behavior. The CMO Council cites that email marketing is the most effective digital marketing channel for consumer 28
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retention. In the contemporary marketing landscape, the mentality is to lead with the web or e-programming and then drive the recipient to the next step, which would complement paper, and then track the response to all of the component — opening emails, clicking links — and then follow up with direct mail, which is very relevant and more impactful, and incorporate a QR code or pURLS. But this shift raises questions: While email might mean more engagement, is it the right engagement for your organization? Is your audience more adept to receiving information in other ways? It is questions like these that are yet again presenting marketers and IT professionals alike with a decision to make regarding the effectiveness of their communications. What’s most interesting about this particular turning tide is the clear tie between strategic thinking and a campaign’s resulting effectiveness. No longer is a mail piece or an email
Marketing scientists and strategists know that in today’s world a campaign is most effective if it’s an integrated, multichannel approach. Mailers and operations managers have become accustomed to this approach as well. Questions both parties must ask themselves now include: } What is the objective of having your print sync with email? } What are the unique demands of the campaign and program? There’s never a one-size-fits-all solution. } For a drip campaign, you want to ensure a continuous conversation. While for a tradeshow event, your call to action will have a more defined period of time and will likely be to drive traffic to the booth or session. } For this campaign, might it be more effective to start with an email and follow up with a direct mail piece (versus
By Kurt Konow the traditional direct mail, followed by an email)? How specific or broad do you want to be? For example, a direct mail piece that has a microsite linked via a pURL can connect a recipient to a website and allow them to delve into the brand’s content. Or sometimes, direct mail will be supported by follow up emails which reiterate the same call to action — for example, clicking through to a webpage or microsite specific to their subject. Additionally, many marketers are increasingly implementing direct mail campaigns as an email program, and following up with direct mail. } What are the psychographics of your campaign? How can you go beyond the traditional demographics? A mailer’s integrated, multichannel communications approach must be created with the intention to be full circle. It must include a variety of touch points and seek to continually reinforce your messages via the communications vehicles that your recipient sees as most useful. Determining this is no small task — but it is one that can be done more precisely by addressing the questions above.
What Makes an Integrated Online and Offline Campaign Effective? Consistent look and feel simply doesn’t cut it anymore. Campaigns that deliver desired results go far beyond similar layouts. A check list that should be evaluated during campaign planning process and creation should include: } What’s the message? Be interesting. Speak to the recipient’s interests and spread the message in a way that makes sense for the communications mechanism. Think about it — do you need the same amount of language on a mail piece as you do an email blast? Perhaps not. However, it remains important to keep the underlying message consistent. } Is it easy? Determine what you are asking your recipients and make it as clear and as simple as possible for them to interpret. Do you want the mail piece recipient to go to a website? If so, work to make it an easy to remember URL. Do you want the email recipient to click on a link? If so, work to place it high and prominently in the email. Be clear with your call to action and keep it simple. } What’s in it for them? Consumers today need incentives. Always go into campaign development knowing that if you’re
not offering something, the competition is. Be thoughtful with your offer. An offer for offer’s sake is rarely effective. } What’s your timing? Whether you are leading with offline or online, determine when the next communication will be launched. Waiting too long can result in the recipient forgetting what the initial communication was about. Going too soon could make them feel pestered. Before launching your campaign, ask yourself this vital question. An effective integrated, multichannel campaign will always evolve, and continue to break down silos. Similar to the evolution of direct mail, email and transpromo, consumer behavior will drive communications. Today, consumers are seeking relevancy; they want to know what it means to them. Make it relevant. Be where they are. And remember, before each campaign — sit back, take a deep breath and be strategic. ¾
KURT KONOW is director of vertical marketing, Ricoh Americas Corporation.
www.MailingSystemsTechnology.com | JANUARY-FEBRUARY-2015
How to Automate PostalOne! Statement Downloads For years the USPS has been encouraging mailers to submit their Mail.dat files to PostalOne! in order to participate in programs such as eDoc, Full-Service Intelligent Mail, eInduction and Seamless Acceptance. We at Window Book think PostalOne! eDoc is terrific for the USPS and the mailing industry, but there are definitely things that can be improved. One thing in particular is retrieving and downloading finalized postage statements to your network. For many mailers and their customers this is a very timeconsuming and tedious process. Window Book began asking questions: How could the information in PostalOne! be reprovisioned to be more useful for mailers and how could we take the extra labor out of that interaction? Our answer is PostalWeb (PostalWeb.Net), a website built for the needs of mailers (Mail Service Providers and mail owners). It provides a much more useful view of your submission information, you can access it on your computer or mobile device, even while you are on the shop floor, and you can receive all of your finalized postage statements via e-mail or automated secure file transfer right to your network. Plus when you elect to have the files transferred, you can organize them by mail owner and other ways on your network. PostalWeb. Net can also give you an XML file with all of the important postage information in it, including data you can’t export from PostalOne! today. You can use the XML to import your postal data right into your job shop or accounting system! In combination with Window Book’s automated PostalOne! interfaces, eDocs Manager Plus or EDM10X, PostalWeb.Net can make your life much easier and drastically reduce your overhead by saving you hour upon hour every week.
Solution: PostalWeb PostalWeb.Net provides a much better user experience by reducing the number of times you have to visit the PostalOne! dashboard, giving you a more useful web-based job dashboard designed to meet mailers needs. It lets you set up automated delivery of your PostalOne! finalized postage statements via e-mail or secure file transfer. In the last 3 months, PostalWeb has delivered thousand of finalized postage statement PDFs and XML files to the mailers just by helping us do Alpha and Beta testing.
Our first Alpha site reports saving over 14 man-hours per week just by not having to go to PostalOne! to retrieve the finalized statements they need. According to their accounting department this adds up to over $700 in savings per week! That’s a savings of $36,000 per year just using the first version of PostalWeb.Net!
PostalWeb.net is initially free (first quarter of 2015) for Window Book’s EDM10X users. EDM10X automatically manages the submission of your Mail.dat files to PostalOne! and sends e-mail and text message notifications of both successful and unsuccessful submission events. EDM10X users don’t have to waste time looking at the PostalOne! dashboard or the USPS MDR Client program to confirm your submission status. EDM10X even has a feature that helps you quickly fix your validation errors and resubmit your files without having to leave PostalOne! to do so.
Think about all the time you have been spending: } } } }
Manually logging in to PostalOne! Manually finding and retrieving postage statements, and Manually transferring all of them back to your computer. Manually sending postage statements to customers.
GROWING MAIL SHIPPING DELIVERY GLOBAL BUSINESS SOLUTIONS RESULTS
TOGETHER Anaheim California Anaheim Convention Center May 17-20, 2015
With Strength now comes Growth! The 2015 National Postal Forum is uniting the power of mailing & shipping to create growth opportunities for all. Join us in Anaheim California and experience the 2015 NPF and Growing Together!
E DUCATION • 130+ Educational Workshops • USPS Leadership Sessions • Networking Events • Innovative Exhibit Hall • And much more! Experience it all! Register today at www.NPF.org.
I N NOVATION