WHAT TO SEE AT THE NATIONAL POSTAL FORUM PAGE 30 MAY - JUNE 2018
AN INDUSTRY BUILT ON WORKSHARE:
A LOOK BACK WHERE IS YOUR RETURNED MAIL HIDDEN? THE ANSWER MAY SURPRISE YOU. PAGE 16
NEW TO THE INDUSTRY?
A QUICK OVERVIEW OF MAILING AND SHIPPING WITH THE POSTAL SERVICE. PAGE 18
WHAT IS TRANSPORTATION MESSAGING, AND
HOW WILL IT HELP THE USPS CONTINUE TO IMPROVE ITS SERVICE?
The innovation and partnership that are hallmarks of USPS programs like workshare must continually be at the forefront of our minds if our industry is to remain relevant. Page 20
TABLE OF CONTENTS
MAY - JUNE 2018 | VOLUME 31 ISSUE 3
DEPARTMENTS 05 Editor's Note
The USPS: a Classic Example of Innovation By Amanda Armendariz
06 Connecting Point
Green and Secure: Does It Meet the New Move Update Requirements? By Anita Pursley
08 Inkjet Info
Advancing Direct Mail Opportunities with High-Speed Inkjet
By Lisa Cross
10 Software Byte
Understanding the Logistics of Courtesy Pallets
By Jeff Peoples
12 Direct Mail Evolution
Quantify Your Direct Mail Response Rates Using Mail Tracking
FEATURES 16 Where Is Your Returned Mail Hidden?
Every business that sends out mail pieces grapples with the issue of returned mail. Luckily, there are effective ways to reduce its occurrence. By Gary A. Seitz
18 A Quick Overview of Mailing and Shipping With the USPS The mailing and shipping industry can be daunting for those who are new to it. Here are some ways to hit the ground running. By Gordon Glazer
20 An Industry Built on Workshare: a Look Back
The USPS must continue to capitalize on the innovation and partnership that are hallmarks
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of its workshare program as it navigates the increasingly digital waters. By Kathleen J. Siviter
24 Battling Compliance – A Winning Strategy
Even if you outsource your mail, you still need to ensure that your vendor is meeting the standards of security and compliance. By Mark M. Fallon
28 A Look at the Transformation of Direct Mail to Transactional Communications
These two methods may seem the same on the surface, but there are key differences of which you need to be aware. By Ed Horowitz
By Brad Kugler
13 Postal Affairs
What Is Transportation Messaging? By Bob Schimek
SPONSORED CONTENT 07 Optimizing Your Workflow in an Ever-changing Industry BCC Software 11 Digital Mail — A Revolution Interrupted OPEX Corporation 14 It’s All About the Envelope 27 Innovation Designed to Help You Send Smarter Pitney Bowes
30 What to See at NPF
EDITOR’S NOTE VOLUME 31, ISSUE 3 MAGAZINE STAFF President Chad Griepentrog Publisher Ken Waddell Editor Amanda Armendariz firstname.lastname@example.org Editorial Director Allison Lloyd email@example.com Editorial interns Kaylyn Geiger Kristyn Sommers Contributing Writers Lisa Cross, Mark M. Fallon, Gordon Glazer, Ed Horowitz, Brad Kugler, Chris Lien, Jeff Peoples, Bob Schimek, Gary A. Seitz, Kathleen J. Siviter Audience Development Manager Rachel Chapman firstname.lastname@example.org Advertising Ken Waddell 608.235.2212 email@example.com Design Kelli Cooke RB Publishing Inc. PO Box 259098 Madison WI 53725-9098 Tel: 608.241.8777 Fax: 608.241.8666 Email: firstname.lastname@example.org SUBSCIRBE Subscribe online at MailingSystemsTechnology.com. Subscriptions are free to qualified recipients: $20 per year to all others in the United States. Subscription rate for Canada or Mexico is $40 per year, and for elsewhere outside of the United States is $45. Back issue rate is $5. SEND SUBSCRIPTIONS TO: Mailing Systems Technology, PO Box 259098, Madison WI 53725-9098 Call 608.241.8777 Fax 608.241.8666 E-mail email@example.com Online at MailingSystemsTechnology.com. REPRINT SALES ReprintPro 949.702.5390 www.ReprintPros.com All material in this magazine is copyrighted ©2018 by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to Mailing Systems Technology, RB Publishing Inc. or its staff becomes property of RB Publishing Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or Mailing Systems Technology. RB Publishing Inc. and/or Mailing Systems Technology expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine. MAILING SYSTEMS TECHNOLOGY (ISSN 1088-2677) [Volume 31 Issue 3] 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
THE USPS: A CLASSIC EXAMPLE OF INNOVATION BY AMANDA ARMENDARIZ
nnovation. The word conjures up images of forward thinking, creativity, transformation, and breakthroughs. Now, those who are not in our industry may scratch their heads at my use of this word in regards to mail and the United States Postal Service. To outsiders, mail may not seem exciting — and certainly not innovative. But our whole industry is actually built upon innovation, and it continues to evolve to this day. Kathleen Siviter’s article on page 20 is a fantastic example of this creativity. Forty years ago, the postal industry’s infrastructure was overwhelmed with the explosive growth of mail, and in response, it engaged those who benefit from this industry in a collaborative effort to reduce costs and workload, thereby allowing the Postal Service to deliver this communication method in a timely, efficient manner. I’m referring, of course, to the concept of workshare — something that has been around for four decades and is still going strong. This is the perfect example of the type of innovation that is a hallmark of the USPS. Now, I’m not arguing that the USPS can sit back and simply rest on its laurels. The declines in mail volumes are real, and on
top of that, the Postal Service’s bottom line is hindered by the pre-funding requirement (if this requirement was not in place, the reports would be a different story). But I feel confident that the innovation that has spurred on the mail industry in the past will continue to be evident as we work together to navigate this ever-changing, increasingly digital world. That’s one reason I’m so excited for this year’s National Postal Forum. This is one of the best ways for mail professionals to come together and discuss what we can do to ensure mail remains a relevant communication method. I know there are a huge variety of exhibitors to see and sessions to attend, but if you have the time, please stop by our booth to say hello. I’d love to chat with you about the future of mail. As always, thanks for reading Mailing Systems Technology.
MailingSystemsTechnology.com | MAY-JUNE 2018
GREEN AND SECURE: DOES IT MEET THE NEW MOVE UPDATE REQUIREMENTS? BY ANITA PURSLEY
hen the Postal Service first announced its new Green and Secure program, it was described as an alternative method to meet the Move Update standard. However, this inadvertently caused confusion, as the Green and Secure program is a subset of the Address Change Service (ACS) program and does not alleviate a mailer from meeting the Move Update requirements. As with other Move Update methods, the Postal Service’s expectation is that Green and Secure participants will update their mailing addresses within 95 days of mailing. The USPS has proposed this program, but please note the final rule has not been published.
So, What Is Green and Secure? First-Class Mail and USPS Marketing Mail pieces that have an ACS Change Service Requested Service Type ID (STID) in the Intelligent Mail barcode (IMb) and are identified as Undeliverable-as-Addressed (UAA) would be discarded rather 6
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than returned to sender. The program is intended to reduce the cost of processing UAA mail. Mailers would utilize an ACS Change Service Requested STID on First-Class Mail or USPS Marketing Mail, or a Secure Destruction STID on FirstClass Mail. Mail pieces bearing the above STIDs will be discarded or securely destroyed and will not be subject to Move Update assessment charges. In response to concerns expressed by members of the Mailers’ Technical Advisory Committee (MTAC), the Postal Service agreed to change the Move Update calculation. Green and Secure change-of-address (COA) errors are now removed from the numerator so that fears of affecting the current .5% threshold are alleviated. Electronic notification and information will be provided via the Mailer Scorecard.
There’s a Minimum Requirement to Comply... and There Are Best Practices A mailer could take advantage of the program and simply use the proper STIDs
that direct the Postal Service to destroy undeliverable mail pieces without updating their addresses. No assessments, and who would know, right? The reality is that the Postal Service knows every notice that’s been sent to a mailer. At what point does it become egregious and raise a red flag? It’s a bit like playing Russian roulette. So, how can you ensure your company is compliant with this new Green and Secure program? The best offense is a good defense: Work on ways to reduce the amount of UAA mail you are generating. By generating higher-quality addresses, you have fewer pieces to worry about for the Green and Secure program, and you’re bolstering your Mailer Scorecard. Address hygiene is of the utmost importance to help reduce UAA mail. All mailers already know that the first step is to run your list(s) through the Coding Accuracy Support System (CASS) processing. Some software and service providers offer additional address correction services that leverage consumer data unavailable to the USPS to further improve CASS results. You have similar options when it comes to updating addresses for individuals, families, and businesses that move. NCOALink is still the next best step and one that satisfies the Move Update requirement. However, best practices extend beyond mail preparation. Post-mailing, it’s essential to run ACS to learn which of your mail pieces may not have been delivered and for what reason. ACS is free through the USPS when used with a Full-Service mailing. ¾ As Senior Manager of Industry Affairs at BCC Software, Anita Pursley is entrenched in major industry events and associations, representing BCC Software and advocating on behalf of its customers. She has a breadth of industry experience and expertise, including serving for two years as the Industry Co-Chair of the Postmaster General’s Mailers’ Technical Advisory Committee (MTAC) and similar roles at some of the industry’s largest and most influential companies.
current, trust your automated postal software to complete the presort phase.
OPTIMIZING YOUR WORKFLOW IN AN EVER-CHANGING INDUSTRY It’s no secret that the postal industry is ever-changing, and with it, all companies in the industry need to evolve, too. From vacancies on the USPS® Board of Governors to new technologies and promotions on the horizon, there is a lot to keep up with. So, how can your company continue to stay profitable and relevant? Enhance Your Workflow Simply put, your productivity relies on the efficiency of your workflow, so ensuring it’s optimized is of the utmost importance. An optimized workflow can save you time and money by reducing postage and improving operational efficiency, so you can get more jobs out in less time and allocate labor to other parts of your business. How do you achieve this? Streamlining is key. Since correct and clean data ensures that your direct communications are getting to the intended audience, having proper data quality tools and solutions in place is imperative. Streamlining
your workflow so that data comes first is essential and incorporating automated processes will accomplish this. In fact, it’s estimated that by the year 2019, 79% of mailrooms will be automated. Now, this does not mean expert mailroom personnel will be out of work, but rather it means that you can reallocate your manpower and dollars to different parts of the company, giving you the ability to take on more jobs, and ultimately resulting in higher profits. You may be asking yourself, where do I start? The presort and logistics part of your workflow is where data enhancement lives — and we all know that data is king when it comes to effective direct communications. Powerful services like Enhanced Merge/ Purge from BCC Software works to remove and suppress duplicate records in your lists, saving you resources and ensuring your direct mailpieces are getting to the intended audience. Once you are confident that all the addresses on your list are complete, correct, and
Embrace Multichannel Marketing Multichannel marketing is no longer an idea on the horizon, it’s the reality of our current world. Direct mail still reigns supreme as a marketing channel, proving the highest response rates compared to its digital advertising counterparts like email and social media, according to the DMA. So, how do printers and mail service providers extend beyond traditional services offered to increase their business overall? Take a look at the marketing supply chain — how can you insert your services? What can you offer to your customers that you may not be already? Partner with an Industry Leader BCC Software has been in business for 40 years, keeping up with technology so that our software solutions always benefit our customers. Our leadership team is deeply entrenched in all things postal, and our Customer Support team is comprised of experts with a complex knowledge of not only BCC Software solutions, but of the mailstream and USPS regulations as well. In fact, each Customer Support representative is USPS Mailpiece Design certified. Partnering with an established company like BCC Software puts you ahead of the curve and sets you up for success. Contact BCC Software to learn what other effective data quality solutions we offer at 800.337.0442, or visit us at bccsoftware.com.
firstname.lastname@example.org 800.337.0442 bccsoftware.com
ADVANCING DIRECT MAIL OPPORTUNITIES WITH HIGH-SPEED INKJET BY LISA CROSS
n a world where printed direct mail is often in competition with digital media, high-speed inkjet printing devices are helping to level the playing field and creating new opportunities. Fullcolor direct mail with personalization — produced on high-speed inkjet devices — is proving successful in connecting and motivating consumers on emotional, practical, and subliminal levels. According to a Keypoint Intelligence – InfoTrends’ survey of consumers, direct mail pieces that are relevant to recipients and include personalized content are more likely to get opened and read (Figure 1). Further supporting the effectiveness of personalization, in a different Keypoint Intelligence – InfoTrends’ study, 31% of marketers surveyed reported that the primary driver for personalizing print is they observed a direct correlation between personalization and response rates. The use of personalized marketing is picking up pace as marketers are seeking better ways to capture attention, build brand awareness, and ultimately drive sales revenue. Delivering the right content to the right audience, in the preferred channel, at the right time, in the right context helps drive desired consumer actions (e.g., make a purchase, donate, or sign up). 8
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The ability to personalize enhances results and is a factor driving growth of digitally printed direct mail. According to Keypoint Intelligence – InfoTrends’ annual digital page volume application forecast, direct mail volume is expected to grow by more than nine billion impressions from 2016 to 2021 (Figure 2).
runs, and versioning. Inkjet technology can affordably deliver the customized direct mail communications that will engage an audience. While many direct mailers are turning to database marketing to improve results, there are limitations with traditional offset printing processes used to produce high-volume direct mail. While offset presses offer customers economies of scale in producing long-run print jobs, images are static and shorter runs are cost-prohibitive. The only way customer data could be leveraged with personalized offset printed direct mail is to laser-print messages on pre-printed work. This two-stop process is time-consuming and limited in its ability to leverage customer data. High-speed digital inkjet printing enables direct mail campaigns to include unique text and graphics based on a recipient’s demographic characteristics or purchasing preferences. Higher levels of personalization typically lead to increased ROI of a direct mail campaign. In addition, inkjet allows print providers to combine or gang together different jobs or different components in a campaign in the same print run, which leads to big efficiency gains. Direct mail programs can include many components such as a letter, a reply device, certificate, and other printed pieces. All of these pieces can be printed at the same time, and then they can be folded and cut separately.
The ability to gang jobs and run them by geographic region also has a major impact on postal savings. By commingling different mail pieces into larger-volume batches, customers can take advantage of bulk volume mailing discounts. This is important because postage is typically the highest expense in direct mail campaigns. The value high-speed inkjet production brings to direct mail is that it can do things that other print technologies can’t, including the ability to produce more affordable high-value personalization, short
The ability to gang jobs and run them by geographic region also has a major impact on postal savings. By commingling different mail pieces into larger-volume batches, customers can
take advantage of bulk-volume mailing discounts. This is important because postage is typically the highest expense in direct mail campaigns. Key benefits high-speed inkjet offers direct mail production include: } A single-step process (versus printing offset shells and then laser printing them) } No printing plate changes } Reduced labor } Pre-printed shells/inventory } Waste reduction
} Ganging together different jobs } Printing a wide variety of applications (e.g., cards, letters, labels) } The ability to produce in postal sequence at lower postal cost } Moving to a completely digital workflow High-speed inkjet printing is taking direct mail to a new level by enabling affordable production of pieces targeted to individual recipients. Targeted direct mail pieces drive response rates and business results. In
addition to better campaign results, inkjet offers an opportunity to reduce postal costs. Overall, inkjet is creating new opportunities in direct mail. ď‚ž Lisa Cross, Associate Director of InfoTrendsâ€™ Business Development Strategies Consulting Service, is responsible for conducting market research, managing consulting projects, and assisting companies in developing multi-channel communication, marketing, and content strategies. MailingSystemsTechnology.com | MAY-JUNE 2018
UNDERSTANDING THE LOGISTICS OF COURTESY PALLETS BY JEFF PEOPLES
irtually every mailing operation, large or small, encounters the issue of how to handle loose sacks or trays of mail. Whether it is an entire mailing job that is just too small to meet the Domestic Mail Manual (DMM) preparation requirements, or those few leftover sacks or trays from a large mailing, the issue is the same â€” how do you present these loose trays to the United States Postal Service (USPS) for processing? Luckily, the USPS understands that this is a common occurrence and allows for mailers to present these sacks and trays on pallets that do not meet the DMM minimum volume requirements. These pallets are commonly known as courtesy or convenience pallets. So, how (and when) do mailers prepare courtesy pallets? Logistics For mailers who produce very small-volume mailings, handling a few loose trays or sacks is usually not an issue. However, in larger mailing operations, these small-volume mailings, or the residual loose trays/sacks from large-volume mailings, can easily get lost or shuffled to the side and forgotten. By placing these loose trays/sacks onto a pallet, however,
MAY-JUNE 2018 | MailingSystemsTechnology.com
it is much easier to handle them from a logistics standpoint, and they are more likely to be processed using the same workflow as regular USPS-sorted pallets. Courtesy Pallet Preparation Unlike USPS-sorted pallets, which follow the DMM mail preparation requirements for the appropriate class of mail and processing category, courtesy pallets do not follow any DMM mail preparation requirements. In many cases, this means that the sacks or trays are simply placed onto pallets in the sequence that they are physically produced, without regard for destination ZIP Code or sortation level of the sack/tray. The destination line on the pallet placard in these cases would be the appropriate mixed destination information for the origin entry point, as indicated in the appropriate labeling lists for mixed mail. However, some software programs that create courtesy pallets attempt to closely approximate the DMM preparation requirements for the appropriate class of mail and processing category but disregard the minimum weight requirements. This is often the case when the mailing is being drop-shipped to additional entry points and the mailer wishes the loose trays/sacks to be included in the drop
shipments. In these cases, the destination line on the pallet placards also follows the approximated DMM mail preparation requirements. Regardless of whether your courtesy pallet preparation approximates DMM preparation requirements or is in simple production sequence, it is important that a placard be placed on these courtesy pallets. This placard should meet DMM requirements, and it should also include the appropriate Intelligent Mail container barcode. Inclusion in eDoc It is also important that mailers not create these courtesy pallets without including them in their eDoc submissions. This is critical so that the sacks and trays can be connected to the pallet information and that the appropriate nesting/sortation relationships are evident in the files submitted to PostalOne! As such, it really requires software to be able to properly generate these courtesy pallets, include the pallet data in the eDoc, and properly create the barcoded pallet placards. Resources Check with both your presort and post-presort software providers on the availability of courtesy pallet preparation in their software solutions. The USPS also has a guide (https://postalpro.usps.com/fullservicepallets) to assist mailers in determining when pallets MUST be prepared for Intelligent Mail Full-Service mailings. We recommend that mailers consult with their USPS acceptance staff before beginning to prepare courtesy pallets so that any acceptance issues can be avoided prior to going into production. Likewise, mailers should test submitting their Mail.dat files containing courtesy pallets using the Test Environment for Mailers (TEM) area of PostalOne! prior to going into production. Âž Jeff Peoples is President, Founder, and CEO of Window Book. With over 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.
DIGITAL MAIL — A REVOLUTION INTERRUPTED The post-9/11 era reset our national consciousness in many ways. Our vulnerability revitalized the need to focus our attention on issues of safety and security. From travel restrictions to personal privacy, times were changing, and we began to adjust to the “new normal.” One change, in particular, sought to capitalize on a new, more secure way of delivering mail. Many may have forgotten that soon after the World Trade Center attacks, a new threat was exposed via the postal system. Specific individuals were being victimized by hazardous materials, sealed in envelopes, delivered straight to their targets. This new threat awareness paralleled the growing use of the term “digital mail” in the industry vocabulary. New questions were asked that began to permeate conference keynote speeches and exhibition break-outs. A revolution seemed just around the corner. Industry leaders and vendors aligned to promote their version of the optimal choice in digital mailroom tech. A new service model took shape, built around the idea that mail operations could be taken offsite where envelopes could be securely examined, then opened, and the contents scanned; the end result being an email delivery system that protected end users from harm. Bonus, this seemed a perfect match for a world that was hungry for information, whose workers were constantly on the go. Safe, efficient, paper-free… what could be better? As great as the model seemed, it fell
far short of many of the predictions of full-scale market adoption. But why? Certainly not because the technology didn’t exist. Single-touch extraction and scanning solutions made for efficient physical handling of mail. Backend software solutions were developed to route content images to the intended recipients. Organizations invested in centralized mail facilities with space to scale up as more customers came on board. Unfortunately, though, many fell short in building a customer base who, in spite of the seemingly obvious benefits, was willing to accept the risks associated with changing the tried-andtrue mail delivery system. Change brings risk, which in turn become barriers to adoption if they cannot be overcome by a significant margin. In this new digital mail model where everything is opened and scanned, these barriers were significant. How many of us have received sensitive or personal mail at the office? How comfortable would you be knowing that your personal information was being viewed, transmitted, and stored by a system that was beyond your control? Simply eliminating personal mail from the equation did little to mitigate the concerns. For example, in the highly regulated HIPAA environments, the costs of violating patient confidentiality can be astronomical. In fact, avoiding these fines is so critical that some organizations have in place measures that slow down their processes in order to minimize mistakes. It is little wonder that end users were reluctant to adopt a technological approach that could,
if mismanaged, represent hundreds of thousands in fines and corporate liability. Further, there are real advantages in a paper-based system that could not be overcome by a completely digital “open everything and scan” paradigm. For example, paper doesn’t accidentally get lost in a hard drive crash, is not subject to digital virus corruption, and is less likely to be accidentally forwarded to the wrong person. The barriers to adopting the “open and scan” distribution model of digital mail extended beyond just the end users to whom the mail was intended to reach. Managed services organizations, whose profit margins relied heavily on manual labor, also struggled with a model that essentially eliminated the manual processing of mail delivery. Not only would these organizations be required to assume the above-named risks, but would also have to adjust their proven labor-based business model for one that, via technology, reduced the dependency on the very thing upon which their profit margins were built… people. So, fast forward to present day. Our culture is continuously developing new ways to do old things. From watching TV to networked home appliances, technologies that were once beyond our comprehension are now commonplace. In a technological age, we exist in a world of problem solvers. Every innovation has had its challenges so why should the digital mailroom be any different? The barriers of the past may yet find ways to be overcome if the benefits prove significantly compelling. Perhaps timing and circumstance played a role in preventing wide-spread adoption in the past. If so, perhaps newer, better technology lies just around the corner that will put to rest the concerns of yesterday. Certainly the future is wide open to revolutionary possibilities.
OPEX Corporation 856.727.1100 email@example.com www.opex.com
DIRECT MAIL EVOLUTION
marketer is to make prospects feel like your company is everywhere.
QUANTIFY YOUR DIRECT MAIL RESPONSE RATES USING MAIL TRACKING BY BRAD KUGLER
owadays, it seems like new digital marketing techniques are booming. However, it is important to remember that when used alone, these techniques will never outshine direct mail marketing when it comes to response rates. When done correctly, direct mail marketing can achieve about a 3.7% response rate on a house list and a one percent rate with a prospect list. In contrast, all the digital channels combined only deliver a 0.62% response rate — when used without the support of offline marketing efforts. Even though response rates for mail are exponentially higher compared to other channels, it’s our job as marketers to look out for new ways and tools in which we can help response rates continue to increase and, more importantly, quantify where the results are coming from. Mail tracking has been available for many years, but many companies still don’t understand its potential. The reality is, when used with today’s digital tools, mail tracking is a powerhouse when it comes to calculating the response rates
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of ongoing marketing efforts. But, you may be asking, how? Using Mail Tracking to Your Benefit The first way a company could benefit from mail tracking to increase response rates is by using it as a tool to know when to trigger the rest of the marketing channels. For example, if your mail prediction says that mail will hit next Thursday, you could decide to set up an email campaign so that the prospects receive a warm-up email two days before they receive the mail piece and two days after in order to make the messaging more memorable. This technique is not just good for emails; you could also set up your online ads and social media campaigns so that they all automatically trigger on the day that your mail is going to hit. Remember that repetition is vital for any successful marketing campaign. However, knowing when to use repetition is even more efficient. When designing your omni-channel marketing campaign, remember that 80% of sales are done between the eighth and 12th contact. Your goal as an omni-channel
Putting This into Perspective Imagine you’re expecting a package to be delivered to your door, and you have the power to track it online. Do you feel like you have to check online several times during the day, just to see what its journey is currently like and when it will actually arrive? Yes, I do, too. If you think about it, tracking a package not only allows a customer to see where their package is currently, but it also builds up excitement and curiosity. The same thing is true for Informed Delivery. This service introduced by the USPS can be seen as the mail tracking system for the end user who is receiving the direct mail campaign. Informed Delivery notifies users via email with an image of the mail they’ll receive that day. This alone increases your chances of turning a simple impression into a phone call or a website visit… but there’s more. Informed Delivery lets you engage prospects at another level by allowing you to enhance your mail piece digitally with the addition of a full-color ad, interactive content, and a link redirecting to your website. Enhancing a piece digitally is as easy as uploading it to the platform and adding some minor details to it, making it simple for direct mail houses to get all of their clients to take advantage of this incredible feature that the USPS provides. The best part is, you can see how many people checked their Informed Delivery account and how many people clicked on the interactive ad, proving the effectiveness of the direct mail impression! Let’s always remember that our job as marketers is to take maximum advantage of the marketing channels and tools available so that we get noticed by the right people, at the right times. ¾ Brad Kugler is the 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.dm20.com or call 800.956.4129 for more information.
WHAT IS TRANSPORTATION MESSAGING? BY BOB SCHIMEK
o best answer this title question requires taking a couple of steps back to provide some needed context. A couple of years ago, the Postal Service established the National Operations Command Center (NOCC). The Postal Service has divided the United States into seven districts (Northeast, Capital Metro, Eastern, Great Lakes, Southern, Western, and Pacific), and each district has a Vice President of Operations. Each district also has an NOCC, which is used to communicate and coordinate the flow of mail through all the Postal Service processing plants. Note, there is also an eighth NOCC located at USPS headquarters in Washington, D.C. The NOCCs provide real-time monitoring of mail processing within each district and allow operators to see and communicate what is going on within and across districts. The NOCC is used as a tool to identify facilities that are at risk of not meeting service standards and machines that are not meeting planned operations, which can include throughput, run hours, and connectivity. This information is refreshed every 15 minutes and provides a real-time status of processing operations across the entire US. In addition to being able to monitor the status of individual processing facilities
and machines, the NOCC has the ability to monitor the flow of mail between districts and processing facilities. It has the ability to track the status of flights that are carrying mail and know if they are on time, delayed, or possibly even cancelled. Since the NOCC was initially deployed, the Postal Service has enabled GPS on all of the trailers it uses to move mail between processing facilities via surface transportation. This GPS information gives the NOCCs the ability to see what trucks will be showing up early, on time, late, or critically late. This helps them to better manage the yard, dock doors, and, more appropriately, staff processing facilities and schedule processing equipment based on the mail they know will be arriving. Any truck arriving critically late can be given priority in the yard over a truck that is showing up early. The obvious goal is to get it parked at the dock as quickly as possible and get the mail unloaded and moved to the appropriate processing equipment to try and prevent service standards from being missed. The Power of Visibility All this additional visibility is allowing the USPS to do predictive workflow planning. While this is helping the Postal Service to balance reducing labor hours while also maintaining or improving service
standards, there is still a significant amount of mail that the USPS does not have visibility into. This would be all the mail that is being transported and/or drop-shipped by the mailing industry. Having visibility into all of the mail showing up on industry transportation could benefit the mailing industry and allow the Postal Service to extend the benefits that it is currently taking advantage of with its own transportation. These benefits could include improved yard management by knowing if a truck is going to be arriving early, on time, or late for its scheduled appointment. There could possibly be automatic check-in when a truck arrives at a processing facility, better dock management, and staffing to reduce wait times for unloading, not to mention better predictive workflow planning based on knowing the type, sortation, and quantity of mail that is arriving on industry trucks. Obviously, there are some clear win/win scenarios for the mailing industry and the Postal Service. In April, the mailing industry took the first step to help enable these benefits. In the Idealliance Mail.dat 18-1 specification, which the USPS started supporting on April 8, 2018, several new files were added to enable transportation messaging across the mail supply chain. This would include communication between industry partners but could also be used to communicate much of the same information that the NOCCs are using for their internal postal transportation. This initial release of transportation messaging probably will not see a live implementation. However, it has served an important purpose, which is to get the dialogue between the mailing industry and Postal Service started. Ultimately, transportation messaging could be the next big step forward to further optimize the end-toend mail supply chain, providing benefits and cost savings for both the mailing industry and the Postal Service. Âž Bob Schimek is Senior Director of Postal Affairs at Quadient. He is a member of PostCom, Idealliance, and the Mailersâ€™ Technical Advisory Committee (MTAC). Contact him at firstname.lastname@example.org. MailingSystemsTechnology.com | MAY-JUNE 2018
Envelopes have been a part of our society for longer than you may think. Some historians believe the first envelopes were invented in China around 3500 BC, as a way to keep royal secrets safe from prying eyes. Of course, these envelopes looked nothing like those that we receive in the mailbox on a daily basis. These ancient envelopes were hollow clay spheres sealed with more clay over the opening, which was then broken by the recipient upon receipt. There’s definitely no way to tamper with those types of envelopes! Our modern envelopes naturally look much different but still serve the same general purpose — to get written communications from point A to point B without damage or unauthorized views. Luckily, they’re also a lot easier to carry and open than their ancient predecessors, largely thanks to a man named Americus F. Callahan. Callahan received the first patent for a window envelope in 1902, and mail This special sponsored section takes a look hasn’t been the same since. So while some folks may take our modern at some of the providers who can help you envelopes for granted, that would be a mistake. optimize one of the most crucial components The envelope is the first physical touchpoint your of mail — the envelope. customer has with your communications, so don’t overlook its importance. The companies listed below can help you ensure your mail piece is well-received by the end recipient.
IT’S ALL ABOUT THE ENVELOPE
MAY-JUNE 2018 | MailingSystemsTechnology.com
EnvyPak, America’s #1 clear envelope manufacturer, recently announced an Automation Letter Rate-approved, machine-insertable, patent pending, clear plastic envelope format. This monumental USPS approval can reduce postage for marketers by as much as 57%. Columbus, Ohio-based EnvyPak manufactures clear and printed polypropylene envelopes developed specifically for the direct mail industry. Our focus is centered around providing innovative cost-effective mailing products that inspire audiences to act. Trusted by the world’s most recognized brands, EnvyPak envelopes rise above typical mailbox clutter to maximize ROI. EnvyPak envelopes are manufactured from recyclable crystal clear polypropylene that is engineered to protect envelope contents in the mail stream and to work with most automated insertion equipment. Our high-end “interactive” printing technology enables us to decorate clear envelopes in up to 10 colors with graphics that work with the printed insert to provide a truly unique mail moment. Call us to discuss your next project at 877.925.3052 or visit us at www.envypak.com.
Kirk-Rudy’s KolorJet is a high-speed, fullcolor, inkjet printing system. Using HP’s thermal inkjet technology with four 4.25” print heads, the Kolorjet can produce full-color images, graphics, and variable data at 600 dpi quality. Combined with a heavy-duty transport base that Kirk-Rudy is famous for, this color inkjet can print at speeds of 500 feet per minute, or a box of 500 #10 envelopes in one minute. This high-production color inkjet printing system is designed for continuous runs. The hot swappable 775 ml dye-based ink cartridges ensure the unit never has to stop to re-load ink. With automatic head wiping at startup, there is virtually no maintenance required. Together with a Kirk-Rudy feeder and delivery conveyor, the KolorJet can offer a profitable alternative to the smaller, slower digital color printers on the market today. For more information, visit www.kirkrudy.com/ kolorjet/.
OKI Data Americas is backed by Tokyo-based parent company OKI Electric Industry, a
$4.0B global public corporation, and is recognized for pioneering “next generation” LED technology for color-critical applications and delivering world-class print output to the most reputable brands and respected business leaders in the country. OKI’s white toner print systems provide production-grade color quality in a compact and profitable short-run footprint. Our C9 product line delivers white spot color or color-on-color with intense penetration — all in a single pass and utilizing best-in-class industry white toner technology. Accepting up to 52” banner length requirements and accommodating media versatility and flexibility, there is virtually no print job that cannot be supported with OKI’s C9 print system. OKI’s range of C9 models enables you to extend your in-house color printing capabilities, adding new offers to your product portfolio — and delivering a lower cost-per-print for your customers — while preserving color consistency and registration perfection. Unlock new high-value revenue streams by integrating white toner technology into your product portfolio. The low cost of ownership and high-margin opportunity make it a great time to invest in the C9 series printers and complementary envelope feeder system. www.okidata.com
Increase mail piece effectiveness by printing high-quality, variable, full-color text and images on envelopes inline within your mail inserter. Pitney Bowes Print + Messenger® color inkjet printing system turns the everyday business envelopes into a powerful marketing tool — with high open and read rates. Studies show consumers are more likely to open a mail piece with colorful graphics on the envelope. Tap into that behavior and drive greater response by cost-effectively printing personalized messages and graphics directly on envelopes. Inline envelope printing can also help you to lower costs and improve operational efficiency by eliminating preprinted envelopes, reducing envelope storage needs, streamlining application changeover, and commingling mail. Creating personalized envelope messaging is easy. The Print + Composer software merges address and postal data, marketing messages, and images to create dynamic envelope content. It
simplifies the creation of envelope templates, making it easier to create and print higher value communications. You can personalize messages down to each individual envelope. With high-impact color and graphics, your mail piece delivers a great first impression before it’s even opened. Learn more about Print+ Messenger and the family of inline printing solutions at https://pbi.bz/2HwTfDP
STATES a WESTERN ENVELOPE & LABEL Western States Envelope & Label is an envelope and label manufacturer dedicated to serving printers, distributors, mailers, and the graphic arts industry. In business since 1908, Western States is headquartered in Butler, Wisconsin and has five full-service facilities, including one label plant. The company is known for its expansive offerings, progressive manufacturing techniques, and commitment to environmental initiatives, including many FSC and SFI Chain-of-Custody Certified products. Customers count on Western States for the industry’s largest inventory of in-stock products ready for immediate shipment; convenient 24/7 online ordering; expert sales and service support; and custom envelope and label manufacturing capabilities. We listen to our customers, learn what they need, and keep moving forward to make WSEL the place where “Your Message is Our Mission.” To learn more, please call 888.894.6572 or visit www.wsel.com.
FEATURED ENVELOPE SOLUTION PROVIDERS
ENVYPAK www.envypak.com KIRK-RUDY www.kirkrudy.com OKI DATA www.okidata.com PITNEY BOWES www.pitneybowes.com WESTERN STATES ENVELOPE & LABEL www.wsel.com
MailingSystemsTechnology.com | MAY-JUNE 2018
WHERE IS YOUR RETURNED MAIL HIDDEN?
Every business that sends out mail pieces grapples with the issue of returned mail. Luckily, there are effective ways to reduce its occurrence. Gary A. Seitz
If your business or institution sends out large volumes of mail, it’s there. No matter how good your customer relationship management (CRM) system is, everyone has it. In many cases, it’s hidden from “the bosses,” stashed in a closet, or tucked under desks, cabinets, and tables. Sometimes, it may even be filed in the blue dumpster behind the building or recycled. To what am I referring? Trays and tubs of returned mail, of course. Why all the avoidance and subterfuge? Departments responsible for mailings don’t want to be caught with returns. It casts the perception of mail failure. “Why is mail coming back from our campaign? 16
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It’s wasted money!” It even leads to mailing budget reductions for the department — and with good reason. Our own analysis of the expenses in returned mail indicates an average of $3.00 per piece on the low end. When you factor in customer churn rates, customer service calls, and future misdirected mailings, the rate may climb as high as $50 per piece of mail. I visited one company and asked about their returned mail process. They quietly took me to the back of the building and opened the door to an abandoned cleaning closet. Inside, there were stacks of yellow-stickered returned mail pieces, and they had no idea what to do with them. What happened when
the closet was full? It got dumped, and the process started over again. A former employee in the development department shared a story of a unique job task. Shortly after-hours in the evening, she was asked to take the trays of returned mail to the parking lot and place them in the trunk of the director’s car. Like a mobster hit, the “body in the trunk” was never seen nor heard from again. The problem is that although everyone is frustrated with the rate and expense, most businesses or institutions don’t have a defined plan or process for dealing with returned mail; nobody on the staff is responsible or accountable for dealing with
it. It piles up, gets hidden, and rarely gets dealt with. DEALING WITH RETURNS Some operations do have a plan in place to manage their returned mail. Typically, the request is, “When you have time, enter these into the system.” That immediately brings two issues to the forefront: Who has the time, and what happens when you enter them in the system? Few employees have the interest or spare time to manage returned mail. Therefore, it doesn’t get done, and those same names and addresses continue to get mailed again and again — and returned again and again, setting off a vicious mail cycle. “Entering them in the system” usually means disabling the account from future mailings. No effort is made to locate the lost customer or donor — either with a phone call or internet search. The hundreds of dollars spent in marketing and sales dollars to find, attract, and retain the customer are wasted, as are potential sales opportunities. WHAT CAN BE DONE? First, management at all levels needs to be aware that no CRM system, and no mailing
list, is perfect. On average, four percent to 10% of any mailing is Undeliverable-As-Addressed (UAA) and subject to returns. In its last fiscal year statistics, the USPS reported that 4.6% of all mail was classified as UAA, with 21% of all UAA mail returned to the sender. In the first quarter of this fiscal year, the USPS also reports that 68% of UAA mail is attributed to a Move Update. Returned mail happens, period. For the smaller mailer, providing the actual mail to the appropriate sales/ account executive to research is the first solution. For most, it means lost commissions, so they have a vested interest in finding and retaining those accounts. For institutions and nonprofits, this is a perfect opportunity to utilize volunteer staff. Again, a few phone calls and web searches may help resolve many of the returns. Larger mailers need to designate a CRM data steward and develop a process that involves management of the returned mail, from extraction (if needed) to research, data entry, and re-mail. The process should also include preventative actions to reduce the volume of returned mail in the future (again, no list is perfect, and returned mail will always exist as long as there is mail). In some cases, this may involve outside support. RETURNED MAIL PROCESSING Some mail service providers (MSPs) now offer secure returned mail processing services. Mail is picked up and key-entered at a facility before processing. While these services meet privacy compliance regulations, some mailers prefer to scan and provide PDF copies of the mail for entry and management. Depending on mailer capabilities, an account number can be included in the address block for quick entry and matching to the mailer’s database. If not, the
entire address block is keyed. If necessary, envelopes can also be opened with mail extracted so significant other attributes can be keyed, such as an account number, date, or balance. This returned mail data is processed through the USPS Coding Accuracy Support System (CASS)/Delivery Point Validation (DPV) data for initial hygiene, then run against several industry files to identify change-of-address information. It starts with the USPS NCOA database, then identifies address changes dating back beyond the 48-month window of NCOA using other proprietary mailing databases. These databases use the most robust data sets available with links to more than 29,000 continually updated data sources. Match rates range from 35-60% depending on the quality and age of the mailer’s database. PRE-MAIL PREVENTION Of course, pre-mail prevention is the best medicine against the ills of returned mail. Returned mail is the physical evidence that you have issues with your database of customers, patients, alumni, or donors. But with a better understanding behind the root cause of UAA and returned mail, mailers will no longer fear “hiding the evidence.” By addressing the issue head-on (pun intended!) and utilizing additional tools for address management before and after the mailing, mailers will be on the path to future success and fewer returns. So — where is your returned mail hidden? Gary A. Seitz is Vice President of CTRAC Direct and has been a frequent presenter at the National Postal Forum and PCCs around the country for over 35 years. Gary can be reached at GSeitz@ctracdirect.com or by calling 216.251.2500 ext. 4985. MailingSystemsTechnology.com | MAY-JUNE 2018
A QUICK OVERVIEW OF MAILING AND SHIPPING WITH THE USPS The mailing and shipping industry can be daunting for those who are new to it. Here are some ways to hit the ground running. By Gordon Glazer
ongratulations! You have recently been tasked with mailing operations. Now what? Relax and take a deep breath; youâ€™ve got this! Letâ€™s start by focusing on ways to drive savings and, in some cases, improve service times. MAIL: LETTERS AND FLATS Presort: If your company processes a high volume of daily mail (more than 1,000 pieces per day), reach out to the presort consolidators servicing your area. They will show you how to meter your mail at a lower presorted rate with the proper endorsement. There is not much you have to do here; these providers will pick up your mail and consolidate it with the mail of many other businesses in your area to achieve workshare discounts in which your company can participate. This process also works for Flats, Standard Mail, Bound Printed Matter, and small packages. Mail Processing and Department Chargeback: Processing outbound mail (sealing and metering) while also accounting for postage can be a time-consuming
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bottleneck. I advise consulting with your current vendors and explore automation options. If your operation also processes packages, consider a system that includes dynamic best-way routing intelligence. Certified, Return Receipt: If there are more than a couple of these receipts a day, consider a system that can automate the generation, tracking, and archival of the return receipts. Electronically processing them can save postage while eliminating the need to file and store the returned green cards. Address Quality: This is, by far, one of the most neglected areas of opportunity! Try and cut through the never-ending list of excuses and take ownership of this challenge. Become the guardian of your key mailing lists by creating a process to keep the list current for moves (via NCOALink) while also standardizing the address to the USPS-verified standard via the Coding Accuracy Support System, or CASS. This will save a lot of time, money, and embarrassment by getting in front of problems before they occur.
PACKAGES Outbound and Returns, Less than a Pound: First-Class Package Services (FCPS) is a flat-rate (no zones), ounce-based program that beats every option out there except for Parcel Select Lightweight (PSL). FCPS is a premium service with two- to fiveday delivery to every address in the country. It does not require special packaging and, like First-Class Mail, travels by air to the outer zones and is delivered six days a week at no additional charge. PSL packages are picked up by consolidators and inducted deep into the network for last-mile delivery. Consolidators include UPS (SurePost and Mail Innovations), FedEx SmartPost, Newgistics, DHL SmartMail, and OSM Worldwide. These services are a viable alternative when lower costs trump the need for faster speed. Key Savings Tip: Make sure you record these transactions as ounce-based FCPS or PSL. Many systems default to the more expensive Priority Mail (PM) or Parcel Select (PS) programs, which use pricing that is based on one-pound increments,
making it more expensive, especially for longer distances. Outbound and Returns, Greater than a Pound: Here is where the lines begin to blur. Your savings will depend on which service you choose and how the price compares to your existing FedEx/UPS carrier-negotiated rates. This is where that dynamic best-way routing intelligence of an automation solution will pay for itself many times over by comparing the landed costs between service offerings to identify and deliver savings while achieving the desired time in transit (TNT). Make sure the system compares based upon the package dimensions, accurate weight, and provides options based upon when it needs to arrive. Key Savings Tip: By rate-shopping based upon desired arrival time, you can avoid the expensive Express options, especially when the distance traveled is not that far. In most cases, Ground TNT is the same as Express for zones 2 and 3. Flat Rate Upside: Besides direct comparisons using the weight and zone, a more difficult comparison integrates dimensional
charges and service options. Many shippers are still coming to grips with UPS and FedEx increases relating to package dimensions instituted over the last few years. The USPS has not changed its dimensional policies and is more favorable. In addition, it offers Priority Mail Flat Rate, Priority Mail Regional Flat Rate, and Priority Mail Cubic options that can potentially provide benefits to a basic weight/zone best-way routing tool. Key Savings Tip: Reduce the box size by eliminating dead air in your packaging. Consider the use of the USPS Padded Flat Rate Envelope, which is one price regardless of distance (zone). International: There are many choices when it comes to international shipping. One of the biggest differentiators is how the carriers handle brokerage fees and the collection of duties (if any). The USPS acts as its own broker, so brokerage is always included. However, if any duties are owed, the recipient must pay at time of delivery. This may have the undesired effect of the recipient refusing delivery, so plan accordingly. The USPS offers six different ways
to ship internationally. One of the most competitive service offerings is the USPS First-Class Package International Service (FCPIS), which is ounce-based up to 64 ounces (four pounds) and includes basic tracking to most countries. This is the low-hanging fruit that should provide you plenty of opportunity to overachieve in your new role. In addition, I recommend joining your local Postal Customer Council (PCC) or the Mail Systems Management Association (MSMA) chapter to network and learn from others who have already faced the challenges you might be experiencing. Wishing you great success in your new role. Gordon Glazer, CMDSM, CMDSS, MDP, MDC is a Senior Consultant, USPS Specialist at Shipware LLC, an innovative parcel audit and consulting ﬁrm that helps volume parcel shippers reduce shipping costs 10-30%. Gordon is a postal industry veteran with over 30 years’ experience and is a sought-after speaker and industry thought leader. He welcomes your questions and comments, and he can be reached at 858.879.2020 ext. 108 or email@example.com.
MailingSystemsTechnology.com | MAY-JUNE 2018
AN INDUSTRY BUILT ON WORKSHARE: A LOOK BACK The USPS must continue to capitalize on the innovation and partnership that are hallmarks of its workshare program as it navigates the increasingly digital waters. | By Kathleen J. Siviter
t was July 6, 1976. “Silly Love Songs” and “Afternoon Delight” topped the music charts. Gerald Ford was President. The first class of women was inducted at the U.S. Naval Academy in Annapolis, MD. The Soyuz 21 carried two cosmonauts to the Salyut 5 space station. The Cincinnati Reds beat the Montreal Expos 10-7. Steve Jobs was 21 and had recently built a new kind of computer circuit board in his garage, which later that year started a business called Apple… …and the U.S. Postal Service introduced the first ever “workshare” discount
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for presorted First-Class Mail letters sorted in ZIP Code sequence. Fast forward to today’s huge, diverse, and complex mailing industry supply chain. In its 2015 Mailing Industry Jobs Study, the EMA Foundation determined that there were approximately 7.5 million jobs (six percent of the nation’s jobs) and $1.4 trillion in sales revenue (4.6% of total US output) associated with the mailing industry in 2014. A significant segment of these jobs and revenue comes from the mail service provider (MSP) part of the supply chain — from businesses developing software and technology
to support presort, barcoding, and electronic documentation; to those transporting mail in drop-ship programs; to those providing “co” services to improve presort density and drop-ship penetration; to those offering pre- and post-mailing data services around visibility, address quality, and more. HOW DID WE GET HERE? A QUICK HISTORY LESSON… To understand the genesis of workshare, one may need a short history lesson. Luckily, the Smithsonian’s National Postal Museum has put together wonderful exhibits and
documentation around the USPS’ long history, including the origins of workshare and the evolution of the private mailing industry. The Smithsonian, in its overview of the birth of the mailing industry, says: “An explosion of mail in the late nineteenth and early twentieth [centuries] drove post offices and large-volume mailers to work together to handle mail more efficiently. Mailers used new methods of paying for postage which reduced mail handling by postal clerks and enabled the presorting of mail by destination, speeding dispatch and delivery. Mail volume continued to grow to such an extent that by the 1960s, it threatened to overwhelm post offices when deposited en masse by businesses at the end of each work day. This pushed the Post Office Department to embark on a concerted, nationwide campaign to enlist the aid of large mailers in leveling out the daily ‘mountains’ of mail. So began a unique public-private partnership, unprecedented in scope and scale, which continues to this day.”
Anyone who has not read about the explosion of mail by the 1960s and the challenges the USPS was facing, which led to the birth of many innovations — including workshare — should take the time to do so, and if you have not visited the National Postal Museum recently, I highly recommend it! If it had not been for the implementation of workshare programs, a significant portion of the mailing industry would not exist as it does today — and the Postal Service also would not exist as it does today. Workshare discounts promote economic efficiency because the private sector can perform certain activities far more efficiently and at less cost than the USPS can. Just taking one of many documented regulatory oversight procedures looking at workshare, the Postal Regulatory Commission (PRC) in 1999 employed four economists to look at workshare, and they said if workshare were ended, the USPS would have to add 187,000 employees to perform the same activities being done by the private sector through workshare.
Workshare comes in several flavors — the main ones being presort (sorting mail in ZIP Code or delivery sequence prior to entering it with the USPS); barcoding (applying Intelligent Mail barcodes on mail pieces); and drop-ship (transporting mail closer to its final destination). There are also “incentives” for the mailing industry to perform work such as IMb Full-Service requirements (electronic documentation, unique piece/handling unit/ container identification, etc.).These differ from workshare discounts in terms of regulation and how they are developed/implemented by the USPS, but they are similar in that private industry performs work that the USPS then provides a price incentive for. WORKSHARE: GOOD FOR THE USPS Workshare makes the USPS more profitable because it earns more profit on each piece of workshared mail than it does on mail that is not workshared, which is thus costlier for the USPS to handle. Presorted mail bypasses many USPS operations, for example, making it less costly for USPS. Looking at the USPS’
MailingSystemsTechnology.com | MAY-JUNE 2018
data for FY2017, it earns $0.262 profit on First-Class Mail (FCM) presort letters, compared to $0.191 profit on FCM single-piece letters — so the USPS makes an additional $0.071 profit on every five-digit FCM presort letter compared to single-piece. There are other benefits to the USPS from workshared mail. Presorted or dropshipped mail achieves much better USPS service performance than mail that is not presorted or drop-shipped. For FY2017, all FCM presort letters achieved better service than FCM single-piece letters — particularly in the category that has three- to five-day delivery standards, where FCM presort performance was 93.2% on time vs. single-piece performance, which was 85.6% on time. The same performance benefits can be seen in USPS Marketing Mail as well, both at finer presort levels as well as destination entry vs. origin entry. For USPS Marketing Mail letters with five- to 10-day service standards, for example, destination-entered pieces achieved a 95.3% on-time service performance, whereas origin-entered pieces in that category achieved 61.4% on-time performance.
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Workshared mail is also better quality mail — designed and barcoded for automated processing by the USPS, with addresses that are evaluated by the USPS for accurate recipient delivery, and, in the case of IMb Full-Service mail, provides the USPS with data down to the mail piece level, which the Postal Service is using to reduce costs, streamline operations, and improve efficiency. Beyond the more obvious benefits of workshare to the USPS, there are other ways that workshare and the mailing industry it supports benefit the USPS. An entire industry of professional mail service providers, for example, provides front-line marketing, sales, and customer services to end mail owners, taking much of that burden off the USPS to provide. MSPs pick up mail from end users and transport mail to postal facilities, reducing USPS transportation/collection costs. WORKSHARE: GOOD FOR ALL USERS OF MAIL For many of the same reasons workshare is good for the USPS, it also benefits all
users of the mail. By utilizing workshare, business mail senders are able to save on postage, achieve better delivery service, and enhance consumer response to the mail. Workshare helps keep mail affordable, predictable, and viable as a communications choice for many businesses. Without workshare, many businesses might have left the mail long ago in search of other more affordable and efficient means of reaching their customers. As mentioned previously, workshared mail is more efficient for the USPS to handle, thus helping the USPS keep its costs down. The USPS likely could not have streamlined its facility network and consolidated facilities without drop-ship and other workshare initiatives reducing the need for some of its facility and transportation infrastructure. MSPs — who are dependent on workshare for their livelihood — act as strong mail advocates, with marketing and sales teams constantly selling businesses on the use of mail and helping them mail at the lowest possible cost, with high-quality mail pieces and successful campaigns.
Workshare also supports the USPS’ ability to provide affordable mail service to all Americans by helping generate revenue for the USPS to maintain its infrastructure and delivery network. All citizens in the US enjoy the benefits of a postal system providing universal service and a universal price for consumers to use the system — which could not exist without the foundation of workshared mail. WE’VE COME A LONG WAY… The industry that has been built on workshare is amazing in terms of its scope and size, and it is recognized as one of the most sophisticated and extensive in the world. For 2017, 64.8% of all FCM was presorted (67.2% of those to five-digit), and 32% of all USPS Marketing Mail was presorted to carrier-route level. Looking at drop-ship, 12.2% of carrier-route USPS Marketing Mail was not drop-shipped at all in 1997, compared to 1.8% not dropshipped in 2017; 19.6% of carrier-route mail was drop-shipped to destination bulk mail centers (DBMC) vs. six percent to a destination network distribution cen-
ter (DNDC) in 2017; and 47.1% was dropshipped to a destination sectional center facility (DSCF) vs. 91% in 2017. For 2017, 89% of all USPS Marketing Mail was drop-shipped, which shows the growth of the workshare transportation network over the past 20 years. In the EMA Foundation’s study referenced earlier, 92% of the 7.5 million jobs in the mailing industry are private industry (vs. eight percent USPS). That means the private business side of the mailing industry represented nearly seven million jobs in 2014. We’ve come a long way since the 1800s, when businesses first used post cards to advertise in the mail and Montgomery Ward sent its first single-page catalog in 1872. And this vibrant mailing industry would not be where it is today without workshare. BUT ARE WE THERE YET? As the mail mix may continue to change and some mail volumes may continue to decline, both the USPS and the mailing industry must look for ways to add value to the mail and keep it affordable, effi-
cient, and with predictable service. Just like in the past, the USPS, commercial mail users, and service providers should partner to explore new or enhanced workshare opportunities that will help keep mail competitive with alternative channels and competing delivery networks. Those who think workshare opportunities have been maximized may not be thinking outside the box enough — for innovative MSPs, there are lots of ideas for ways to enhance some of the existing workshare offerings as well as new workshare opportunities that should be explored. ¾ Kathleen J. Siviter is Asst. Executive Director of the National Association of Presort Mailers (NAPM) as well as President of Postal Consulting Services Inc. (PCSi), and she has over 30 years’ experience in the postal industry. She has worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), and others, as well as providing consulting services to a diverse set of clients with interest in the postal industry. She also works with PostalVision 2020, an initiative designed to engage stakeholders in discussions about the future of the American postal system.
MailingSystemsTechnology.com | MAY-JUNE 2018
BATTLING COMPLIANCE – A WINNING STRATEGY
Even if you outsource your mail, you still need to ensure that your vendor is meeting the standards of security and compliance. By Mark M. Fallon
When a company decides to outsource customer communications to a service provider, that doesn’t mean the work is done. The vendor must be monitored and managed to ensure that they’re meeting the standards negotiated in the contract. Savvy customers take managing their vendors to the next step — by conducting periodic audits for quality control, best practices, and compliance with postal and industry regulations. United States Postal Service (USPS) regulations for service providers are similar to those for an in-plant operation. The correct class of mail must be used and reflected in the Service Type Identifier (STID) in the Intelligent Mail Barcode. If the mail is pre24
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sented at discounted rates, the addresses must meet the Coding Accuracy Support System (CASS) and Move Update standards. Consistent preparation and submission practices must be followed. These standards are all measured and reported in the Mailer Scorecard. Not covered in the Scorecard is compliance with the “By/For” requirements of the USPS. This means that the documentation submitted to the USPS must identify the mailing agent (by) and mail owner (for) for all Full-Service mailings. This can be difficult for service providers who use a third party to presort their mail. The USPS defines the mail owner as the person/company that:
} Makes business decisions regarding the mail piece content } Directly benefits from the mailing } Pays for postage on the mail piece directly or by way of a mailing agent The mailing agent or mail service provider (MSP): } Acts on behalf of one or more mail owners } Provides mailing service for which the mail owners compensate the mailing agent Mail owner and mailing agent data may be provided through a Mailer ID (MID), Customer Registration ID (CRID), Permit Number, or Publication Number. The USPS recommends providing only one of the fields for any mail owner in the mailing. If multiple fields are provided for a single mail owner or mail preparer, the USPS will follow an order of precedence, where the highest priority is given to MID, second priority to CRID, and third priority to Permit/Publication Number. For many industries — including financial services, insurance, and healthcare — compliance is based around protecting the privacy of the customer. Additionally, let-
ters, statements, or bills must be delivered within a certain time frame. Many companies have a compliance office that establishes policies that include a higher standard than the state or federal regulation. With so much to cover, itâ€™s best to have a team involved with the audit. While not everyone may be able to be onsite, they can contribute to developing the standards to be reviewed. A good team will include compliance, information technology, purchasing, postal experts, and the auditors (internal or external). The team will develop a list of factors to be validated or measured. MAKE THE MOST OF YOUR AUDIT An audit is more than a site visit or quarterly performance review. An audit usually requires a multi-day site visit to monitor operations at times with significant volumes of print, mail, and fulfillment. During the visit, the auditors examine technology, review software and workflow, inspect security controls, and interview select employees and management. If possible, the auditor will follow a production file from receipt, to print, to insert and presort. MailingSystemsTechnology.com | MAY-JUNE 2018
The agenda should be defined in advance. Based on the concerns of the audit team, the customer should tell the vendor which policies, procedures, and workflows will be reviewed. While factors may differ by industry and contract, the list could include: } Explanation of how data files are received and confirmed } Address cleansing } Document composition } Job tracking, including alerts for delays } Piece tracking } Reprints } Postal data and documentation While watching the work being produced, validate that the operators are following the procedures. Pay specific attention to the start and completion of jobs. Observe how any jams or reprints are handled. Follow the job until it’s handed off to the USPS or the presort vendor. Following the site visit, a report should be created that identifies all deficiencies, risks, and remedies. Review the report internally to ensure that everyone on the audit team agrees with the issues presented. Make sure that there’s consistency on rating the severity of a deficiency and the associated risks.
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For example, most vendors have their operators follow a “touch and toss” standard for all work processed on the automated inserters. That means if a piece is damaged or jammed, the operator doesn’t manually fix the mail piece. Instead, the original is destroyed, and a reprint is requested. However, the auditor may note that the shred bin and the recycle bin are so close that they are touching each other at the work station. While a job is being processed, they observe an operator accidentally toss a damaged piece into the recycle bin, instead of the shred bin. This is serious breach of security. Luckily, the remedy is simple — move the recycle bin away from the shred bin. Additionally, the vendor may want to hold reinforcement training on security and the importance of using the shred bins for any material with personal information. The same issue can be a recurring topic for their daily huddles. The report should be reviewed with the vendor, allowing them the opportunity to respond. For example, they may want to provide essential information that the auditor didn’t receive during their visit. The original report can be updated with the vendor’s com-
ments and become a working document for future discussions. One of those future discussions should take place at the vendor’s facility. The operations manager can show how the recommended changes from the audit have been implemented on the production floor. The account manager can use the opportunity to explain any additional improvements they’ve made to improve compliance. Good vendors see audits not as a “gotcha,” but as an opportunity to improve their operation. Outsourcing is an important strategy in the customer communication process. Clients are still responsible for ensuring that mail pieces are processed in a manner that meets the ever-changing postal and industry regulations. Well-planned, executed, and shared audits improve compliance, service, and expectations — for clients and their service providers. Mark M. Fallon is President & CEO of The Berkshire Company, a consulting ﬁrm specializing in mail and document processing strategies. You can contact him at firstname.lastname@example.org, or visit his blogs at www.berkshire-company.com/the-berkshire-company-blog or www.markfallon.com/blog.
INNOVATION DESIGNED TO HELP YOU SEND SMARTER Tasked with spreading the Word through printed materials and other goods, the Greek Archdiocese of America’s Department of Religious Education is blessed with a tiny team of very devoted customer service reps (CSRs). As shipping volumes grew, and fulfillment was relocated more than 1,500 miles away, the Brookline, Massachusettsbased CSR team was at a loss: How could they continue to accommodate narrow delivery windows and a variety of cost constraints if they had no visibility into shipping times and costs? Though the answer may have not been heaven sent, it was definitely in the cloud. Business Challenge The archdiocese’s primary customers, church and parish schools and bookstores as well as various diocese centers and departments, are repeat customers who order in large volumes. A smaller, but growing, segment are individual customers, who order printed materials and gifts through the archdiocese’s online Orthodox Marketplace. Father Nick Mueller, a customer service rep (CSR) who also runs the website, says the primary segment is still the most demanding. “Our institutional customers are looking to save money on their shipping, and they want a clear answer about when they will receive shipments,” he
notes. “That visibility has been really important to those relationships.” Solution The department had already been using Pitney Bowes PC-based shipping software, and it had deployed that software at the Tulsa, Oklahoma fulfillment center, when Mueller heard about a new cloud-based solution called SendPro® Enterprise. “One of the reasons that SendPro Enterprise was attractive to us was that it would give us a lot more transparency,” Mueller says. Although the fulfillment center staff could select carriers and ship packages efficiently using the PC-based software, Mueller and the other CSRs couldn’t see the shipping system from Brookline to advise customers on delivery windows and shipping costs. If everyone used SendPro Enterprise, they could all see the same information in real time. Cost of ownership was also a consideration. As a cloud-based solution, SendPro Enterprise wouldn’t require any attention from Mueller or from the archdiocese’s IT staff, either for deployment or for software updates. The subscription model was attractive as well. “We had looked at Pitney Bowes’ on premise solution,” Mueller says, “but SendPro Enterprise had the features and capability we needed, and seemed a better fit for our non-profit organization.”
Benefits So far, the department has deployed SendPro Enterprise in Brookline, where the CSRs are already seeing how the solution can deliver benefits to their customers. Mueller says the ability to rate shop in SendPro Enterprise and get definite delivery times is particularly useful. “A lot of the offices at churches that we service are open for limited hours during the day; in other cases, especially during the holidays, we might get rush orders,” he explains. “The ability to pinpoint exactly when something is going to arrive and how much it’s going to cost is an incredible benefit. SendPro Enterprise takes a lot of the guesswork out of our job and gives full visibility of the cost.” Extra fees, such as address correction, can inflate shipping costs. To avoid these hidden costs, and to ensure that packages arrive at their intended destinations, Mueller and his team take advantage of built-in address correction in SendPro Enterprise. As carrier fee structures and the department’s shipping needs change over time, SendPro Enterprise analytics will help Mueller and his office manager see how to adjust their shipping choices to contain costs, which is always a central issue for non-profits. Another central issue for Mueller, who spearheaded the implementation of SendPro Enterprise, was reducing vendor complexity: “The flexibility to access both USPS and UPS, our two primary carriers, through a single cloud-based solution, helps us keep things streamlined as we grow.”
A LOOK AT THE TRANSFORMATION OF DIRECT MAIL TO TRANSACTIONAL COMMUNICATIONS By ByEd EdHorowitz Horowitz
These two methods may seem the same on the surface, but there are key differences of which you need to be aware.
hen internet advertising began to take off and the economy dipped, many direct marketing companies began to look for other ways to leverage their infrastructure as marketing budgets were cut. One of the apparently easy options was to enter the transactional mail space. These direct marketing companies compared their workflows, equipment, employees, suppliers, and USPS knowledge to those needed in transactional mailing, and many determined that the leap into transactional mail was not too great. However, as many of these companies have learned, although transactional mail looks like direct mail, processes like direct mail, and may quack like direct mailâ€Ś. it is not direct mail. Transactional mail has many of its own unique idiosyncrasies than are readily apparent from a cursory review of merely the print, insert, and mail workflow. Although there are many operational differences between transactional and direct mail, the following are the major ones to consider. PROJECT-BASED VS. FULFILLMENT Most direct mail jobs are project-based, meaning that they have a definite start and
end and are unique in their job requirements. Most transactional mail is an ongoing process (i.e. daily, weekly, monthly) and follows the same business rules and processes each time. Accordingly, while most direct mail data files are still handled manually through the data processing stages, transactional mail files are widely automated from file receipt to print queue. This automation requires not only more time and focus to set up, but also a system that can efficiently process files without any human intervention. MAIL PIECE INTEGRITY Ah, the perfect piece. Although high quality has always been a focus in direct mail, quality has usually been concentrated on the data side rather than the production side (i.e. print and mail). In fact, where 100% mail is a chargeable option in direct mail, it is inherent in the transactional mail process. Mail piece integrity is, simply put, ensuring the right document gets into the right envelope. Using the least complex and costly method, this is usually achieved by manual tracking of piece counts from print to insert stations and then piece count reconciliations after the job has been inserted. However, this does not ensure that all the documents in an envelope are correct.
in the standard print queue and follow the normal production process. DIRECT LABOR Due to the irregular production volume and schedules of direct mail, most direct marketing companies leverage temporary employees to optimize direct labor management and flexibility. Although temporary employees are perceived to have less loyalty and devotion to the employer due to the sheer nature of the temporary employment relationship, these employees have worked out well due to the quality tolerances understood in direct mail. However, due to the zero tolerance associated with transactional mail and the ongoing knowledge and understanding of repeatable work, temporary employees are usually not used, since having “skin in the game” is critical in achieving the high level of quality required. Obviously, having full-time operators introduces its own challenges as it relates to labor management during both slow times as well as very busy times.
Higher-level integrity is achieved by using barcodes on documents for accumulation and tracking, leveraging photocells disposed at periodic and/or critical locations to ensure that each document sheet/set is identified and tracked along the inserter feed path, and implementing a file audit process that electronically reconciles the insert job against the production file. As you may imagine, the mail piece integrity must be managed by an integrity platform designed appropriately for piece-level tracking. Mail piece integrity leads into the dreaded reprint process. Ideally, transactional mailers will adopt a touch-and-toss process whereby a piece is destroyed if any person handles any sheet within the envelope, thereby eliminating any chance of human error. The destruction of these pieces results in the reprinting of these documents to ensure 100% mailing. As the touch-and-toss process is adopted to eliminate human intervention, a reprint process that is managed off-line by an individual is counterintuitive to this initiative. As such, many transactional mailers develop an automated reprint process where the system can identify all pieces that were not successfully inserted and create a reprint file that would be staged
PRICING Most direct marketing jobs are priced on an à la carte basis. Pricing for transactional mail jobs is usually bundled as a core package that would include, for example, data processing and one simplex sheet with a reply envelope into a #10 envelope. Ancillary add-on pricing for additional pages, color, etc. would be separate. However, the most significant pricing difference relates to postage. In direct mail, postage costs are determined by each individual file after it is processed through presort software. In other words, the postage cost is driven by the individual file saturation. However, for most transactional work, postage cost per piece is established at a fixed rate… and guaranteed. The reason behind this is because presorting and tracking each individual transactional mail file is administratively burdensome; many transactional mail files lack volume and saturation to achieve postal discounts alone; and most transactional mailers leverage third-party presort services, which provide fixed piece pricing to the mailers. SERVICE LEVEL AGREEMENT In direct mail, we develop a schedule for our customers and require our customers to meet certain deadlines or risk their job being delayed. Usually, this schedule from
file receipt to mail drop spans anywhere from seven to 10 days. This allows us to plan and schedule… or reschedule. In transactional mail, most customers demand 24-hour turnaround and cannot provide volumes for any given day. This requires transactional mailers to be reactionary and able to maintain sufficient resources to complete any volume that may be thrown at them. Although some transactional mailers develop certain volume boundaries for medium and large customers, accurate real-time dashboard reporting of in-bound volume and job batching is critical for meeting transactional service level agreements (SLAs). WORKING CAPITAL REQUIREMENTS Historically, most direct marketing companies have required all postage deposits before any job is mailed. This has significantly eliminated or reduced the working capital requirements since the direct mailer does not have to front any postage for customers. On the other hand, postage deposits for transactional mail are an ever-evolving conundrum. Many transactional mailers require a 45-day postage deposit using the average postage to be used over that period. However, with days sales outstanding (DSOs) creeping up to 45 or 60 days after the actual invoice date, which is usually 10-15 days after month end, transactional mailers could effectively be fronting 45 or 60 days of postage for customers. Although the above differences may seem overwhelming, the current technology, software, and equipment in today’s market can provide solutions to all the above. More importantly, although direct marketing companies need to be cognizant of these challenges, they should consider themselves fortunate that they already have most of the key pieces and infrastructure needed to make the transition from direct mail to transactional mail… which is more than half the battle! ¾ Ed Horowitz is a CPA by trade and began his career with Price Waterhouse before entering the direct marketing industry as a finance/operations executive with Direct Group. After leaving Direct Group, he became the COO of PSC Info Group (which later became RevSpring), a leading transactional communications company specializing in Healthcare and ARM (collections). After the sale of PSC, Mr. Horowitz started Commogma, a consulting company that specializes in both the Direct Marketing and Transactional space. You can reach him at email@example.com. MailingSystemsTechnology.com | MAY-JUNE 2018
WHAT TO SEE AT 2018 NPF PRODUCT SPOTLIGHTS Mailing, Made Easy
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Whether you’re a small print shop or a print service provider processing thousands of mail jobs — Quadient® has the solution to meet your needs! From our simple but powerful Bulk Mailer® desktop software to our revolutionizing Ignite data processing solution or our Data Services — we can help you keep your customers informed and achieve customer experience excellence. 800.553.6477 firstname.lastname@example.org www.quadient.com
SAP® Data Services 4.2
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SAP® Data Services 4.2 is SAP’s premier Global Data Quality Management (DQM) and Data Integrator (DI) platform built on 30-years of proven address and data quality technology: • DATA PROFILING > Global Address & Data Quality • ADDRESS CLEANSE > CASS™, NCOALink® & DSF2® • DATA CLEANSE > Data Cleansing & Enhancement • MATCH > Data Matching & Deduplication • INTEGRATION > Extract, Transform & Load (ETL) Available as On-Premise software on Windows®, Linux®, Solaris® & AIX® platforms. Get Firstlogic’s new eBook on Address Quality at www.firstlogic.com 888.725.7800 www.firstlogic.com
OO 4 2 The Ultimate Mailing Solution 7 TH
Kirk-Rudy will be demonstrating variable data inkjet addressing and inline tabbing. The UltraJet v21 is their newest high-speed 2.12” piezo inkjet printing system that produces consistent 600 dpi quality at high speeds. Together inline with their famous KR545D Tabber, which applies tabs to 3 sides of a mail piece in one pass to meet the USPS regulations for self-mailers, you will see KirkRudy is the leader in production mailing equipment. 770.427.4203 email@example.com www.kirkrudy.com
Firstlogic® Data Quality 10
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Firstlogic® Data Quality (DQ) 10 is Firstlogic’s premier U.S. Data Quality platform built on 30-years of proven address and data quality technology: • FIRSTPREP™ > File Analysis & Preparation • ACE® > Address Correction CASS™, NCOALink® & DSF2® • DATARIGHT IQ® > Data Cleansing & Geocoding • MATCH/CONSOLIDATE® > Data Matching & Deduplication • PAF MANAGER™ > NCOALink® PAF Management Available as On-premise software and Workflow APIs on Windows®, Linux®, Solaris® & AIX® platforms. Get Firstlogic’s new eBook on Address Quality at www.firstlogic.com 888.725.7800 www.firstlogic.com
Looking for a game-changing solution?
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BCC Software offers the most comprehensive and flexible direct communications solutions that integrate anywhere along the workflow, from powerful presort software that will save you valuable time and money, to data services that ensure top-tier address quality and correctness, and automation solutions that will transform your organization. 800.337.0442 firstname.lastname@example.org https://bccsoftware.com
What Lies Ahead for Mailers?
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While no one can completely predict the future, we’d love to brainstorm with you about what the next few years may hold for the postal industry — and how you can capitalize on these innovations. Stop by Booth #212 to chat with us; we’d love to hear from you! MailingSystemsTechnology.com
Mailing Systems Technology May/June 2018