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JANUARY - FEBRUARY 2017 www.MailingSystemsTechnology.com

CHOOSING THE RIGHT

SOFTWARE FOR YOUR MAILING OPERATION.

PAGE 18

UAA MAIL: A GLOBAL

PROBLEM THAT MUST BE ADDRESSED. PAGE 22

WHAT COULD 2017 HOLD FOR THE POSTAL INDUSTRY? PAGE 28

GETTING 2017 OFF TO A RUNNING

START


TABLE OF CONTENTS

JANUARY - FEBRUARY 2017 | VOLUME 30 ISSUE 1

FEATURES

DEPARTMENTS/COLUMNS 05

Editor's Note

Kicking off 2017 By Amanda Armendariz

06

Real Life Management

Grit – The Real Secret to Success By Wes Friesen

08

The Trenches

Big Data for Small Businesses By Mike Porter

09

16 Understanding Optimal Mail Piece Design and How It Affects Your Postage Budget

The three biggest drivers of postage cost are mail class, piece shape, and piece weight. A little attention to these items can yield big savings. By Kurt Ruppel

Connecting Point

Investing Internally: What Makes the Best Kite? By Chris Lien

10

Direct Mail Evolution

2017 Postage Discounts You Can Capitalize On By Joy Gendusa

11

Postal Affairs

Will 2017 Reshape the Future of the Mailing Industry? By Bob Schimek

18 Tips to Selecting the Right Software By Mark Fallon

12

20 Use Mail to Drive a Better Customer Experience in 2017 By Grant Miller

24

The Rematch: Postage Meter vs. PC Postage

By Adam Lewenberg

Software Byte

USPS Promotion Programs for 2017 By Jeff Peoples

14

Mail & Technology Merge

Mail Goes Social By Vincent DeAngelis

30

Say What?

TREND ALERT

22 Undeliverable-As-Addressed Mail: A Global Problem Worth Solving By Greg Brown 4

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28

2017: THE YEAR AHEAD

By Jessica Dauer Lowrance

15

Automation: Transforming

the Mailing Industry BCC Software


EDITOR'S NOTE

VOLUME 30, ISSUE 1 MAGAZINE STAFF Publisher Ken Waddell

KICKING OFF 2017

Editor Amanda Armendariz amanda.c@rbpub.com Editorial Director Allison Lloyd allison.l@rbpub.com Contributing Writers Greg Brown, Jessica Dauer Lowrance, Vincent DeAngelis, Mark M. Fallon, Wes Friesen, Joy Gendusa, Adam Lewenberg, Chris Lien, Grant Miller, Jeff Peoples, Mike Porter, Kurt Ruppel, Bob Schimeck Audience Development Manager Rachel Chapman rachel@rbpub.com Advertising Ken Waddell (o) 608.442.5064 (m) 608.235.2212 ken.w@rbpub.com Design Kelli Cooke RB Publishing Inc. PO Box 259098 Madison WI 53725-9098 Tel: 608.241.8777 Fax: 608.241.8666 Email: rbpub@rbpub.com 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 rachel@rbpub.com Online at www.MailingSystemsTechnology.com. REPRINT SALES ReprintPro 949.702.5390 www.ReprintPros.com All material in this magazine is copyrighted ©2017 by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to Mailing Systems Technology, RB Publishing Inc. or its staff becomes property of RB Publishing Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or Mailing Systems Technology. RB Publishing Inc. and/or Mailing Systems Technology expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine.

WITH AMANDA ARMENDARIZ It’s hard to believe that as I write this, we are already almost one full month into the new year. Where does the time go? And yet, so much has happened already in 2017. With the new leadership now in Washington, many are wondering if postal reform will be a priority for the new legislature. And while no one knows for sure, of course, it doesn’t seem to be at the top of many people’s lists. But that doesn’t mean that nothing will be happening in 2017. The Postal Accountability and Enhancement Act is now 10 years old, which means that there are some questions regarding what will happen with the prefunding requirements (I know many folks would be thrilled if these requirements were eliminated altogether!). The Postal Regulatory Commission (PRC) will also be conducting a review of the rate system, which could change how the PRC regulates postal price setting for the next five to 10 years. As you may have guessed, the theme to the new year (at least so far) seems to be uncertainty. We know that changes could be — or are — coming, but what the results are of these potential changes, no one knows for certain. But that doesn’t mean that you can’t prepare! Start by taking control of what you can. For example, you may not know how the PRC will set rates in the coming years, but you can take steps now to reduce the postage you pay. Whether you do so by optimizing your mail piece design to reduce your costs or enroll in the upcoming USPS promotions (or both!), there are things you can do that will benefit you in the present, even if the future is still uncertain. And this issue is packed with even more ideas like this, helping you get 2017 off to the right start. As always, thanks for reading Mailing Systems Technology.

MAILING SYSTEMS TECHNOLOGY (ISSN 1088-2677) [Volume 30 Issue 1] is published six times per year, (January/February, Annual Industry Buyer’s Guide, March/April, May/June, September/October, November/December) by RB Publishing Inc.,PO Box 259098 Madison WI 53725-9098, 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

MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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REAL LIFE MANAGEMENT View on Website

GRIT – THE REAL SECRET TO SUCCESS

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o you want to be more successful? Then you need to get more grit. Years of research by Dr. Angela Duckworth shows that grit is a better predictor of long-term success than IQ or talent. Paul Wong agrees by saying, “Nothing can replace persistence. Grit always beats talent in achieving your life goals.” Various studies have shown that men with higher grit levels are more likely to stay married; children with higher grit are more successful in the Scripps National Spelling Bee; grit predicts persistence and achievement in the US Military Academy at West Point. Research by the University of Sheffield showed that grit has a significant effect on work performance. People with grit stick to their jobs longer, are more committed to their employers, and work harder. What Is Grit? Sebastian Bailey (the President of Mind Gym Inc.) defines grit as “passion and perseverance for long-term goals. It’s our ability to remain unshaken in pursuit of objectives and our stamina in the face of adversity.” In other words, grit is about holding steadfast to a goal even when there are bumps in the road and progress toward the goal is slow. While talent, luck, and intelligence matter to success, in the long run, it appears that grit matters more. How Do We Develop More Grit? The good news is that we can develop more grit in ourselves. The three keys are: Practice To help develop grit, practice the Hard Thing Rule, which has three parts: Part one: Select at least one hard thing that requires daily and deliberate practice. It could be taking a university class, starting an exercise program, or writing a book.

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JANUARY-FEBRUARY 2017 | MailingSystemsTechnology.com

By Wes Friesen

View on Website

Free Grit Score! How gritty are you? You can get a feel for your grittiness by taking the 10 Question Grit Scale questionnaire found at the website www.AngelaDuckworth.com. Part two: Do not quit, especially on a bad day. You must choose a period of time — for example, a semester or a season — and stay committed during that time. Part three: Only you are allowed to pick your hard thing. Nobody picks it for you because it would make no sense to do a hard thing you are not interested in. Purpose Dr. Duckworth has found that the “grittiest” people tend to have developed their passions from personal interests and also from the broader purpose to contribute to the well-being of others. This altruistic motivation to help others coincides with the Servant Leadership philosophy that many of us aspire to practice. How can we develop more of a purpose? Here are three ideas to consider: 1. Reflect on how what you’re already doing can make a positive contribution to the world. Ask yourself how the world can become a better place — and then draw connections to what you are already doing or could do. Consider the volunteer work you have been involved with. I have served and worked with a number of non-profit organizations, and all of them benefit society in some way.

2. Think about how in small but meaningful ways you can enhance your connection to your core values. One approach is to think about the intrinsic benefits to the work we do. For example, a person who works in the mail center is doing more than earning a paycheck; they are helping people to communicate and be successful in meeting organizational and personal goals. 3. Find inspiration in a purposeful role model. Dr. Bill Damon is a developmental psychologist who has studied purpose for more than 40 years. He suggests we ask ourselves: Can I think of someone whose life inspires me to be a better person? Who? Why? It could be a family member, historical person, or someone else who sets an inspiring example. I have been blessed with several role models in my life, including my father, who modeled the joy of volunteerism to help others. Optimism Grit depends on the expectation that our own efforts can improve our future. Here are two suggestions to help develop an optimistic outlook: Adopt a growth mind-set. A growth mindset leads to optimistic views of


adversity, leading you to seek out new challenges and become stronger. Margaret Thatcher inspires by saying, “You may have to fight a battle more than once to win it.” Practice optimistic self-talk. We can be aware of negative thinking and intentionally make a conscious effort to look for the positives in all events that come our way. How Do We Develop Grit in Others? The best environment to strengthen grit in others is one that promotes confidence and self-belief and actively develops a culture of social support. Recognizing and celebrating grit is important because rewarding a moment of grittiness in one team member can foster it in others. There are two key ways to create a culture of grit on our teams: by working to shift people’s mindsets and by developing others’ ability to handle stress. To change mind sets, Sebastian Bailey suggests the following:

Look at the big picture. Charles Noble counseled, “You must have long-range goals to keep you from being frustrated by short-range failures.” Grit is focused on the long term — remaining committed as well as pushing past challenges. As we know with any long-term goal or project, interest can sometimes wane. Leaders can help to keep people engaged and committed by continually reminding them of the journey and the end benefits.  Encourage others to increase their sense of control. Constantly focusing on things outside our control is frustrating. Instead, help people to focus on what they can control or at least influence. Empower employees to be open to change. Grit is not about following a single course of action no matter what. Being flexible and seeing obstacles as a challenge, not a threat, is the key to creating a culture of grit.

Allow people to work through their emotions. Emotions like confusion and frustration come with being human and are not signs that we should give up. People with grit sometimes feel confused or frustrated, but keep going despite them. Leaders can set a positive example by being transparent with some of our frustrations and keep going despite them. By doing so, we will inspire our team members to do the same. We can use stress to develop ourselves and our team members. This requires that we create an environment where trying but failing is acceptable. I agree with Albert Einstein when he said, “Anyone who has never made a mistake has never tried anything new.” Pursue an environment where trying something but failing is seen as a chance for learning, growth, and opportunity to learn how to overcome challenges.¾

Wes Friesen is a proven leader and developer of high-performing teams. Wes and his teams have earned multiple awards from a variety of organizations over the years. He has extensive experience in leadership and management roles, in both the business and non-profit worlds. He is also an accomplished university instructor and conference speaker. His book, Your Team Can Soar! Powerful Lessons to Help You Lead and Develop High Performing Teams, can be ordered from Xulonpress.com/bookstore or wesfriesen.com

MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

7


THE TRENCHES

View on Website

By Mike Porter

BIG DATA FOR SMALL BUSINESSES

B

ig Data can be a scary proposition for seasoned professionals in the customer communications business. It sounds like something that requires a PhD to figure out. What analysts refer to as Big Data doesn’t have to be complicated to be effective, though. Print/mail service providers can link data from two or three data sources, resulting in messaging that is more finely tuned to individual customer circumstances. If service providers can probe beyond the basic demographics they have been using for decades to create targeted mailing lists, they can make a big difference in how documents perform. Clients can realize a great deal of benefit with help from their service providers to make their communications just a little better. Even small companies can make use of Big Data, but they may need assistance to understand how data can help them and how to apply it. The conversations between print service providers and clients should focus on client objectives, followed by identifying the data necessary to achieve those objectives more often. This is a different conversation than an old-style sales call that focuses on details like paper choice, ink, coatings, mailing lists, and volume price breaks. Two Data Points = Big Relevance Difference Suppose a print/mail client is a family-owned heating and air conditioning service company. They want to get more customers signed up on preventative maintenance programs. The service provider could send identical postcards to every household in a target

neighborhood or ZIP Code — that’s an easy and familiar approach. But the client knows how long new air conditioners typically run before they fail, and easily acquired data provides the age of homes in the target area. Using this extra bit of data, the client could approach homeowners with a preventative maintenance offer timed to arrive a month before their unit is statistically prone to breakdown. Personalized marketing material could provide information about each homeowner’s risk, compare emergency repair costs to pre-emptive maintenance, and educate homeowners about warning signs their air conditioner may need servicing. When service providers guide the client, they help create a more attentive audience, allowing the service company to sell more maintenance programs. This technique uses Big Data tactics — predictive analytics, but on an appropriately simple level. Almost any print/mail service provider can create variable data mailpieces. Document composition software and digital printers make it easy to put the data to work. Applying variables to a mailing transforms an uninspiring “Spring Special AC Tune-Up” postcard (like the one every HVAC contractor has been using for years) into a dynamic, personalized marketing piece. This example does not require the client to have a state of the art CRM system. It isn’t necessary for clients to monitor social media or track website activity. Many small businesses will never achieve a 360-degree customer view or adopt sophisticated strategies often associated with Big Data. That’s not a reason to ignore the value Big Data techniques can provide to these enterprises.

Helping Clients Find Big Data Data that helps all organizations communicate more effectively with their customers and prospects exists somewhere. If print and mail service providers can’t help their clients find and use that data, they lock themselves into producing the generic materials they’ve always provided. Inability to add value to printed documents makes service providers prime targets for competitors. The result is a forced choice between cutting profit margins or watching clients walk away. Big Data may already pass through the print/mail operation. Transactional documents can include data about customer purchases, payment methods, purchase frequency, communication channel preferences, average order size, discounts taken, and more. Print service providers can use document re-engineering tools to extract data from print files as they process the documents. Customer-level data can personalize further communications and aggregate data mined from the documents can predict customer behavior. Clients probably won’t ask print service providers for features that will make their communications more effective. Smaller companies and organizations may believe data-driven communication is too expensive or will be unaware of current document composition capabilities. Service providers can redirect the sales approach away from the printed pieces and towards a focus on business benefits. This allows them to educate their clients. Service providers can show clients how simple application of Big Data can make their customer communications an integral part of their overall business success strategies.¾

Mike Porter writes extensively on topics of interest to companies and individuals working in the customer communications business. Visit www.printmailconsultants.com to learn more about his writing and consulting services or follow him on Twitter @PMCmike.

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JANUARY-FEBRUARY 2017 | MailingSystemsTechnology.com


CONNECTING POINT View on Website

By Chris Lien

INVESTING INTERNALLY: WHAT MAKES THE BEST KITE?

I

n our annual holiday greeting video, I spoke to our customers and partners about how 2016 was a year of investments. Naturally, when people hear the word “investment,” they think large capital, and big dollar signs appear. As we begin a new year, we challenge readers to not think of investment as exclusively relating to big piles of cash. Rather, look around at what your business already owns. You have already made investments in hardware and software — now is the time to get the most out of that investment. Think about this scenario. It’s a windy day, perfect for flying a kite. You head to the craft store and buy a couple of fresh kite parts, hoping they will fit some older materials you have back home. When you return to assemble the kite, you realize none of the pieces work together. You head back out to the craft store. Because you so heavily spent on the previous trip, you cut corners and buy cheap parts. It takes a long time to assemble the mismatched pieces, but finally you have the kite ready, and you head to a field. It flies okay, but upon discussing with your friends, you realize how inefficient the day was spent and how much great weather you missed. Could you have made a great kite with just a new piece of fabric? Where was the previous kite deficient? Without knowing the answers to these questions, you can’t know if your investment was worthwhile or wasteful. Leveraging existing investments begins by analyzing your workflow. Here are steps you can consider while reviewing your equipment and processes: 1. Investing time and thought into simply figuring out what you have is an

important first step. From this step, you can create a document that outlines the life and health of hardware and software products, manage renewal dates, and look at any outstanding contracts and/or agreements (for example, are there any remaining, unused professional service hours for a product or service you purchased?). This document can serve as a foundation that will give a 365-degree view of your mailing operation. It will also help prioritize the next steps. This exercise may uncover lapsed renewals or dated machinery that, if addressed early in the year, can pay back dividends throughout the rest of 2017. 2. Look for automation-friendly steps along the process. Connecting technology saves companies time and money. Big or small, operations that invest in automation see big returns on their investment. Automation capabilities may already exist on the hardware and software solutions you use in your daily operation. To make use of automation functionality, it may require an investment in a consultant or professional service to fully integrate the product into other parts of the mailing workflow. It’s important when researching solutions for your business to shop for products that are automation friendly — that way, even if your business isn’t to a point currently to become fully automated, the capabilities will be there in the future when it is. 3. Upgrade or extend the capabilities of existing tools. Thinking back to the kite story, if you had first examined what you had, you may see some pieces were rough, fading, or aging. Or you might

Big or small, operations that invest in automation see big returns on their investment. find one piece that’s not compatible with the others. If you’ve exhaustedly done the first two steps, you can make an investment in new kite pieces that are sound. This same scenario can be applied to business investments. When the time comes to make the investment, you can be comforted knowing a.) what exactly your business needs, and b.) make an upgrade or buying decision that will enhance the entire workflow. 4. It’s important to keep in touch with the support or sales staff of the big investments you’ve made for the business. When it is time for these upgrades, you’ll understand what your options are, and your vendor won’t be learning from scratch about your business. I can’t stress enough the importance we see in 2017 in investing in critical connecting points. By making a smaller scale investment in smoothing over or streamlining those manual points in your mail preparation process, the business as a whole could possibly operate better than if you made a major investment into a component that can’t be utilized to the best of its ability. ¾

Chris Lien is the president of BCC Software and has been active in the mailing industry for over 20 years. During that time, he authored several software solutions utilizing Mail.dat for electronic auditing, distribution and logistics planning, palletization, and electronic postage payment. He has been heavily involved in industry associations such as the Association for Postal Commerce, EPICOMM, Alliance of Nonprofit Mailers, and Idealliance.

MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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DIRECT MAIL EVOLUTION View on Website

By Joy Gendusa

2017 POSTAGE DISCOUNTS YOU CAN CAPITALIZE ON

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’ve been in the direct mail industry for nearly 20 years. And I can count on one hand — okay, one finger — how many times postage rates have gone down in the last two decades. They usually just go up! And that’s why many small businesses are reluctant to use direct mail. I’m sure you’ve noticed this! The USPS raises postage rates because it needs to offset rising costs and stagnating revenues of its own. But what if the USPS could increase mail usage in a big way? Then they could afford to lower postage rates or offer discounts! Well, the USPS knows an opportunity when it sees one… And the BIG one it sees in 2017 is marketing integration! Specifically, programs that make it easy for small businesses to combine direct mail and online marketing. Now, yes, “online marketing” can be a very broad term. But there is a specific kind that is amazing… You know when you’re shopping online but you don’t buy? And then you see ads for that item you were looking at everywhere you go on the internet? That’s called retargeting (or remarketing or Google follow-up ads), and it’s really effective! So is direct mail marketing — the Postal Service knows this (like we all do)! Research shows that 60% of direct mail recipients have been influenced to visit a promoted website. Now check this out:  Google follow-up ads can improve response by up to 400%  Visitors who are retargeted are 70% more likely to convert And marketers who use this technology combined with direct mail get exponentially better results!

Here’s how it works: Say ABC Dance School sends out 5,000 postcards. The recipients who take an interest go online to check them out. (I find that MOST interested prospects will do this regardless of industry to see what kind of reviews are out there, who the people are behind the business, what their prices are like, etc.) But 96% of web visitors are not ready to become customers, so they leave ABC Dance School’s website and go about their business. Some time later, when those prospects are ready to seriously shop around to find an afterschool dance program, maybe a handful of them will remember ABC Dance School. But many won’t — and those folks will call whatever dance program they find next. Probably online when they search for “dance lessons.” But if ABC Dance School used an integrated marketing campaign that includes Google follow-up ads (a.k.a. retargeting), the prospects who visited their website will be “cookied” with a piece of coding that tells Google to show them ABC Dance School’s online ads. And those people will continue to see their follow-up ads all over the internet — literally millions of sites within the Google network — so that ABC is top of mind when they need an afterschool dance program! Pretty great, right? But why does USPS care? Because it means the same thing for them as it does for printers and mail houses! When small businesses get better results from their direct mail, they keep mailing! Which means more reorders, more postage, and more revenue for them!

In fact, one large commercial printer found that their customers who purchase integrated campaigns reorder 70% more often than the ones who don’t! So to encourage businesses to start using direct mail for their marketing — and to encourage those already using it to use it even more — the USPS is offering postage discounts for marketers who add online elements to their campaigns. There are two separate programs: Emerging and Advanced Technology This promotion rewards mailers who incorporate technology into their direct mail pieces to create an interactive experience for customers. It applies to Standard and First-Class mail and there are no quantity restrictions. Before anyone can mail at the discounted rate, they need to register their business and have their mail piece approved at USPS.com (this applies to both programs). Registration: Jan. 1, 2017 – Aug. 31 2017 Promotion: March 1, 2017 – Aug. 31, 2017 Discount: 2% off postage Direct Mail Starter This promotion encourages nonprofits and businesses to start using direct mail marketing. The discount applies to integrated direct mail campaigns up to 10,000 pieces. Registration: March 15, 2017 – July 31, 2017 Promotion: May 1, 2017 – July 31, 2017 Discount: 5% off postage The upshot? If you’re not yet offering integrated direct mail campaigns to your clients, it’s time to start — so your customers can take advantage of these postage discounts while generating even BETTER results with their marketing! ¾

Joy Gendusa is the Founder and CEO of DirectMail2.0, a fully integrated marketing solution for the clients of printers/mailers that combines the proven success of direct mail with in-demand features like online advertising and automated campaign tracking. Visit www.directmail2point0.com or call 800.956.4129 today!

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JANUARY-FEBRUARY 2017 | MailingSystemsTechnology.com


POSTAL AFFAIRS

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By Bob Schimek

WILL 2017 RESHAPE THE FUTURE OF THE MAILING INDUSTRY?

A

nyone who was hoping for any form of postal activity during the lame duck session of Congress will be disappointed to find only lumps of coal as Congress recessed for the year without acting on any of the Postal reform bills that were introduced and without acting on any of the USPS Board of Governor (BOG) nominees. One can hope the new Congress will re-introduce postal legislation and hold hearings on BOG and Postal Regulatory Commission (PRC) nominees. Unfortunately, with a new Congress coming in, it will take some time before they’re organized and working. Furthermore, it’s unlikely the new Congress and a new president will put postal agenda items on the top of their list of issues to tackle first. This means that the mailing industry will need to quickly redirect its focus to the PRC’s mandated analysis of the Postal Accountability and Enhancement Act (PAEA). On December 20, 2016, it was 10 years since Congress passed the PAEA. The PAEA completely changed the rate-making process for the Postal Service, PRC, and the mailing industry. Included in the PAEA is a requirement for the PRC to determine if the PAEA is achieving its statutory objectives. If it isn’t, the PRC is tasked to “make such modification or adopt such alternate system” to achieve the objectives. The big question is, will the lack of postal reform legislation (to fix the USPS balance sheet) factor in the PRC decision? Most in the mailing industry would agree that the Consumer Price Index (CPI) cap on postal rates has been a good thing over the past 10 years. The cap has kept postage affordable, predictable (exigent surcharge aside),

and forced the Postal Service to be very aggressive in controlling costs. The Postal Service, on the other hand, has made it clear that it does not like being constrained by the CPI cap and will be doing everything possible to convince the PRC to remove the cap. In the December 2016 PRC Section 701 report, the Postal Service noted it was looking for Congress to pass postal reform legislation and for the PRC to use the 10-year rate review to effect “the replacement of the current price cap system with a more suitable regulatory structure.” The Postal Service letter (Appendix B of the Section 701 report) also states “the exigent surcharge should be restored as a policy matter” and “the Postal Service is disappointed that the Commission declined the opportunity to urge the President and Congress to restore the recently expired exigent surcharge.” The 10-year rate review provides the opportunity for all parties to offer feedback and input into the PRC decision-making process. This is going to be a critically important review for everyone in the mailing industry. Even the PRC has stated it has been preparing for the past year to conduct this mandated review of PAEA. The Postal Service and postal unions will be actively involved in the process. What are the key issues that the mailing industry needs to bring forward? How does the mailing industry define a successful rate review? There will be a number of topics that the industry will need to provide feedback on. Below are a few I believe are critical, with comments to spark some thoughts: Does the cap-based rate system need to be maintained?

Yes… maybe the CPI is not the right index to use, but there needs to be some sort of cap established to control USPS spending and postage prices. Workshare discounts: What are acceptable pass-throughs for industry? Should there be a requirement for the Postal Service to pass through 100% of the workshare savings to the mailing industry? What would that mean for products that are not covering their costs? Service standards: Are they acceptable? Load leveling, network rationalization, USPS 24-hour processing clock, and the loss of pretty much all overnight service… and the USPS still struggles to hit target service performance goals. Now is the time for the mailing industry to step up and ensure the mailing industry’s perspective is represented. Several mailing industry associations will be actively involved in the process. This is our opportunity to reshape the future of the mailing industry. Feel free to contact me if you would like recommendations by sending me an email at bschimek@satorisoftware.com. ¾

The big question is, will the lack of postal reform legislation factor in the PRC decision?

Bob Schimek, Senior Director of Postal Affairs for Satori Software, serves as primary liaison with the USPS on technical matters affecting the mailing industry. His 27 years of industry knowledge and leadership provide product management and strategic direction for Satori Software’s mailing solutions. Schimek currently serves as Chairman of the Board for PostCom, Chair of Idealliance’s Mail.dat Work Group, and as an Idealliance representative for MTAC.

MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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SOFTWARE BYTE

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By Jeff Peoples

USPS PROMOTION PROGRAMS FOR 2017

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he United States Postal Service (USPS) is offering six promotional programs in 2017, aimed at increasing mail volumes by offering incentives to mailers. Starting with the first Mobile Barcode incentive back in 2011, the USPS continues to put incentive programs in place for mailers to take advantage of postage discounts or rebates for submitting mailings that meet the promotion requirements. There are six promotions offered for the calendar year 2017. Read on to see which is best for your mail operation. The Earned Value Promotion: This program will run from January 1 through June 30, 2017. This promotion is available for FirstClass Mail only and builds on the success of previous years’ promotions. The promotion is in the form of a credit on qualifying BRM/CRM reply pieces, which can then be applied to postage for future mailings. The Tactile, Sensory and Interactive Mailpiece Engagement Promotion: This program will run from February 1 through July 31, 2017. Leveraging the physical aspects of mail, as well as the advances in print technology, marketers and mailers can enhance how customers interact and engage with mail. Eligible mailers who incorporate a multi-sensory experience in their mail piece may receive a postage discount. This promotion is available only for Standard Mail letters and flats. The Emerging and Advanced Technology Promotion: The program will run from March 1 through August 31, 2017. As with the program in 2016, this promotion is available for both First-Class Mail (letters, cards, and flats) and Standard Mail (letters and flats). New for this year is the inclusion of Virtual Reality and Digital to Direct Mail to elicit a higher response from consumers by using immersive experiences and dynamically printed, personalized messaging.

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The Direct Mail Starter Promotion: This is a new promotion for 2017, offered to first-time mailers to promote events and offers that incorporate the use of print-mobile technology on up to 10,000 mail pieces during the length of the promotion. This promotion will run from May 1 through July 31, 2017. Any print-mobile technologies, such as QR codes, barcode tracking technology, enhanced augmented reality (AR), Near Field Communications (NFC), or other print-mobile technologies currently approved in other promotions can be used to qualify for this promotion. The Personalized Color Transpromo Promotion: This promotion will run from July 1 through December 31, 2017. This promotion is only available for First-Class Mail commercial letters that are part of an IMb Full-Service mailing. This promotion incorporates marketing messages that

use color, dynamic variable print, and personalization. The Mobile Shopping Promotion: This promotion will run from August 1 through December 31, 2017. As in prior years, this promotion encourages mailers to integrate mobile technology into their direct mail during the 2017 holiday season. This promotion is available only for Standard Mail letters and flats. Eligibility As described above, these promotions are available for either First-Class Mail or Standard Mail, or, as in the case of the Emerging and Advanced Technology Promotion, both classes of mail. Each promotion has its own set of eligibility requirements, including mail piece content requirements, registration requirements, mailing submission requirements,


and requirements at mail acceptance and after the mailing is complete. More details regarding the eligibility requirements for each of the promotions is available on the RIBBS website at https://ribbs.usps.gov/ index.cfm?page=mailingpromotions. The Incentives The Earned Value Promotion incentive is in the form of volume-based credits: $0.05 per BRM, CRM, and Alternate Postage pieces counted based on the enrolled MIDs. These credits may then be applied to future mailings of First-Class Mail presort and automation cards, letters, and flats, as well as Standard Mail letters and flats. The Direct Mail Starter Promotion has an incentive of a five percent discount on eligible postage, taken at the time of mailing. The other promotions each have an incentive of a two percent postage discount, taken at the time of mailing. ž

Jeff Peoples is President, Founder, and CEO of Window Book, Inc. With 20+ years of innovative solutions that make using the Postal Service easier and more profitable for mailers and shippers, he has done presentations at industry events, GraphExpo, MAILCOM, the National Postal Forum, Postal Customer Council meetings, Harvard Business Expert Forum, and other industry and direct marketing events.

MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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MAIL & TECHNOLOGY MERGE View on Website

By Vincent DeAngelis

MAIL GOES SOCIAL

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aving two children who fall into the millennial generation, I have been forced to understand the phenomenon known as social media. Why do I label it a phenomenon, you may ask? Well, to me, texting, Twittering, Facebooking, Instagraming, and Snapchatting to someone IN THE SAME ROOM as you are in is the antithesis of being social. But it is the reality of this technologically crazed time we live in. This new normal, however, does not just affect the way we communicate with friends and loved ones. The young woman who posts the social media pages for my company sends me my tweets as seen on Twitter. They sound pretty darn good, and then I ask myself, “Who is actually seeing them?” YOU DON’T NEEDTO BE NOSTRADAMUS Advertisers must also be flummoxed about how to market their goods and services in this environment. Is social media the same as social networking? Do blogs count? How do you avoid falling into the spam folder? How do you avoid getting lost in all the messaging or, just as bad, how do you avoid oversaturation to the point of being annoying? Privacy anyone? And if you are savvy enough to figure that out, how do you make it work in a time where traditional buying behavior is changing rapidly? What’s important to the baby boomer generation just doesn’t resonate with the more recent generations. Author and economist Jeremy Rifkin was quoted in a recent Goldman Sachs Global Investment Research report, say-

ing, “Twenty-five years from now, car sharing will be the norm and car ownership an anomaly.” How will this change the advertising industry’s equivalent of Maslow’s Hierarchy of Needs? You don’t need to be Nostradamus to know that the future of social media will need to change. CAN MAIL WORK IN THIS NEW PARADIGM? Think about this: according to Brandwatch, in July of 2015, there were 2.3 billion active social media users. The average Internet user had 5.54 social media accounts. When you factor in the other activities you do during the day, like breathing and eating, how much time does one really have to process that much information? I’ve been in the mail business for 30 years, and I find myself asking if mail can work in this new paradigm. And each time, the conclusion I come to is: yes, it can. Surely all those instances when mail has worked effectively in a multi-channel marketing effort can be replicated with social media. Marketing mail is keeping pace. In 2016, we saw many instances of emerging technologies in mail using social media. These include:  Video in print Virtual reality, where first-person perspective is used through sight, touch, and sound  Enhanced augmented reality, where video animation and 2D and 3D interactive graphics are used to bring you to a website  NearField communication that takes you to a video via an app

Perhaps the next tweet we send should use the hashtag: #mailworks. THE ANSWER IS PERSONALIZATION If we have learned anything from past “new” technologies, it is that social media will need to become more personalized and need to cut through the clutter that is modern, speed-of-light, interactive communication. One way to achieve this could be through the use of the Postal Service’s Share Mail product. Share Mail provides a way for a business to send or distribute an offer or promotional information to its customers and can then be forwarded to other individuals through the mail. Simply put, businesses send mail pieces to customers with an attached Share Mail postcard. If the recipients feel they know someone who would be interested in the offer, they just detach the card, address it, and put it in the mail without affixing postage. The sender only gets charged if the promotional piece is deposited into the mail stream. Perhaps the next tweet we send should use the hashtag: #mailworks. ¾

Vincent DeAngelis is Vice President, Postal Relations, and Shipping Product Management, Neopost USA. Neopost USA provides hardware and software to mailers and shippers of all sizes. Neopost-brand solutions enable businesses to send and receive physical mail, digital documents, and traceable packages. More importantly, Neopost solutions help our customers connect with their customers by establishing individualized, one-to-one business relationships. Visit www.neopostusa.com for more information.

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TREND ALERT

Automation: Transforming the Mailing Industry According to a recent McKinsey report, “automation can enable businesses to improve performance by reducing errors and improving quality and speed, and in some cases achieving outcomes that go beyond human capabilities.” They estimate that “half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies. As processes are transformed by the automation of individual activities, people will perform activities

that complement the work that machines do, and vice versa.” The mail entry process is no different. Automation capabilities exist today that can reduce operational costs, save manhours, optimize machine clicks, and help deliver superior direct mail products. In this mock timeline, you’ll see how much faster a piece can enter the mail stream with an automated solution and the automatable parts of the mail entry process.

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See more automation success stories! Visit bccsoftware.com/ automatedstories to read more. Citation: McKinsey Global Institute, January 2017


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UNDERSTANDING OPTIMAL MAIL PIECE DESIGN AND HOW IT AFFECTS YOUR POSTAGE BUDGET The three biggest drivers of postage cost are mail class, piece shape, and piece weight. A little attention to these items can yield big savings.

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hen we talk about mail piece design with clients, it’s usually in the context of driving response. Successful direct marketers balance the cost of various aspects of mail piece design with the changes that design elements can drive in response rates. However, one factor in that cost calculation can be overlooked: The impact of design decisions on postage spend. 16

JANUARY-FEBRUARY 2017 | MailingSystemsTechnology.com

COST DRIVERS The three biggest drivers of postage cost are mail class, piece shape, and piece weight. Mail Class: Admittedly, mail class isn’t really a design issue, but as you will see, class can have an impact on things that are design issues. And mail class is definitely something to think about regarding postage cost. First-Class Mail (FCM) is the premier service for the Postal Service and comes with faster delivery and lots of

built-in services (like forwarding and return to sender). But those services come with a cost. If all you need is to get your marketing piece in the recipient’s hands in a specific date window and you aren’t using the extra services, Standard Mail (now also known as Marketing Mail) may be a more cost-efficient way to have your mail piece delivered. Piece Shape: What you or I may simply refer to as the size of a mail piece,


By Kurt Ruppel

the Postal Service refers to as “shape.” The most efficient shape for the USPS to process is letters; mail pieces that are between 3.5” x 5” and 6.125” x 11.5” and no more than 0.25” thick. Once a piece exceeds one of the maximum dimensions, it becomes a flat, which can drive up postage cost at least 30% for Standard/Marketing Mail and at least 20% for FCM. If your current control package is a flat, consider testing slightly smaller designs, which can save significant postage while driving similar response rates to your larger control package. My colleagues have found that “stretch” packages (about 6” x 11”) are large enough to garner extra attention in the mailbox while still qualifying for lower letter postage rates. One design-related difference to keep in mind related to letters and flats is the address on a letter-shaped piece must be parallel to the longer dimension of the mail piece, while the address on a flat-shaped piece can be parallel to either the longer or shorter dimension. Piece Weight: The weight of a mail piece has traditionally been an important driver of postage cost, especially for FCM. However, with the new postage rates that took effect January 22, that is much less the case. In recent years, commercial FCM, which used to be charged strictly by the ounce, has had a feature called “Second Ounce Free,” which meant mail pieces weighing less than two ounces could be mailed at the one-ounce rate. That program proved popular enough that the Postal Service has opted to make FCM pricing even simpler. Since January 22, all commercial FCM Letters up to 3.5 ounces are charged the oneounce price! (Caution: you must be using presort or automation rates to avail yourself of this feature. FCM single-piece rates are still structured around ounce break points.) Standard/Marketing Mail has also seen simplification in weight-based pricing. The piece rate now applies to all enveloped letters up to a weight of 3.5 ounces and flats up to four ounces. Above these weights, a piece/pound calculation takes over and adds cost. An added benefit is that the break point for both FCM and Standard letters is now 3.5

ounces before additional postage costs take effect — only one number to remember! AUTOMATION DISCOUNTS No matter which class, shape, or weight mail piece you use, one of the most important ways to control postage cost is to ensure the mail piece meets all the requirements to claim automation discounts. Enveloped letters, in addition to meeting the size constraints noted above, must also be designed within a few other parameters. Piece weight can be no heavier than 3.5 ounces Pieces must have an aspect ratio (length divided by height) of 1.3 to 2.5. This means all those perfectly square designs that may get your creative team excited are going to cost more to mail.  The Intelligent Mail barcode (IMb) must fall at least 0.625” but no more than four inches from the bottom of the mail piece. It can also be no closer than 0.5” to either left or right edge of the mail piece. The piece must be flexible enough to be handled by automated sorting equipment. The official definition is “bend easily when subjected to a transport belt tension of 40 pounds around an 11-inch-diameter drum.” Not a measurement that slides gracefully off the tongue. The way I think of it is promotional plastic and paper cards work; anything heavier or stiffer (seed packets, pens, and other rigid and odd-shaped items) are generally prohibited. Automation requirements for flats aren’t as strict because the sorting machines are designed to handle bigger, bulkier pieces (think catalogs and magazines). Piece size can be no larger than 12” x 15” and no thicker than 0.75”. Additional design features to note: Piece weight can be no heavier than 13 ounces (FCM) or 16 ounces (Standard/ Marketing Mail).  There is no aspect ratio requirement. IMb placement can be anywhere so long as it is at least 0.125” from any edge. Flexibility requirements are less stringent than for letters, so some of those stiff inserts that don’t work in automation letters will work in automation flats.

But do be careful, flats need to pass the “droop test.” Large, very lightweight mail pieces can be too flimsy for sorting machines to handle. A full explanation of how mail piece deflection is measured is available in DMM 201.4.6. FOLDED SELF-MAILERS Our discussion so far, at least relative to letters, has focused on enveloped mail pieces. If you are looking at folded self-mailer designs, the rules are a bit different. The USPS definition of a folded self-mailer is “two or more panels that are created when one or more unbound sheets of paper are folded together and sealed to make a letter-size mail piece.” For these types of mail pieces, maximum piece size is 6” x 10.5” and maximum weight is three ounces — both measurements slightly less than the maximums for enveloped mail pieces. Folded self-mailers also require specific: Minimums for paper weight based on piece design; Tabbing or gluing patterns for piece closure based on piece weight and design; Size requirements for flaps (if used); and Number and orientation of folded panels. For more details on folded self-mailers, consult the Folded Self-Mailer Reference on the USPS RIBBS website (https://ribbs. usps.gov/fsm/documents/tech_guides/ FSMReference.pdf). The right design decisions not only drive strong direct mail response rates, they can also ensure you aren’t paying unnecessarily high postage rates. Be sure to think about the postage impact the next time you’re trying to determine the best creative design for your direct mail campaign. ¾

KURT RUPPEL is Director Postal Policy and Marketing Communications at IWCO Direct. He is a member of the Mailers’ Technical Advisory Committee (MTAC) and serves on the Board of Directors at the Envelope Manufacturers Association (EMA), where he is also Vice Chair of the EMA’s Postal Affairs Committee. He can be reached at kurt.ruppel@iwco.com. MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017 17


By Mark Fallon

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TIPS TO SELECTING THE RIGHT SOFTWARE

Even if a new software solution is much-needed by your organization, it’s still important to take the time to evaluate all options thoroughly. Otherwise, you may regret it.

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ack in the 1990s, I developed a presentation entitled, “Information Technology for Mail Center Managers.” The section on purchasing software was pretty basic. Were your applications on a mainframe, a server, or desktop? If a server, what version of Microsoft? If desktop, were you Microsoft or Apple? In the main categories — document composition, address management, and package tracking — there were just a few vendors to consider. While it may feel that 1997 was just a few years ago, it was two decades ago. In the ever-changing world of information technology (IT), it was a lifetime ago. Selecting the right software for your operation today involves consideration of more factors and more vendors. To be successful with software, you need to ask yourself certain questions: Does the software truly address my needs? 18

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Is the software scalable to my organization? What training comes with the software? Can I adjust my process to effectively use the software? Will the software help produce savings that make up for its cost? Is the software compatible with existing systems? Am I knowledgeable enough to choose the right software for my organization? The last question is probably the most important one. Education and training are important before you buy anything. Seek out experts — internal and external who are willing to share their knowledge and experience. Step One – Internal Education Before starting down any path with technology, make sure you’re heading in the same direction as your company’s IT department. What is the company’s overall document

strategy? How does the company intend to manage the hard copy and electronic documents it sends to customers? Is there an ongoing effort to migrate to a single customer communication management or document management software? You also need an understanding of the system architecture. For example, IT may only support certain platforms or operating systems. If there’s a migration to cloudbased services or software-as-a-service (SaaS) models, that could either restrict or expand your choices. There may be enterprise agreements with certain providers that offer special pricing or include the right of first refusal on any purchase. If your company’s IT department is outsourced, new purchases may require a review to determine if support will be provided and at what cost. Get to know the people in your IT department. Ask for a meeting with a senior manager to gain insight on their direction.


terms you use, the results returned may only include some of the vendors that offer a certain type of software. One way to expand your results is to use a known vendor’s name in the search terms. Most search engines have an autofill feature that is helpful. For example, if XYZ Software is one of the vendors in the results, use the phrase “XYZ Software compared to.” The search engine will then list the most common competitors that people compare to XYZ Software. For software that is certified by the US Postal Service, check out the Postal Pro website’s “Certification” page (https://postalpro. usps.com/certifications). The USPS certifies vendors for: Coding Accuracy Support System (CASS) Manifest Analysis Certification (MAC) & MAC Gold Manifest Analysis Certification Batch (MAC Batch) Multiline Accuracy Support System (MASS) Periodicals Accuracy Grading and Evaluation (PAGE) Program Presort Accuracy, Validation, and Evaluation (PAVE) Zone Analysis Program (ZAP)

Discuss what you’re considering and see if it fits in with the company plan. While you’re in the planning and development stage, ask for an IT person to be assigned to your project. They can help provide any questionnaires or security profiles vendors need to complete before presenting a bid. And when it comes time for installation and rollout, your new IT friends will be there to assist. Step Two – What’s Out There? Before beginning any consulting engagement, we ask for a list of all software and hardware used in the operation. While we dedicate time to reading articles, browsing the web, and receiving briefings from vendors, we occasionally run into a product we haven’t seen before. No one can know everything. In 2017, in makes sense to begin your search on the internet. Search engines are a good place to start, but only that — a good place to start. Depending on the

Most trade publications — including Mailing Systems Technology — have online directories of vendors. For example, go to MailingSystemsTechnology.com and click on “Guide” in the top navigation bar. You can then scan through vendors by the different categories of products. An underused research option is LinkedIn and the industry groups available — like the “Mailing Systems Technology” or “NPF National Postal Forum” groups. Members can start conversations by describing what they’re trying to accomplish and asking for suggestions. Participants, including savvy vendors, will offer recommendations. Of course, also reach out within your professional network. Email and call successful managers that you respect. If possible, visit their operations and see the software in action. Talk to users about what they like — and don’t like — about the application. Step Three – Making a Choice Whether you use the Request for Proposals (RFP) process or request bids for solutions, don’t make the decision alone. Have a team of people review the proposals and provide their opinions. Your friends from the IT department can give insight on security and compatibility issues. End users, including department employees, can offer feedback on usability.

Financial analysis is a must. In the past, we bought software licenses and paid annual maintenance fees. In the world of SaaS, new financing models have emerged. Subscriptions and pay-as-you-use pricing are becoming more common. Vendors may offer several different options for the same software. You may need assistance in determining the most cost-effective solution. If possible, take a test drive. Compare the different solutions on how well they work in your environment. If the software requires interfacing with other applications, validate compatibility. Identify any potential issues and workarounds. You should also test end results using the same input data. While all CASS software is certified by the USPS to deliver standardized addresses and ZIP Codes, different vendors may return different results for your address list. Measure response time. This is a must, whether you’re considering locally installed, cloud-based, or SaaS software. If you’re interfacing with a customer service system, every second of delay lengthens the phone call and frustrates the customer. The same is true for an application program interface (API) being used with an online portal. Final Step – Properly Plan and Execute Installation You’ll need to modify your current procedures to maximize the benefit of the new software. Look at the whole process from beginning to end for opportunities for improvement. Consider how to maximize the software by transforming the operation — not just automate the process. Be sure to properly plan the deployment of new software. Allow ample time for thorough testing before moving it to production. Create a contingency plan to “back out” (or uninstall) the software if there’s a critical problem in the production environment. Don’t rush, and be prepared. Become educated on new technology — through both internal and external resources. Select your software with the assistance of financial, IT, and business experts. Then you’ll be ready to plan and implement the right solution for your organization. ¾

MARK M. FALLON is President & CEO, The Berkshire Company. You can read his blogs by visiting www.berkshire-company.com/the-berkshire-company-blog or www.markfallon.com/ blog. Mark can be reached via email at mmf@ berkshire-company.com. MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017 19


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BY GRANT MILLER

USE MAIL TO DRIVE A BETTER CUSTOMER EXPERIENCE IN 2017 If improving the customer experience is one of the goals of your print and mail operation this year, here are our four top tips.

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n my opinion, customer experience is the number one area where print and mail operations need to focus in 2017. If you help your clients deliver an improved customer experience, you will almost certainly be rewarded. If you fail to do so, you will most certainly be penalized. For mail service providers, this means holding yourselves accountable to a different standard and demonstrating value to your clients and business partners in different ways. In the past, most operations were measured solely on how cost-effectively they could process transactional mail. Today, they are also evaluated on how impactful and engaging their communications are and how much value they can add to the business in other ways. For those who are still being graded on the efficiency standard alone, you should demand, or

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better yet, demonstrate that you should be measured on a broader set of criteria. Efficiency is essential, but we have much more to offer. Here are four ways you can drive a better customer experience in 2017: 1. Use More Personalization and Targeting Personalizing your communications starts with knowing your customer. That means collecting and leveraging meaningful and accurate data. Ensuring you have the right lists, audience, and information is critical. Good data can make your communication more engaging and help you avoid waste (e.g., sending an offer for a home equity line of credit to a renter). Making bills and statements personalized, colorful, and interactive not only reduces customer confusion, but it cap-

tures your customer’s attention and creates a vehicle for targeted marketing messages and additional engagement. Printing a personalized message on the statement and envelope drives higher open rates and can be a powerful and cost-effective marketing tool. 2. Take Advantage of High-Speed, High-Quality, Affordable Color Inkjet For a majority of businesses, the capability to produce 100% variable data color print is no longer a luxury, but instead an expectation. Monochrome, spot color, or color cut-sheet toner systems simply cannot produce the same results as digital color print. Your customers will see and react to the difference. Over a five-year period, digital production print shipments and services are projected to grow by nearly 11%. Much of this


will be in the transactional mail space, as declines moderate and consumers across all demographics continue to value paper bills and statements as a convenient and useful payment reminder and reliable record for their personal archives. 3. Leverage Productivity Solutions Streamlining your workflow with integrated print and inserting solutions and leveraging software that promotes productivity are great ways to create an environment for future growth. As the software that runs mail equipment continues to improve, we are able to obtain more timely and detailed information to improve productivity and predictability. So, how does this relate to the customer experience? Quite simply, efficiency allows you more time to focus on the things that matter — meeting SLAs and driving revenue. The customer experience is improved by reliable delivery times and accurate personalization, including relevant and timely offers. 4. Choose an Omni-channel Approach As physical and digital communications continue to converge, your bills, statements, and direct mailings must be part of an omni-channel customer engagement solution. By continuing to anchor mobile, web, and video-based communications with an effective mail piece, we create more meaningful customer engagement. Leading companies are creating a tailored,

seamless conversation with customers across channels and devices. By investing in the latest capabilities, including interactive personalized video, companies are driving richer interactions, deeper personalization, and greater access to information and options. Combining video technology with real-time data, for example, enables those companies to deliver billing statements in unique ways, providing a sound and motion experience to complement the mail piece. Omni-channel communication also establishes a holistic brand and customer experience — a synchronized, connected journey across channels, including mobile apps, call centers, transactional communications, videos, and websites. Together, these pieces create a seamless, targeted, and relevant conversation that is tailored to each stage of the customer journey. 5. Give as Much Care to Your Inbound Mail as Your Outbound Mail For mail service providers and in-plant operations with responsibility for both inbound and outbound mail, you need to love both of your children equally. An important step toward this balance is implementing a single round-trip tracking solution. The latest tracking software allows this, giving you extra control, more actionable data and complete peace of mind. Intelligence on inbound mail performance can be invaluable not only for measuring incoming payables, but also getting

an early reading on customer behavior and planning appropriate follow-up actions. New software solutions provide a full variety of automated daily reports on billing performance that can be used as a suppression file against lists compiled for second notices, service cancellations, or outbound telemarketing. No more unnecessary notification mailings, premature service cancellations, or angry customers — because you’ll know when the check is really in the mail. An exceptional customer experience is comprised of multiple interactions, so it is essential to think of the big picture. Collaborating with your marketing teams to deliver consistent, personalized customer communications across all channels; expanding your use of color inkjet printing to make your communications more impactful; and improving your tracking and management of inbound mail are all ways to provide a more consistent and meaningful customer experience. By keeping your clients’ needs at the forefront of your business strategies, you will be successful in 2017 and beyond. ¾ GRANT MILLER is Chief Operating Officer, Document Messaging Technologies for Pitney Bowes, where he leads product management and strategy for the company’s enterprise-level production print and mail business. Grant holds a Bachelor’s of Science in Mechanical Engineering from Purdue University and an MBA from Butler University. Follow him @ GrantMillerUS. For more information, please visit www.pitneybowes.com

product spotlights

Disruptive Mailing Portal Breakthrough Drag-&-drop mails one or thousands. At will, self-serve. Fully automated, immediate feedback. No templates, windows, cover sheets, equipment or paper needed. Hard copy mail designed your way. FC, Std, NP – singles, batches, promotional – mixed media, envelope art. Addresses certified, Imb outer and reply. Elegantly simple. “Stunningly comprehensive. -P.F.” Postalocity 316.262.3333 www.Postalocity.com

Just Imagine Imagine having one complete source to design, process and deliver customer documents in the most graphically appealing, data secure and cost efficient way possible. • Document Design • Postage Manifesting • Address Standardization • Remittance Processing • eDelivery • Disaster Recovery • Data/Print Center Management Software Suite • Outsourcing for statement and bill printing AutoMail, LLC 800.898.2540 www.goautomail.com

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UNDELIVERABLE-AS-ADDRESSED MAIL: A GLOBAL PROBLEM WORTH SOLVING

Incorrect address data affects all mailers, and the problem can be especially daunting when it’s international mail. Here’s how to fix it.

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ndeliverable-as-Addressed (UAA) mail is at the heart of many long-term operational issues, such as rising print and postage costs, difficult cash flow management, poor customer service, and missed sales opportunities. And UAA mail itself is based on bad data. This can range from incomplete names and addresses to information that is just plain wrong, such as typos, incorrect ZIP Codes, duplicate records, mismatched data, or a database that includes customers who have moved, retired, married, divorced, or passed away. Here is where smart data quality can make a difference. Implementing customer data verification processes at point of capture and batch cleansing to maintain address accuracy will reduce returned mail, streamline operations, and improve targeted marketing efforts. These same processes meet address quality challenges when expanding internationally. 22

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Get Good Data at the Point of Entry Eliminating bad data at the source is critical. By integrating real-time address auto-completion and verification solutions, mailers ensure that only valid address information is entered into the system; solutions suggest a verified address as the user types and then complete the entry automatically. This helps boost conversions and increase orders by simplifying and accelerating the checkout process for customers. Mailers can also implement address verification to clean postal addresses already in their systems or mailing lists, and they should consider a solution that is certified by the postal organization they use. Postal certification serves as a standard for address data quality measurement and allows customers to benefit from postage discounts. There are many postal certifications worldwide, including CASS by USPS, SERP by Canada Post, AMAS by Australia Post, SNA by La Poste in France, and others. Utilizing

a certified address verification solution will help fix incomplete or inaccurate addresses by adding the correct (or missing) components such as postal codes, secondary (suite) information, directional, residential, or business identifier. This standardization of address data not only ensures that mailers earn postal discounts, but is also key to identifying and eliminating duplicate records — especially those that are hard to spot due to address obscurities, formatting inconsistencies, nicknames, and abbreviations. By merge/purging duplicate records, mailers can reduce waste and get a more accurate, single view of their customers.

Slashing UAA Mail with Move Update Up to 25% of an average company’s contact data records are inaccurate in some way. One of the leading culprits is data decay — data deteriorates as businesses and people move, change jobs, marry, retire, and die. In the US alone, 44 million


By Greg Brown

every one percent improvement provided by NCOALink processing. Change-of-address services are also available in international markets such as Canada, Austria, Belgium, the Czech Republic, France, Germany, Ireland, Poland, Switzerland, the Netherlands, and the United Kingdom.

Going Beyond Move Update What about the roughly 40% of movers that do not file a change-of-address with the USPS? Mailers should incorporate multisource change-of-address processing (MCOA), accessing a privately owned database of approximately 121 million change-of-address records from sources such as magazine publishers, banks and credit card companies, mail-order forms, and various other sources. Blending NCOALink and MCOA results in a cost-effective direct mailing, ensuring the bases are covered and your campaign reaches its target audience.

Now Go Global

families, individuals, and businesses move each year. To reduce costs associated with wasted postage and production, changeof-address processing is essential. While the USPS recommends four primary change-of-address processes to reduce UAA mail and meet the Move-Update requirements for all Presorted First Class, Standard Class, and Parcel Select Lightweight mailing postage discounts, its NCOALink is the only one that updates your list with current addresses prior to mailing. NCOALink processing matches your list against a dataset of approximately 160 million permanent change-of-address records filed with the USPS over the last 48 months. To save on postage, printing, and time, as well as meet certain requirements for postal discounts, mailers must Move Update their mailing lists within 95 days of mailing. USPS case studies estimate that a database owner of one million records realizes a savings of $600 for

While the tools we’ve been talking about also apply to your global database, there are some important distinctions. Language and character sets differ dramatically, creating impact on how your address information is standardized (and then validated, cleaned, updated, deduplicated, and more). In addition to native languages that are non-Latin, almost every country has its own address format, sometimes up to six address lines depending on the country. Because of this, the more international your records, the more likely you will have problems verifying addresses for mailing and shipping. A transliteration engine is imperative, helping international mailers translate foreign languages so that international postal address records can be validated and deduped. Transliteration will transform non-Latin writing systems including Greek, Japanese, Chinese, Cyrillic, and Korean into Latin characters so that addresses can be validated, standardized, deduped, and enhanced. There simply are no more roadblocks to international data quality with convenient tools that eliminate undeliverable mail, as well as clean CRM data,

ensure e-commerce shipments are delivered, and reduce fraud.

Meeting the UAA Challenge A decade ago, the USPS issued a challenge to reduce UAA by 50% over 10 years. The move was inspired by more than 10 billion pieces of mail considered undeliverable because of an incomplete, illegible, or incorrect address, as well as a total cost of $2 billion annually to the Postal Service, forced to either treat the undeliverable mail as waste or handle it with forwards or returns. The good news is that these numbers have dropped: In fiscal year 2014, UAA mail was 6.6 billion pieces and cost the Postal Service $1.5 billion. The bad news is that this does not include the cost to mailers themselves, estimated to waste nearly $20 billion annually in UAA cost related to printing, shipping, and loss of long-term business and customer relationships. Unchecked, these costs are likely to become even more significant as business becomes more and more global – with mailers serving customers worldwide and managing address data sourced from company websites, blogs, call centers, and more.

Up to 25% of an average company’s contact data records are inaccurate in some way. Working with clean, optimized data is the key to solving the UAA challenge. Mailers not only reduce costs and meet postal regulations but also ensure long-term business value with timely deliveries and high customer satisfaction worldwide. ¾ GREG BROWN is a vice president at Melissa Data, provider of global data quality solutions that integrate into a spectrum of direct mail, ecommerce, master data management and Big Data platforms. www.MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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A GOOD TIME FOR CHANGE

With new leadership at the helm of the USPS, are bright times ahead for the mailing industry?

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THE REMATCH: POSTAGE METER VS. PC POSTAGE By Adam Lewenberg

It’s time to once again compare these two options — and help you decide what is best for your mail center.

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ack in the July/August 2012 issue of Mailing Systems Technology, I had written an article comparing the differences between mailing systems (postage meters) and PC Postage. Despite almost five years passing, I felt it was a good time to revisit this topic for the following reasons: 1. Many of the postage meters in the US are connected with analog phone lines, and the equipment vendors are making a strong push to get these switched to network connections. This is driven by the telecommunication companies threatening to discontinue analog service. 2. Package volumes are increasing, and there are discounts available based on how the piece is electronically submitted to the USPS. 3. There have been technology changes that impact how mail gets processed. 24

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Back in 2012, I focused on the functional differences of the two solutions. In this article, I plan to discuss the entire customer experience of working within these two types of postage solutions so you can see which one is a better fit for your organization.

ISSUES WITH ANALOG CONNECTIONS Let’s start with the hard truth: It is going to be harder to get analog phone lines in the future. The mailing vendors are also not including analog modems with new equipment orders. Today, many organizations are spending $300-$600 per year on analog lines for their postage meter without other uses, and these charges can now be eliminated. The biggest challenge we encounter when switching mailing systems from analog to network-enabled is firewall issues. The systems are basically designed to

work when you plug them into the network jack, but many companies have security standards that require IT to get involved. This can delay the installation and require multiple departments to be engaged. The key point to remember regarding the analog to digital connection issue is that since this transition is going to have to occur, it is a great time to explore your options for your future equipment needs.

SIMPLICITY Mailing systems are very easy to use. Walk over to the meter, place the item on the scale (or use the default postage amount), and run your mail. PC Postage requires that you log into a website or use a downloaded software program and either print postage onto label sheets or directly onto the envelope. Winner – Mailing System

PRODUCTIVITY The only way to compare solutions is to break the mail into categories. Letters and Flats – Mailing systems are designed for higher production than PC Postage. They can run at 18-310 letters per minute (based on the type of system) and have optional sealers, integrated weighing scales, and automatic


feeding modules. PC Postage can run as fast as you can either peel labels or feed envelopes into your printer. This software tool does have one significant advantage: an address list can be imported, and the destination address and postage can be printed in one pass. Winner: Mailing System Packages and Priority Mail – Postage meters can print a meter tape but still require addressing and manual applying of a tracking barcode. PC Postage prints one 4X6 shipping label with all information included. Address files can be imported for automatic label printing. Winner: PC Postage

FLEXIBILITY Mailing systems are very flexible, with the ability to handle any mail volume, size, or class. The options range from a small unit the size of a desktop printer to up to 10 feet long based on volume capacities. PC Postage is flexible for different reasons. You can process mail or packages anywhere you have an internet connection. This is great for organizations with small offices or an agile workforce. They can also handle any volume of USPS packages, and some systems will let you compare and rate shipments with UPS and FedEx. Winner: Tie

REPORTING Most mailing systems have basic accounting functionality that lets you track pieces and postage for a limited number of departments or cost centers. You can expand this at higher costs to web-based options that let you see the transaction detail. In this area, we feel PC Postage has a distinct advantage. Even with the lowest subscription levels, the transactions are stored for 90 days to up to two years (based on vendor), and the accounts can be expanded to 1,000 or more. You can not only drill down to the cost center, but what a user generated for a given time period. Finally, you can control the access of your users to what levels of postage they can print, how much funds can be added, and what visibility they are allowed. This comes in especially helpful when you are running a large fleet of users. Winner: PC Postage

POSTAGE DISCOUNTING Here is a listing of the discounts available for the different solutions: First-Class Mail – Metered – $.03 letter discount – This has been drastically

Want an easy way to compare the two choices? Visit MailingSystemsTechnology.com/Rematch for the full article, including a side-by-side, easy-to-read chart showing the highlights of both options.

increased from $.005 in 2016 and is available for both mailing systems and PC Postage. Electronic Return Receipt (for Certified Mail) – $1.30 savings over Retail Return Receipt – This can be added as an additional option for many mid- to large-sized mailing systems and is included at no cost for some PC Postage solutions. Commercial vs. Retail Rates – 16% average Savings Priority Mail, 11% Priority Mail Express – As of January 2015, the USPS required that to qualify for Commercial rates, you had to submit the address file and tracking information electronically. Postage meters can no longer get this discount unless they are accompanied by an additional PC Postage tool to do this submission. If you are a high-volume mailer, you may also qualify for an additional six percent average Commercial Plus savings that only can also only be offered through PC Postage. First Class Parcels – (Packages less than 16 ounces) – Seven percent average savings by converting from Retail to Commercial. Additional 30-62% savings for 13-15.99 ounce pieces that qualify for Commercial rates but would be forced to go Priority Mail if retail rates were being used through a postage meter. These discounts are only offered through PC Postage. If you are a high-volume mailer and either use automation software with barcodes or a presort service for your letters and flats, you will want to continue using a mailing system to maintain those discounts. Winner: PC Postage

Ease of Doing Business Our goal was to look at the main ways that you may interface with a postage solution provider to be able to see what is going to provide the best customer experience. Contracting – We find that PC Postage shines in this area mainly because

there are fewer options. There is a monthly subscription fee along with some peripherals (scales and label printers) that will either come with the solution or can be purchased at a nominal amount. These agreements can be month to month or on an annual basis. This is compared to mailing systems, which are more complex and for longer periods. There are two core ways to order a mailing system: Leases – Typically three to five years in duration and locks you into a specific payment. There is very little flexibility if changes are needed, and fees and settlements will occur if early termination is required. Many vendors may also have evergreen clauses that automatically renew the term if they are not notified prior to the end of the agreement. Meter rentals – This is typically for lowend mailing systems only. Larger units can be purchased along with a meter rental and maintenance agreement. Annual increases and usage based rates may apply. These are typically on one- to three- year terms. Winner: PC Postage Installation and Training – As we discussed above, mailing systems will need to be installed on your network to do meter refills, download rates, and update the software. Low-end units are self-installable, and the onsite support is available for larger equipment. PC Postage is either accessed via the web or installed directly onto the PC. Even if web access is preferred, there may be a small applet required to control the printing functions. PC Postage is typically user-installed and easy to set up. Many of the vendors will run weekly webinars to help users get started. Both mailing systems and PC Postage providers will have decent websites and online videos to get users up and running quickly. Winner: Tie MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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Ongoing Support – Both the mailing systems and PC Postage providers give decent support. This includes detailed websites and 800 call center assistance. Both groups will offer service by replacement on low-volume equipment. The mailing systems providers will send onsite support to higher volume equipment. All providers will have dedicated account managers for larger level portfolios that can manage your day-to-day issues as they arise. Winner: Tie Billing – Overall, we find that PC Postage offers a superior billing experience to mailing systems, and this is mainly due to the streamlined and simplified nature of the offering. With mailing systems, you may have paper and electronic billing. Some items can be paid with credit cards while others require a check or ACH. PC Postage can be invoiced for rental, postage, or supplies on a credit card, ACH, or check. Both mailing systems and PC Postage solutions can bring multiple locations onto consolidated invoices, but from our experience this seems easier to set up with PC Postage. Winner: PC Postage

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INVESTMENT

FINAL VERDICT

We will attempt to look at all the main costs for both solutions. Typical Monthly Costs – It is not a fair comparison because mailing systems have feeders and sealers that can drastically increase costs and are designed for higher volumes of letter mail. If you have lower letter volumes, you should consider the numbers below. Winner: PC Postage Mailing systems — $20-1,000 per month — This assumes that units are rented or leased. Upfront costs will be required if they were purchased along with ongoing support agreements. PC Postage — $15-40 per month — Many systems include scales and label printers that can be purchased separately. Fees – PC Postage shines in this area because mailing systems can have many incremental charges, including maintenance agreements, parts and labor, rate changes, meter reset fees, postage advance fees, postage overage fees, equipment insurance (lease), finance charges, late fees, and property taxes (lease). Winner: PC Postage

There is no way that you can pick a winner because it all depends on your mail volumes and applications. As a rule of thumb, low-volume letter mailers who do any volume of packages may want to consider PC Postage. If most of what you send is letters and flats and you need feeding and sealing functions, mailing systems may be your best choice. Also, many medium- to high-volume letter mailers may add a PC Postage function along with their mailing systems to be able to get the discounts and package simplicity. The important aspect is to understand the differences between these options to select what is right for you. ¾

ADAM LEWENBERG, CMDSS, MDC, President of Postal Advocate Inc., runs the largest Mail Audit and Recovery firm in the United States and Canada. Since 2013, they have helped their clients save an average of 60% and over $26 million on equipment, fees, and lost postage. He can be reached at 617.372.6853 or adam.lewenberg@ postaladvocate.com.


By Jessica Dauer Lowrance

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2017: THE YEAR AHEAD

There was an air of uncertainty as we kicked off the new year, but here’s our best guess as to what 2017 holds for the postal industry.

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t the end of 2015, I wrote an article that was an attempt to help the postal industry plan for what would be in store for 2016. One year later, I am attempting the same feat as I look into a very cloudy postal crystal ball. Many of the same challenges we faced last year still exist today. If you were to ask any member of the postal community what was on his or her wish list for 2017, I believe it would be the same three things that were on the 2016 wish list. The first would be postal reform, which, to date, has not happened since 2006, even though a tentative deal was made between some of the major stakeholders in the industry. The second would be consistent, predictable delivery of postal products. Most of the industry would tell you that predictability trumps speed every time. It does not matter how fast 28

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or slow something was delivered, but was it on time? The third and final wish would be predictable, stable price changes. This last wish is the hardest to grant in 2017 with the Postal Regulatory Commission’s (PRC) 10year review of the system of regulating rates and classes for market dominant products. So what does 2017 hold in store for the postal industry? Even in face of the all the uncertainties, three things are evident: 1. A new president has been elected. There will be new leadership and committee members within key Senate and House committees. Education efforts for these new members will need to take place in order for any postal reforms to occur. 2. The PRC will have to determine whether or not the current system of regulating rates and classes for Market Dominant products is sufficient or if changes are needed on how the Postal Service sets it prices.

3. Individuals and businesses will continue to use postal services for business communication and commerce. Postal products will continue to be delivered to the best of the Postal Service’s ability. Although the challenges we face in the first part of 2017 are no different than 2016, the postal industry must not lose focus. With so many changes happening so quickly, it will be way too easy to get caught up with one issue and let others slip by. Resource constraints plague every company, and most of the time, it is hard to see past the immediate issues. I often have joked with PostCom members that for the past year, I’ve felt like a firefighter that was constantly working to put out the many postal fires around me. Every issue demanded immediate attention and focus, so any strategic thinking or planning was put on hold while I dealt with each fire. Throughout all of last year, I learned that joining forces with other postal stakeholders gave greater credence to my cause. The more groups that felt the same way, the greater the voice and breadth the issue took. More got done in educating the Postal Service, Congress, and the PRC in 2016 than any other year.


and quite expensive for those using outside postal counsel. But this endeavor must be front and center for most of 2017. And from past experiences, the more the users of the system can agree on what a rate system should look like, the more power it will lend itself in advocating for its position. The voice of the industry cannot be divided in its pursuit to maintain predictable, stable prices. But the review of the rate system is not the only major challenge in 2017. The need for reforming the prefunding payments continues to plague the entire postal industry, as well as new concerns around the Office of Personnel Management’s calculation of the Postal Service’s obligations into the Federal Employment Retirement System (FERS) and the Civil Service Retirement System (CSRS). There is also the ambiguity of what happens with the prefunding requirements now that the Postal Accountability and Enhancement Act (PAEA) is 10 years old. What will be required on an annual basis? How will this affect its current financial situation? Will USPS be required to make the payment?

Why, you may ask? Well, for one, PostCom rarely took on an issue by itself. Whether it was comments to a Federal Register or the PRC, PostCom joined forces with others. Whether it was congressional testimony or legislation discussions, PostCom reached out to others to get their opinions and reasons on why supporting various aspects was beneficial to the industry. Now you might be asking yourself why I am sharing these lessons learned. Well, in 2017, the postal industry is facing some of its toughest challenges. The review of the rate system could sharply change how the PRC regulates postal price setting for the next five to 10 years. A worst-case scenario would see the inflation-based cap be sun-setted and a brand new rate system would be put in its place. Other scenarios might include defining a different cap calculation or giving the Postal Service broader pricing flexibility, or even the off chance that nothing changes. Regardless of the outcome, the process to get there will prove to be extremely tedious and quite stressful. Focus and collaboration will be needed throughout the nine- to 12-month process, as well as participation in creating the docket before the PRC. This will be resource-intensive

in all postal facing systems, customer facing systems, and all marketing/sales materials. It will be quite a cost to the industry for such an unneeded name change. Changes will be coming for Move Update. The Postal Service will be publishing a Federal Register Notice proposed rule with a comment period open to interested parties before a final rule is published. And let’s not forget the Annual Compliance Determination. The PRC still has the ACD from 2014 and 2015 open with USPS responding to PRC questions. What does this mean for 2016? Although the determination is mandated to happen within 90 days of the report filing, the Commission has proven it can keep the docket open as long as it likes. Have you written all of this down yet? The “to-do” list for 2017 is quite long. You can add to this list what your company requires of you, your daily tasks and projects, as well as anything new that the Postal Service tries to pursue. Add to that your company meetings as well as MTAC, PRC filing deadlines, and technical conferences, as well as the association meetings/calls/webinars required of you. Oh yeah, and do not forget your customers meetings, plant tours, and calls! But I have hope! Well, at least a little. I want you to hang up your firefighter suit and instead put on your running shoes. For 2017 will not be the year of putting out fires, but the year of the postal legislative and regulatory marathon. Although it will feel like we are sprinting from one task to another on our to-do list, the enormity of changes in 2017 is actually more like a marathon. The industry will need the discipline and focus of a long-distance runner. Unity is needed now more than ever because it is easier to run in a pack than alone. My one wish for 2017 is that the postal industry joins together to finally voice its concerns around the key elements that affect our businesses day in and day out. ¾

Although the challenges we face in the first part of 2017 are no different than 2016, the postal industry must not lose focus. Another challenge will involve the rollout of eInduction and Seamless Acceptance. Additional elements will be added to the Mailer Scorecard with more penalties and thresholds to accompany them. Informed Visibility has been delayed into 2017, and the industry is anxious to understand all the ins and outs of how it will affect them and what additional requirements will be placed upon them to help another USPS initiative. The national rollout of Informed Delivery is slated for early 2017. There are still questions around how it will affect open rates. Some mailers would like an opt-out ability, but the Postal Service has not allowed that option through the testing phase. Another sensitive subject is the name change of Standard Mail to USPS Marketing Mail. The anxiety within the industry is quite high around the rollout of this name change, the potential effects on open rates, as well as the cost of implementing this name change

JESSICA DAUER LOWRANCE is Director, Postal Policy and Sustainability, UPS Global Public Affairs. Prior to UPS, she served PostCom in a variety of capacities, including President-Elect. She can be reached at jlowrance@ups.com. MailingSystemsTechnology.com | JANUARY-FEBRUARY 2017

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SAY WHAT?

Think About It

2017 will not be the year of putting out fires, but the year of the postal legislative and regulatory marathon. Although it will feel like we are sprinting from one task to another on our to-do list, the enormity of changes in 2017 is actually more like a marathon. The industry will need the discipline and focus of a longdistance runner. Unity is needed now more than ever, because it is easier to run in a pack than alone.

— KURT RUPP

— JESSICA DAUER LOWRANCE

Up to 25% of an average company’s contact data records are inaccurate in some way. One of the leading culprits is data decay – data deteriorates as businesses and people move, change jobs, marry, retire, and die. — GREG BROWN 30

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The right design decisions not only drive strong direct mail response rates, they can also ensure you aren’t paying unnecessarily high postage rates. Be sure to think about the postage impact the next time you’re trying to determine the best creative design for your direct mail campaign.

For mail service providers and in-plant operations with responsibility for both inbound and outbound mail, you need to love both of your children equally. An important step toward this balance is implementing a single round-trip tracking solution. The latest tracking software allows this, giving you extra control, more actionable data, and complete peace of mind.

I’ve been in the mail business for 30 years, and I find myself asking if mail can work in this new paradigm. And each time, the conclusion I come to is: yes, it can. Surely all those instances when mail has worked effectively in a multichannel marketing effort can be replicated with social media.

— GRANT MILLER

— VINCENT DEANGELIS

As a rule of thumb, low-volume letter mailers who do any volume of packages may want to consider PC Postage. If most of what you send is letters and flats and you need feeding and sealing functions, mailing systems may be your best choice. — ADAM LEWENBERG


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Mailing Systems Technology Jan/Feb 2017