Mailing Systems Technology Nov/Dec 2013

NOVEMBER - DECEMBER 2013 www.MailingSystemsTechnology.com

Worried About Postage Rate Hikes?

Nine Things You Can Do To Relieve the Pain Page 12

What’s Your Incentive to Mail?

Page 16

The Most Critical

Phase for Full Service IMb, and How You Can Maximize the Savings Page 26

2014

IS ALMOST HERE… Which means rate increases, IMb deadlines, and more—oh my!

Volume 26 Issue 7

NOVEMBER - DECEMBER 2013

Features

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A Look Back at 2013 Part two of our annual survey looks at declining mail volumes, attitudes towards mail, and how the USPS fared in the eyes of mailers this past year.

By Amanda Armendariz

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In this day and age, almost every organization is hoping to cut back on costs. Here are some concrete ways to actually do so.

By Adam Lewenberg

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The Most Critical Phase for Full Service IMb You’ve figured out how to create the new barcode — now it’s time to maximize savings.

By Debbie Pfeiffer

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How Every Company Can Save Money on Mailing Equipment

Educating the Educators For everyone, the more educated your organization becomes, the easier it is to process the mail the way the USPS recommends and receive the discounts. This is especially true for those mailers in higher education.

By James Guza

Columns 6

Real-Life Management

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8

Software Byte Are You Ready to Submit?

By Christopher Lien

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Ship It Major e-Retailer Introduces “Thought Delivery”

By Jim LeRose

WATCH FOR IT! 4

12

In the Trenches Worried About Postage Rate Hikes?

Nine Things You Can Do To Relieve the Pain

By Mike Porter

Guest Column: IMb Updates Deadline for Full-Service IMb Barcodes Is Almost Here

By Harry Stephens

Direct Marketing 101 Direct Mail’s Appeal to the Millennial Generation

By John Foley, Jr.

Are You Connecting?

By Wes Friesen

14

My Two Cents Snookered Again!

By Todd Butler

16

Postal Affairs What’s Your Incentive to Mail?

By Kim Mauch

January/February: What you need to know about mailing operation software & services in order to help your organization succeed March: The 2014 SOLUTIONS Buyer’s Guide – before you buy, check out pages and pages of details and descriptions about the industry’s equipment, software, services and supplies.

This issue is one that is kept on readers’ desks as a reference guide all year long!

NOVEMBER - DECEMBER 2013 ¡ www.MailingSystemsTechnology.com

editor’s note

with Amanda Armendariz

Mailing systems technology PUBLISHER Marll Thiede

EDITOR Amanda Armendariz amanda.c@rbpub.com

Traditional Mail Is Ready for a Brand-New Year 2014 promises to be a big year for mailers. There are some moderate rate increases that budgets will have to absorb. Mail volumes are continuing to decline as more and more customers prefer electronic communications for bills and statements, which means that the USPS will struggle to make ends meet (although, to be fair, its balance sheet would be in decent shape if the pesky pre-funding requirement was removed). And, of course, there is the required Full-Service IMb implementation deadline of January 26, which is looming fast — and if mailers do not deploy Full-Service IMbs, they will lose their automation discounts, affecting dwindling budgets even more.

CONTRIBUTING WRITERS Todd Butler, John Foley, Jr., Wes Friesen, James Guza, Jim LeRose, Adam Lewenberg, Christopher Lien, Kim Mauch, Debbie Pfeiffer, Mike Porter, Harry Stephens

CIRCULATION

Rachel Spahr rachel@rbpub.com

ADVERTISING 608-442-5064 Ken Waddell ken.w@rbpub.com

GRAPHIC DESIGN

Yes, it will definitely be interesting to see how events in 2014 play out for mailers. But despite the doom and gloom that seems to pervade many conversations and articles about mail (and I admit, I’m not innocent, either), mail is still a viable communication strategy, and will be for years to come. In his Direct Marketing 101 column, John Foley, Jr. notes that the Millennial Generation — those young people who are seemingly glued to their smartphones — respond more strongly to direct mail than any other generation. That’s encouraging, right? In a world where people are constantly engaged with Facebook, Twitter, and other social media, it says something that mail is held in such esteem by even the most tech-savvy.

So it’s pretty safe to say that mail will be around for quite some time, in some form. And in the meantime, mailers will want to do what they can to maximize their mail’s efficiency while minimizing the effects on their bottom lines. So this, our last issue of 2013, is a can’t-miss. In it, you’ll find concrete ways to relieve the pain of rate hikes, save money on your mailing equipment, and maximize the discounts you get from utilizing the IMb. I hope you all have a wonderful holiday season, and here’s to an exciting — and mailfilled — 2014.

As always, thanks for reading Mailing Systems Technology.

Kelli Cooke

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

Volume 26, Issue 7 Subscriptions are free to qualified recipients: $20 per year to all others in the United States. Subscription rate for Canada or Mexico is $40 per year, and for elsewhere outside of the United States is $45. Back issue rate is $5. Send subscriptions to: Mailing Systems Technology, PO Box 259098, Madison WI 53725-9098; or call 608-241-8777; fax 608-241-8666; e-mail rbpub@rbpub.com or subscribe online at www.MailingSystemsTechnology.com.

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All material in this magazine is copyrighted ©2013 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 26, Issue 7] is published six times per year, (January/February, March Buyers Resource, March/April, May/June, September/October, November/December) by RB Publishing Inc., 2901 International Lane, Suite 100, Madison WI 53704-3128, 608-241-8777. Periodical postage paid at Madison WI and additional offices.

Postmaster: Send address changes to: Mailing Systems Technology PO Box 259098 Madison WI 53725-9098

Real Life Management Are You Connecting?

“The best way to lead people into the future is to connect with them deeply in the present.” James Kouzes and Barry Posner, leadership experts and authors of The Leadership Challenge Henry Kissinger said, “The task of the leader is to get his/her people from where they are to where they have not been.” How can we help our co-workers be successful here in the present — and to move with us towards a better future? A big key is for us as leaders to build strong connections with people.

start where both of you agree. And that means finding common ground.” There are lots of potential areas of common ground — ranging from personal interests to life experiences to values and beliefs. The key to finding common ground? Listening.

How can we build strong connections and earn trust so that we can effectively influence our people to be successful? Let me share 10 principles of connecting with people that I think can be helpful.

5. Be a Good Listener. Rachel Naomi Remen advises that, “The most basic and powerful way to connect to another person is to listen. Just listen. Perhaps the most important thing we ever give each other is our attention … A loving silence often has far more power to heal and to connect than the most well-intentioned words.” I like the practical advice from Dale Carnegie (author of the classic How to Win Friends and Influence People) who said, “You can make more friends in two weeks by becoming a good listener than you can in two years trying to get other people interested in you.”

Ten Principles to Connect with People Well 1. Commit to Connect. The starting place for developing stronger connections with people is to make a conscious choice to do so. Do you really want to connect better? If yes, commit to taking intentional steps to build deeper connections. The other principles will give you ideas to consider.

2. Develop a genuine care for people. We can only connect well with people when we value and care for them. We need to not take people for granted and let them know we care and appreciate them. Valerie Elster reminds us that “Expressing gratitude is a natural state of being and reminds us that we are all connected.”

Every person is important as Bill McCartney emphasizes when he said, “Anytime you devalue people, you question God’s creation of them.” Part of caring for people is to be honest, genuine and transparent. Let people see your heart of caring and compassion — and they will respond and feel closer to you.

One of my often used quotes is that “People don’t care how much you know until they know how much you care.”

3. Be proactive – initiate movement towards them. It’s tempting to sit back and let others try and connect with us.

But as leaders we need to be proactive and take the initiative. Management experts Tom Peters and Nancy Austin concluded that “The number one managerial productivity problem in America is, quite simply, managers are out of touch with their people and out of touch with customers.”

4. Look for common ground. Probably my favorite leadership expert is John Maxwell. I agree with John when he says, “Anytime you want to connect with another person, 6

NOVEMBER - DECEMBER 2013 ¡ www.MailingSystemsTechnology.com

6. Recognize and Respect Differences. While we should be looking to find common ground with others, we also need to acknowledge that we’re all different. Our differences and diversity make our lives more interesting, and can strengthen our team performance as we blend our diverse backgrounds and abilities together to make us stronger.

7. Share common experiences. To really connect well with others, we need to find a way to cement the relationship. Joseph Newton said, “People are lonely (disconnected) because they build walls instead of bridges.” To build bridges that connect you to people in a lasting way, share common experiences with them. Share meals. Go to a ball game or other events together. Take people to meetings with you. Participate on work projects together. Anything you experience together helps create a common history and build connection.

8. Get out of your office. Reality is that there are increasing expectations on managers to produce more results with the same or fewer resources — and that can drive us into our offices to get our personal work done. But we need to intentionally carve out times to practice MBWA (Management by Walking Around). I have to admit that I’m not as consistent in getting out of my office and touching base with people as I would like — how are you doing?

With Wes Friesen

9. Be a giver — provide help and share knowledge and resources. Commit to being a servant leader who gives of oneself to help meet the needs of others. We can give of our time, knowledge and resources to help people around us. Giving of ourselves is the ultimate win-win that benefits both the receiver and the giver. Winston Churchill said, “We make a living by what we get. We make a life by what we give.” Anne Frank reminds us that, “No one has ever become poor by giving.”

10. Once connected, move forward. There is value in building deeper connections with people just for relationship’s sake.

But there is even more value when we use our connections with people to add value to our team’s key stakeholders (investors, customers and employees) and drive towards a better future. Someone once said, “Leadership is cultivating in people today a future willingness on their part to follow you into something new for the sake of something great.”

Connection helps create that willingness.

Building deeper connections with people will enhance your influence and help you have a greater impact. How will you use your greater impact? I resonate with Jackie Robinson when he said, “A life isn’t significant except for its impact on other lives.” I wish you the best as you pursue deeper connections with people and add even more value to the lives of people around you! ¡ Wes Friesen, MBA, CMDSM, MDC, EMCM, CBA, ICP, CCM,CMA, CM, CFM, APP, PHR is the Manager of Billing, Credit and Special Attention Operations for Portland General Electric, a utility in Portland, Oregon that serves over 830,000 customers. Wes leads his teams with the able assistance of Supervisors Allison Rowden, Jessica Eberhardt, Heidi Fouts and Matt McHill. Wes teaches university classes and is a featured speaker at national Conferences like MAILCOM, National Postal Forum, NACUMS, FUSION and other regional and local events. Check out his personal website for free information (www.wesfriesen.com). He can be contacted at wes.friesen@pgn.com.

Software Byte

With Christopher Lien

Are You Ready to Submit?

Full Service Intelligent Mail barcode requirements are just around the corner. On January 26, 2014 the USPS will require unique Full Service Intelligent Mail barcodes on mailpieces, containers, and electronic documentation in order to qualify for automation discounts. Mailers that are not ready to comply with the requirements, as posted in the Federal Register Notice (http://pe.usps.com/FederalRegisterNotices.asp) could be facing a 20% increase in their current postage in 2014. The automation discounted postage prices they are enjoying today could be lost.

Are you ready to submit to Full Service IMb? Perhaps the more appropriately worded question is: Are you ready to submit your electronic documentation (known as eDoc) as part of Full Service IMb compliance? For many mailers the answer may be “Not yet” or worse — “I don’t know.” The solution, once again, begins with your software provider and, thankfully, continues with a more streamlined onboarding process from the USPS.

Once you have all of your MIDs, CRIDs, and IMb data strategies decided, the final step is deciding how you want to communicate electronically to the USPS via the PostalOne! site. There are three options to choose: Mail.dat, Mail.XML, and the Postage Statement Wizard. Each option has its advantages and keep in mind that Postage Statement Wizard is only available as an eDoc method for mailings less than 10,000 pieces.

The USPS PostalOne! system provides a new automated, streamlined alternative to the existing business mail acceptance process. This includes automated scheduling for drop ship appointments, improved mail induction, simplified mail acceptance, and electronic documentation and postage payment. PostalOne! is accessed through the USPS Business Customer Gateway (https://gateway.usps.com).

Mail.dat and Mail.XML are industry standards developed and maintained by IDEAlliance for communicating postal preparation and payment data. Of the two, Mail.dat has been available longer, is more mature, can support larger and more complex sortation scenarios, such as comailings, and is more widely available in the commercial software products. However, Mail.XML is gaining popularity as it can handle bidirectional messaging, and is similar in its structure to other XML-based messaging languages.

Your first use of the USPS Business Customer Gateway should begin with registering your Mailer ID (MID), as well as your own and your customer’s Customer Registration IDs (CRID). Every company that is either a mail owner, or a mailing service provider, will need to have a CRID assigned. The MID, on the other hand, is primarily used to identify the mailing agent (usually the mailing service provider) who is preparing and inducting the mail. The MID is what is encoded into the Full Service IMb, with the CRIDs being associated to it through the electronic documentation.

The final step in preparing to submit eDoc to PostalOne! is the Test Environment for Mailers (TEM). Up until September of 2013, the USPS had required all mailing service providers to submit test files (Mail.dat or Mail.XML) to TEM in order to validate that they are preparing the data correctly. Fortunately, the USPS changed its position on this requirement, and is now relying upon TEM certified software products to carry the responsibility of ensuring the data is prepared correctly. This greatly improves the onboarding process for mailers who are using TEM certified software solutions.

For many mailers who are still preparing for Full Service IMb, registering all of their customers with the USPS and having a CRID assigned is still a daunting task. Thankfully, the USPS is continuing to improve the process by allowing CRIDs to be assigned via an improved batch process. Mailers can export a customer list from their software and upload the information to the Business Customer Gateway to expedite assigning the CRID. To avoid validation errors and headaches during upload, please make sure that the information such as contact name and addresses uploaded are complete, correct, and current.

Are you ready to submit? If you have any doubt of your ability to submit a Full Service mailing please make sure you review the vast amount of information about Intelligent Mail posted on RIBBS web page (http://ribbs.usps.gov) and work with your software provider and the USPS to ensure compliance. January 26, 2014 is quickly approaching and the new year should not start with losing your automation rates. ¡

The relationship between MID and CRID is important and is one of the requirements by the USPS in January for mailings of 8

5,000 pieces or more. The USPS is requiring disclosure via eDoc of the By/For relationship in preparing the mailing. Simply put, the USPS wants to know BY whom was this mailing prepared and FOR whom is it benefiting? Unless you are the mail owner and preparing mailings for yourself, you will likely have two or more CRIDS involved here that need to be associated back to the MID used in the Full Service Intelligent Mail barcode.

NOVEMBER - DECEMBER 2013 ¡ www.MailingSystemsTechnology.com

Christopher Lien is Vice President, Software Marketing, Bell and Howell.

Guest Column

IMb Updates

With Harry Stephens

Deadline for Full-Service IMb Barcodes Is Almost Here The United States Postal Service (USPS) has been developing and phasing in the use of Intelligent Mail Barcodes (IMbs) for almost a decade now. As part of this long-term phase-in program, for the last two years mailers have been able to use either Basic level IMb or the more advanced and functional Full-Service IMb in order to qualify for discounted automation postage rates. However, now the time is near. As of January 26, 2014, mailers will have to deploy Full-Service IMbs or lose their automation rate discounts.

In terms of cost, using Basic IMb codes has qualified mailers for a discount of $1.00 per 10,000 items mailed. By comparison, FullService IMbs qualify for a discount of $3.00 per 10,000 items.

While this may not seem like a great deal of savings at first glance, for organizations that send out hundreds of thousands or even millions of statements and similar material every month, the savings — or losses — add up quickly. Yet, cost is only a part of the benefits that Full-Service IMbs can provide.

Accurate Delivery and Tracking Full-Service IMb codes are used on First-Class Mail postcards, letters and flats; Standard Mail letters and flats; Periodicals; and Bound Printed Matter. Full-Service IMb eliminates permit fees and can be used at any USPS bulk mail processing location. Additionally, Full-Service IMb deems every mailing piece unique, making it possible to track each item and enabling a wider range of services, including: } Automatic Address Correction. Even if an address is wrong or outdated. This feature helps you avoid losing money because of misdelivered documents. Address correction is important for companies that send mass mailings because each lost or delayed item means paying for undelivered mail, an unnecessary and costly expense. Moreover, mail not making it to the correct recipient results in delays on receiving payments from customers. } “Start-the-Clock” Processing. With “Start-the-Clock,” the clock starts ticking on “Day Zero,” the day the mail arrives at the USPS. When it is verified and accepted, the USPS scans the IMb barcode again. This tracking data gives business mailers greater visibility into their mail cycle for more effective monitoring of important correspondence. } Destination IMb Tracing and Origin IMb Tracing. These tools help businesses track both outbound mail and incoming replies.

The Destination IMb informs mailers in real-time when a document makes it to customers. Origin IMb performs a similar function, but on the return side — companies receive a notification as soon as the return mail is processed for delivery.

Together, these functions provide a way to coordinate multi-

channel programs and fulfillment, and to more effectively manage cash flow and accounts receivable.

Time Is Short While many mailers have already implemented at least Basic IMb coding, the deadline for the switch to Full-Service IMb is only months away, making it important that your system be tested well beforehand to ensure its error-free usability. The latest information for developing an in-house IMb mailing operation is available at the USPS National Customer Support Center (RIBBS) website at https://ribbs.usps.gov/. Numerous articles and booklets are offered free of charge for download in PDF format.

Mailers might also consider working with a third-party mail service provider. These business mailers should have Full-Service IMb already up and running, and can spare you the stress and expense of trying to do it all yourself. Whichever way your business goes, Full-Service IMb can help you reduce mailing costs and improve operations throughout your organization. With the continued rise in postage rates, paying attention to all the ways the USPS offers to save just makes good sense. ¡ Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. Find DATAMATX at www.datamatx.com.

product spotlight Print it! Label it! Mail It! Scratch-off!

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Call for samples!

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www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

9

Ship It

With Jim LeRose

Major e-Retailer Introduces “Thought Delivery” In ancient times, the Greek merchants set up agoras, and in Rome forums became the destination of choice for shoppers who came to buy whatever they needed. During the past century, this process evolved, and instead, people ventured out to shopping malls. The trek to brick and mortar shops required planning and in many cases, since local stores didn’t always have the exact item(s) that was desired, the trip often ended in futility or with consumers not getting exactly what they wanted — such a waste! Merchants imposed hefty markups too, while geographically restricted consumers were virtually powerless to do anything about it. To manage local inventory, retailers had to anticipate those items consumers would want to buy months in advance and with little data to support their decision. Consequently, outlet stores evolved to compensate for a plethora of miscalculations. Worsening the agony, parents of young children struggled tirelessly with car seats designed by engineers (who never actually used them) when the little ones wanted to tag along. Can you imagine? Oh the humanity!

Enter the 21st century; savvy shoppers buy almost anything online, comparing prices from thousands of e-retailers in minutes and getting their items delivered right to their home in a few days, all without ever venturing outdoors. Consumers can now get precisely what is wanted and at the lowest price without ever waiting in line. Many e-shoppers have become experts on the delivery schedules of the top three package carriers (UPS, FedEx and the USPS) to predict when an item will arrive in an attempt to pay the lowest shipping cost. Parcel carriers have now become mainstream and the savvy consumers’ new BFF. The latest news: Amazon, seeking to annihilate the competition (there are still a few left) and to offset current lengthy wait times of one or two days, is set to offer consumers same day delivery; shoppers placing orders in the a.m. will receive their orders delivered in the p.m. Amazing.

home delivery to your door in under five minutes (originally, the TWIT development team considered a chimney drop, but Santa Claus threatened legal action, putting the kibosh on that idea).

Here’s how it will work — a consumer mentally decides what they want and in less than five minutes the item simply appears at the front door (gift-wrapping or engraving will delay that three minutes!). TWIT will come installed on the quantum processor/ memory enhancement chip that’s implanted into all next-generation humans at birth. It will operate by using state of the art, nanotechnology to monitor the consumer’s thoughts and emotions so that the instant the consumer finalizes a decision, the order is then transmitted at 2.5 times the speed of light to a central computer system.

Once the order is received, it’s prioritized, and then filled by automated, fully indexed inventory kept in an invisible, strategic fleet of aircraft hovering endlessly above the Earth. This ensures that a shopper will never ever have to wait longer than five minutes for anything they want to buy, ever again. Environmentalists are ecstatic since these stealth-traveling warehouses never make noise, kill wildlife or require fossil fuels (they’re all used up anyway).

Since there is no such thing as privacy, governments and big data companies will collaborate to provide merchants the ability to know, with a high level of certainty, those items a consumer will want to buy, even before they do. That way when a consumer finally gets around to thinking about buying something, TWIT will enable that specific item, to be floating right overhead and delivered to their door in moments.

Providing thought delivery; a TWIT will change our lives forever.

Who’da thunk it? Now that’s what I call innovation.

Stay tuned to find out how to return items in the future … ¡

Today a consumer can notify FedEx to hold a delivery at a FedEx office if plans change and FedEx Delivery Manager with as little as a day’s notice offers consumers the ability to reroute shipments to a different shipping address than originally intended.

So what does the future hold?

It’s called Telepathic Web Internet Timetable (TWIT) and it will be here sooner than you might “think.” TWIT will eliminate all of today’s shopping conundrums including those laborious visits to websites, grueling shopping cart checkout processes and the pain of waiting so long for items to be delivered. TWIT will guarantee 10

NOVEMBER - DECEMBER 2013 ¡ www.MailingSystemsTechnology.com

Jim LeRose has been a transportation industry consultant for three decades. Formerly with Pitney Bowes, he is Principal of Agile New York, a leading provider of multi-carrier shipping software / shipping cost reduction strategies and CEO/Founder of EcoReturn — a revolutionary ecommerce return solution. Visit: www.agilenewyork.com and www.ecoreturn.com. Contact him at jim.lerose@agile-network.com or 888.214.1763.

Direct Marketing 101

With John Foley, Jr.

Direct Mail’s Appeal to the Millennial Generation Would you find it interesting to note that the Millennial Generation, also known as Generation Y, responds highest to direct mail among all demographics? Those born in the early 1980s to the early 2000s (depending on which definitions of the generation you go by) see direct mail as a more exclusive channel than any digital channel. This is powerful information for all marketing strategists. Ignoring it would be missing out on making some major marketing impact.

Yes, the Millennial Generation is quite tech savvy, but that also means they are bombarded with digital messages constantly. So reaching out in a more tangible way, via direct mail, these consumers feel the impact of the message more strongly. Less competition in the direct mail arena means more eyeball time when a Generation Y consumer receives your direct mail marketing piece.

advantage of the fact that the generation consists of technologically confident consumers who appreciate the personal touch that direct mail provides. ¡ John Foley is the founder of Grow Socially, an online marketing company including Social Media. They provide marketing consulting and delivery services. Created in 2010, Grow Socially, Inc (www.GrowSocially.com) helps companies with their online marketing efforts, with a focus on social media. These services include discussing and creating marketing plans, strategies, tactics, and goals that align with your company’s needs.

In addition to his role at Grow Socially, Mr. Foley serves a CEO for interlinkONE, an integrated multi-channel marketing web solutions company serving the print and fulfillment industries and marketing departments.

“It would be foolish to not court the Millennial Generation and take advantage of the fact that the generation consists of technologically confident consumers who appreciate the personal touch that direct mail provides.”

Of course, you can’t approach this generation in the traditional direct mailer way. A simple postcard with a simple offer may not be given much of a look. But tie that message in with other media and then you give these consumers a compelling reason to move forward. Short, persuasive copy, leading to a landing page (optimized for mobile, since much of the Millennial Generation uses their smartphones or tablets a large amount of the time) with video instructions or other short but clear details, are more likely to motivate a purchase versus superfluous verbiage.

You use personalized urls and QR codes. You provide calls to action that includes game downloads and videos. You encourage them to share information via various social media platforms.

You make it a physical communication that links to the virtual world that the Millennial Generation consumers know so well.

This younger generation is assumed to have limited attention spans. And perhaps that is true to a degree. But as consumers they make decisions and have tremendous purchasing power. It would be foolish to not court the Millennial Generation and take www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

11

The Trenches Worried About Postage Rate Hikes? Nine Things You Can Do to Relieve the Pain By the time you read this, we might know just what the USPS postage increases are going to be for 2014. One thing we can count on is that rates are going to be higher than they are today. But that doesn’t mean it is necessary to simply absorb the increase, pass it along to customers, or steal budget dollars from somewhere else to pay higher postage bills. And a rate hike for 2014 certainly should not be the sole reason for drastic measures such as severe cutbacks or abandoning use of the postal system as a key communications channel. There are alternatives.

Postage is just one component of the overall cost to communicate with customers, donors, members, or suppliers. Any tactic that lowers total communication expenses can offset postage rate increases. And postage really has little to do with the actual value of mailed communications. Thinking about mailpieces in context of value instead of expense completely changes the approach one might take when faced with a postage rate increase.

Instead of acting like a victim of higher rates that are being implemented in already challenging financial times, try taking a big-picture view of your organization’s goals as they relate to its relationship with its audience. What is it that your organization is trying to accomplish? Get customers to pay their bills? Generate more revenue from current customers? Find new customers?

Raise money for a cause or political campaign?

Regardless of your organization’s calling, there may be ways to improve the results generated by postal mail. If the net value of the mailpieces is high enough, the impact of postage increases loses its sting. The rates are the rates. Once scheduled and approved they aren’t going to change. It makes more sense to concentrate on those components of the communications workflow that mailers can control. Lowering costs and raising value are the areas for mailing professionals to invest their efforts.

But we don’t have the authority – blah, blah, blah Many readers of this column are mail operations people. They may feel powerless about changing the focus or methods of their companies when it comes to communication strategies.

I understand. I spent a good part of my career in exactly the same position. Decisions about what to mail, when to mail it, and how many pieces to mail are made by others in the organization. Those policies are not established down in the mail center. Nobody ever asks for opinions from document operations.

Their job is to get the mail out as cheaply as possible without messing it up.

12

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Lower the Cost of Mail 1. Eliminate non-productive records from address lists.

Deleting deceased, incarcerated, undeliverable addresses, duplicates, and inactive accounts lowers printing and material costs, raising ROI. 2. Lower page counts. Narrow the margins, reduce font sizes, eliminate blank pages, and insert relevant variable text instead of one-size-fits-all boilerplate. Printing fewer pages raises productivity in printing and inserting operations. Labor savings or reductions in equipment inventory are possible.

3. Change formats. Change flats to letters, and letters to postcards or self-mailers. Mail at lower rates, output more pieces per hour, and reduce material costs.

4. Combine mailings. Take advantage of the free second ounce (USPS First Class Automated Presort). Anytime rates go up, the benefit of turning two separate mailpieces into one actually improve!

5. Suppress return envelopes based on payment history.

Or convert to two-way envelopes. Save on materials, warehouse space, and promote environmental benefits.

Also makes room in the envelope for more pages or marketing materials.

Add Value to Mail 1. Sell advertising space to selected partners. Inserts, onserts, outside envelopes, and bangtails are possibilities.

The new ad revenue offsets production costs and postage.

2. Link to digital content. Use QR codes or PURL’s to add trackability.

3. Track mailpieces using the Intelligent Mail Barcode. Use the tracking data to trigger coordinated actions.

4. Add additional data sources to create documents that are highly personalized and targeted. These types of documents outperform the generic approach.

With Mike Porter

Because of this historical pattern of behavior in mail centers, inhouse and outside mail service providers are looked upon as little more than a cost center by those people who do make those upstream decisions about customer communications. These financial, marketing, executive, or business unit people may not be thinking about the relationship between mail and the mission of the organization either. They obviously do not have as much to lose should the company decide to migrate away from their reliance on the mail.

Unless the mailing professionals are willing to sit back and watch their budgets continue to shrink and their importance to the company erode, they need to take some action. The upcoming postage increase is a great opportunity to change perceptions about the value of mail. Educate the decision-makers in the organization (or the customers — for outsource service providers) about the advantages of physical mail over digital content. Cite studies that continue to prove that mail enjoys a high response rate and is a preferred channel for many types of communication. Show some creativity and find ways to lower expense and/or improve results using the mail. This is not a time for passivity.

It baffles me sometimes when I hear that document center and mail operations managers don’t want to reach out and communicate their ideas upward. What is there to lose? Even if all the ideas are shot down, at least people in various parts of the company will notice that an effort was made. If the organization eventually starts reducing the document operations workforce as a result of lowered volumes or outsourcing, being visible as someone who can generate ideas might be the difference between re-assignment and unemployment.

And if ideas presented by mailing professionals do get some attention, their entire departments could be saved. As an entity that has the capability to move the organization closer to its goals, document print and mail operations become valuable contributors instead of commodity-providers. ¡ Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent consulting firm that helps companies nationwide lower costs and integrate new technologies in their document production workflows. For more of his thoughts and ideas visit www.printmailconsultants.com and sign up for Practical Stuff – the free newsletter for document operations. Your questions on this topic are welcome. Send them to mporter@printmailconsultants.com. Follow PMCmike on Twitter.

www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

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My Two Cents Snookered Again!

I have been called rude, confrontational, hysterical, boorish, disrespectful, unprofessional, delusional, self-serving, and disingenuous by some in our industry. All because of my belief (based on past experiences) that our industry should take an aggressive and, if necessary, confrontational approach any time the Postal Service wanders beyond its limited statutory confines of delivering mail.

The Postmaster General in a March 7, 2013 meeting said that he (the USPS) would not compete with the direct mail industry. In July there was another meeting among industry people, postal associations, and the Postal Service. Many attendees were present for both meetings. The reason for the second meeting was to discuss small business adoption of the Full-Service IMB mandate and the Postal Service’s IMsB Tool (USPS produced software that qualifies mailings for Full-Service and the lowest postage rates).

The word from the industry was that this tool was not needed, as it directly competed with existing services and functionality already provided by the direct mail industry. In August attendees received a letter from the Deputy PMG and Ellis Burgoyne stating that they were going ahead with the development and marketing of the IMsB Tool. Obviously, passivity when dealing with postal bureaucrats is a losing strategy!

The law governing the Postal Service clearly states that the USPS is restricted to providing “postal services” which are defined as “the delivery of letters, printed matter, or mailable packages, including acceptance, collection, sorting, transportation, or other functions ancillary thereto.” The law also establishes two criteria under which the PRC can allow the USPS to provide non-delivery services. They are “the public need for the service,” and the ability of the private sector to meet “the public need for the service.”

In practice the USPS is only constrained by what our industry allows postal bureaucrats in Washington to get away with. The law is on our side; all we need to do is find leaders willing to aggressively defend our rights. The IMsB Tool is a piece of software for use by small, occasional mailers. Small is defined as less than 10,000 pieces per mailing, occasional is no more than 250,000 pieces per year. A mailing services provider (MSP) could add significant revenue to their bottom line by picking up a couple of these underserved (according to the USPS) “small mailers.” On the other hand, the MSP could go bankrupt if postal sales teams convince a couple of their customers to start preparing mailings in house using the IMsB Tool.

I’ve seen this movie before. It was called EDDM and the plot ended with postal sales teams using our customer

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information to convert our customers into direct postal customers. Can’t wait for the IMsB sequel!

The IMsB Tool uploads a mailing list to USPS servers, provides for address correction and duplicate elimination. It presorts the list down to the finest sort, prints tray and bag tags, and provides for the output of addresses on labels, envelopes, or in a mail merged document. It uploads the postal documentation to PostalOne! and prints an Electronic Confirmation Acceptance Notice (ECAN) to facilitate seamless acceptance into the mail stream.

The IMsB Tool qualifies the mailing for IMB full service (along with discounts), the lowest postage rates, and IMB tracing. Soon it will be providing NCOA processing. All of these software services are provided free to a restricted group of customers.

Well… nothing is free What the USPS means by free is that the people getting the benefit of the IMsB tool will not pay for its use. The rest of the industry (through postage increases) is paying for the development, implementation, hosting, maintenance, and extensive marketing costs for this software boondoggle. Implementation of the IMsB Tool demonstrates the hubris of the postal service, the fecklessness of many leaders in our associations, and the cowardliness of business leaders for not aggressively defending their markets and customers. At the time of this writing I know of no negative actions or public protests in response to the Postal Service’s letter dated August 23, 2013.

Of course, aggressively fighting for our rights and businesses is considered boorish and hysterical by many. But there is no question that this tool competes directly with software vendors. No question it competes with professional mail service providers who have been selling their postal expertise to the “small mailer” market since the inception of bulk mail. There is no question the USPS does not have the money to spend millions on the continued development and maintenance of the IMsB Tool. There is no question that this is an unauthorized, illegal move by the Postal Service into a non-deliver service.

What passive industry leaders seem to be missing is context The average size of most customer mailings is well under 10,000 pieces of mail per mailing. What if the Postal Service said that each permit could mail 250,000 pieces per year using the IMsB Tool? Owning two permits would allow you to mail 500,000

With Todd Butler

pieces, four permits one million pieces. Many mail service providers could save a significant amount of money by buying multiple permits, which currently have a onetime fee of $200. Jobs larger than 10,000 pieces could be split into multiple jobs or outsourced to another service provider.

As for our associations, if there were fewer customers due to postal competition there would be less revenue from which to pay association dues. This would lead to fewer members, fewer associations. With many associations more interested in keeping the channels of communication open than protecting my company from a loss in revenue, it’s inexplicable as to why I or anyone else would want to continue to be a member. I don’t need representation by a bunch of delusional sheep herders; I need representation by hungry wolves willing to protect my company from postal incursions.

You know…

I’ve moved to sitting on the fence on this issue. Maybe we should be pushing the USPS to enhance the functionality of the IMsB Tool and loosen its restrictions. BMEU’s would never question our paperwork or sortation accuracy. Would zero software costs make up for the loss of revenue from a couple customers that decided to go it alone? Maybe we should be encouraging the Postal Service to do even more.

You know what they say… if you can’t beat ‘em, join ‘em!

(How’s that for context?) ¡ Todd Butler, Butler Mailing Services, can be reached at 513.870.5060, toddb@butlermail.com or www.butlermail.com.

Postal Affairs What’s Your Incentive to Mail?

USPS is at an interesting crossroads for 2014. Labor and infrastructure costs have mostly stabilized, and the requirement to deliver to every mailbox, six days a week, won’t change anytime soon. With declining revenue, the USPS only has two choices to maintain its balance sheet: raise prices or increase volume. Unfortunately, these strategies are at odds and would be difficult to pursue in tandem.

Interestingly, USPS proposed both in its rate filings for 2014.

} Premium Advertising: send Standard Mail content using First-Class Mail preparation and service and receive a 15% discount off the First-Class price. This allows Standard mailers to test the response and service available from FirstClass mail without paying the full cost. Note that Standard Mail only preparations like Carrier Route mail and drop shipping will not apply to these mailings.

Raising Rates

} Mail and Digital Personalization: an upfront two percent discount on mailings that include personalized text and a personal URL (PURL) that links to a mobile website that also includes personalized information.

With the 2006 passage of the Postal Accountability and Enhancement Act (PAEA), USPS has full authority to raise rates once per year in line with the Consumer Price Increase (CPI). The CPI limit for this year is 1.6%, and USPS published a rate filing that is in line with this increase.

On top of the CPI filing, USPS posted an additional increase, reviving the 2010 exigency case. Under PAEA, USPS is authorized to request supplementary postage increases under “extraordinary or exceptional circumstances.” It claims that the 2008 recession and subsequent drop in mail volume qualify as “extraordinary or exceptional” to justify the proposed additional 4.3% postage increase.

If both rate filings are approved, mailers could pay an average of 5.9% more on postage in 2014 — a significant increase.

} Emerging Technology Featuring NFC: an upfront two percent discount on mailings that include standard Near Field Technology (NFC). Traditionally, this means including a small chip in the mailpiece, which can interface with an NFCenabled mobile device. } Color Print in First-Class Mail Transactions: an upfront two percent discount on First-Class mailings of statements or invoices that include marketing or consumer information in color directly on the bill or statement.

Encouraging New Mail Volume In the CPI price filing, the USPS included several promotion and incentive programs for the upcoming year. It has been experimenting with incentives over the past few years with promising results. 2014 introduces brand new incentives, and there are plans to extend some of the popular incentives for a longer period. After many conversations with mailers, USPS learned that mail is most valuable when it is effective. The incentives are structured to encourage mailers to use the mailpiece design practices USPS believes to be most effective.

The incentives proposed for 2014 include: } Branded Color Mobile Technology: an upfront two percent discount on mailings that contain a mobile barcode (like a QR code) that incorporates either both your brand and at least two colors (not including black, white or grey), or a digital watermark. The barcode must link to a mobile-formatted website. } Earned Value: similar to last year’s promotion, mailers can receive a two-cent credit for mail returned using Business Reply Mail (BRM) or Courtesy Reply Mail (CRM). Mailers who participated last year are eligible for an additional cent per piece.

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} Mail Drives Mobile Commerce: similar to the 2013 promotion, mailings that include a mobile barcode or print/ mobile technology to point to a mobile shopping website are eligible for a two percent discount. An additional one percent rebate is available for mailers who fulfill their orders using Priority Mail. } High Density and Saturation Incentive: a 5-20% rebate on Saturation, High Density and High Density Plus priced mail that is over 102% of 2013 mail volumes. } EDDM Coupons: the USPS sales organization will distribute $50 – 100 coupons to new small business mailers.

Mixed Signals There are a few things mailers can take away from these rate filings. On one hand, it’s clear that the Postal Service hasn’t righted its fiscal ship and is opening the door to charging customers more. The Postmaster General has said many times that he would only consider an exigent price increase if all other avenues were exhausted.

With Kim Mauch

On the other hand, the universal service obligation means that most mailboxes must be accessed six times per week at a substantial cost. Growing mail volume is the only way to balance the cost of each delivery point with incoming revenue. What’s unclear is how the incentives offered for 2014 will drive new mail volume. The Saturation Incentive and EDDM coupons cater specifically to new volume, while the others cater mainly to existing mailers who are willing to try new mail designs. Perhaps the most perplexing incentive is for Near Field Communication.

Since many popular phone designs, including the ubiquitous iPhone, do not support NFC, it’s unclear what value it brings to the mail at this time.

The Reality The fact is we mail not because of fancy mailpiece design, two percent discounts or even to tell Aunt Dora happy birthday any-

more. We mail because of regulation, customer preference and, mostly, because it works. In the world of overloaded email boxes and games on our smart phones, mail is one of the most effective advertising mediums available. When postage is already a third of the cost of a mailing campaign, an additional 5.9% will affect mail volumes. Combining that with the upcoming FullService mandate, USPS may find it difficult to recover from the loss in volume. ¡ Kim Mauch is a subject matter expert in mailing preparation and submission at Satori Software. Contact her at kmauch@satorisoftware.com.

A Look Back at 2013 Part two of our annual survey looks at declining mail volumes, attitudes towards mail, and how the USPS fared in the eyes of mailers this past year.

by Amanda Armendariz

We at Mailing Systems Technology would like to say a huge thank you to everyone who participated in our survey. Your input helps us understand what issues are important to mailers, how those opinions are shaping industry trends, and more.

It’s always interesting to look back over past surveys as I put the current one together, to see what viewpoints stay fairly steady and which ones change over time. I hope you enjoy reading this survey as much as I enjoyed analyzing it. And if you’d like, feel free to scan the QR code below to leave your thoughts on these survey results. Until next year!

THE USPS How would you characterize the service levels of the USPS? 11.4%

10.2%

Excellent Good

27.6%

Fair Poor 50.8%

The USPS’ Financial Problems: Who Is to Blame?

The government certainly didn’t improve its public image any with the shutdown this fall, and it would appear the public’s dislike of our elected officials extends to their handling of the USPS, as well. Last year, 58% of people said that the USPS financial troubles were the fault of both Congress and the Postal Service. This year, that number dropped to 47%, while the number of people who solely blamed Congress jumped from 22% to 37%--a huge leap!

What could be done to improve the USPS’s financial viability? Some ideas from our readers: A full 50% of our respondents rated the USPS as good (slightly up from 47% last year)--not a bad score for the much-maligned Postal Service.

Of course, that’s not to say the USPS doesn’t have problems.

Consider the top three problems listed by our respondents: 1. Regulations confusing or burdensome (27%) 2. Inconsistency (16%) 3. Communication/information (9%) Inconsistency didn’t make the top three last year, but with a sizeable 16% of people complaining about it this time, that is perhaps something the USPS would want to keep an eye on. Interestingly enough, rates/pricing were listed as one of the biggest problems last year but didn’t fall into the top three this year. Perhaps folks believe what so many have been saying: that the services the USPS offers for the prices it charges really are a great deal?

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} Eliminate the pre-funding requirements. } Collect better measurements and use data for staffing purposes. Decrease pay when mail numbers decrease and also decrease staffing. Look at different retirement benefits for future retirees. } Let them act as a private company, and let other companies compete. } Buy out some internet companies, provide internet and e-mail services. } Better marketing for using USPS services. Stop changing all of the USPS shipping rules because it gets confusing.

Stop Saturday deliveries (they are a waste). } Raise postage up to a level that puts them in black not red.

Should the USPS be a for-profit enterprise operating under standard corporate law?

YES 59.2%

Are you encouraged by the USPS’s growth in the parcel delivery market, in terms of that success alleviating some of the financial distress?

NO 40.8% 34.6%

Yes No 65.4%

Do you think the pre-funding requirement, which states that the USPS must pre-fund its retiree benefits and is considered a major contributing factor to the USPS’s financial problems, will be lifted sometime in the near future?

64%

The requirement will be lifted sometime soon; the USPS can’t survive with this requirement in place

36%

The USPS is stuck with the requirement and will have to find another way to be financially viable

Speaking of parcels, do you think the USPS will eventually be seen as a player equal to FedEx and UPS?

Yes

40.7%

No

59.3%

Should the USPS be able to raise its rates without approval from the Postal Regulatory Commission, if that meant it would ensure the financial stability of the USPS?

YES 39.6%

NO 60.4%

Why or why not?

Some responses from our readers: } They have terrible customer service. You try calling them about a package. I would never ship with them.

In late September, the USPS announced its new prices for 2014. FirstClass Mail single-piece letters will increase by three cents to $.49 and letters to all international destinations will be $1.15. In the face of the financial difficulties experienced by the USPS, do you think this increase is going to help the Postal Service’s bottom line, or is the increase not enough to make a difference?

36%

64%

Yes, it will help; any increase will.

No, it’s not enough to make a dent.

} Because of the system the USPS uses it cannot compete with UPS. It would have to look at an entirely different logistic system. } The USPS employees have no reason to perform at 100%... They are paid no matter how BAD they perform. } Not as long as they cannot compete as a private company. } USPS does not provide the same guarantees of delivery and tracking accuracy. I am not sure that USPS should try to provide the same levels of service that FedEx and UPS provide. USPS may be better to fill the need of affordable parcel delivery without the extras provided

by UPS and FedEx. } Their delivery is as reliable, trackable, and ontime as FedEx and UPS and the packages arrive in better condition for less money. www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

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Mail Operations The biggest challenges in running your mail facility: Compliance with Postal Regulations Budget/Financial Issues

Have you personally noticed a decline in outgoing mail within your own organization?

Yes; our mail volumes are darastically down

29%

Timely Delivery of Mail

How important is it to your company to undertake environmentally friendly initiatives?

Yes, but it’s not as bad as the media makes it out to be.

43%

No, mail volumes are pretty steady and we haven’t noticed much of a change.

28%

17.4% Very important

35.4%

Somewhat important Not at all important 47.2%

What best describes your attitude about electronic communications?

2.6% 7.9%

We’ve all heard a lot about declining mail volumes; what is your position on that?

20%

66%

14%

58.6%

I’m not worried at all; mail will always be around.

I’m kind of worried; I think mail will always be around in some format, but we’re going to have to make changes.

I’m very worried; I could see mail almost completely disappearing in the foreseeable future--and our jobs along with it

Thoughts on this survey? Let us know how your opinions line up with those of your peers!

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30.9%

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I embrace electronic communications as a complement to mail and have taken responsibility to assist with/manage them I embrace electronic communications but haven’t done anything within my company to assist with or manage them I am against e-communications because I am fearful there will not be a job for me in the future I am against e-communications because I personally prefer information in hard-copy format

Survey respondents were asked: “In your opinion, what is the best way to merge hard-copy and electronic forms of communication, so that mailers can take advantage of the many benefits electronic communication offers, while still preserving the value of traditional mail (which also has a host of benefits)?”

} Near field communication; QR codes, and any method to link a cell phone to direct mail is going to be a major benefit going forward. The USPS could learn something from the Googles of the world and give away software to vendors and consumers that allows them to auto configure these type of opportunities and makes mail relevant again. } You can’t merge the two. You will have to market benefit of hard copy use.

Here are their answers: } They are two separate things. We use the internet to move files, but 99% of internet advertising is smoke and mirrors. Everyone just deletes internet advertising CRAP. } Figure out a way for the USPS to accept business e-mail and provide certified mail options. This would help business, lawyers, and individuals. } Use direct mail to drive customers to websites or have customers go to websites to receive coupon in the mail. } They should be personally relevant and augment one another. Mail is the key with electronic as the enhancement. Mail keeps it from being lost amongst all the electronic clutter. } I see it as either a hard-copy world or an electronic world. Older generation wants hard-copy, while upcoming generations want electronic. As hard-copy generation dies out, so will that industry. It will be some time, if any, that it will come back around in history. } At the moment, PURLS, GURLS and QRCodes are the best way to merge the two.

How has the economy affected purchases of equipment and software for the mail center?

30% 26.9% 20%

23.8% 21.3%

23.1%

10% 5.0%

No effect Freeze on purchasing all or most products Freeze on purchasing some products Allowed purchases that would decrease operating costs Other

If the economy has had a negative effect on purchases, when do you anticipate your company will be able to make purchases again?

15%

Yet this year First quarter 2014

18% 17%

Second quarter 2014 Third quarter 2014

12%

Fourth quarter 2014 2015

7% 31%

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HOW EVERY COMPANY CAN SAVE MONEY ON MAILING EQUIPMENT In this day and age, almost every organization is hoping to cut back on costs. Here are some concrete ways to actually do so.

by Adam Lewenberg

In the May-June issue of Mailing Systems Technology, I wrote an article titled the “Top 10 Items to Consider when Selecting a Mailing System,” which focused on what type of system is right for your mailing needs. The goal of today’s article is to give you ways to reduce the cost on whatever mailing system you should decide.

Contracting (New Equipment and Renewals) Here are the main items to look at to reduce the cost of the mailing equipment. } Pay attention to end of lease dates — The majority of mailing systems in the US are leased on three to five year agreements. On most lease bills that we see, it does not disclose the end of lease date so request this information from your vendor. This is important for the following reasons: } Evergreen Clauses — If you do not renew by a specific time, you may be stuck in an agreement that automatically extends.

It is a good idea to read through the terms and conditions of any past and new leases to make sure this is not included and you understand important action dates. } Remaining Balances — If you are being quoted to renew the equipment and it is not at the end of the lease, remaining balances from the past agreement may be included, increasing the price. } Do not auto renew — Some vendors may try to get you to extend your lease for an additional one-to-five years for the same piece of equipment. This option may come up as much as 12 months prior to the end of the current lease. The questions are, will this equipment still work well after it has been at your site for five to 10 years, and will it still best suit your needs? If this is an option you are considering, compare to the pricing for new equipment to see which offers the best value. } Buy the right sizes — We see many companies staying at the same levels of equipment that they had four years ago even though their mail volume has decreased dramatically. You can refer to the article we wrote in the May-June issue to select a system that best fits your current needs (scan the QR code at the bottom of this article for a direct link, or just go to http://tiny.cc/selectingamailingsystem). } Compare pricing with at least two vendors — There are a few vendors in the postage meter space to consider. Pitney Bowes, Neopost, Hasler (owned by Neopost and sells the same or similar equipment under a different badge), FP, and Data-Pac. Make sure they are comparing apples to apples systems based on speed, tape mechanisms, scale sizes, internal scales, accounting, additional printing capabilities or other features that may be important to you.

If you are thinking about switching vendors, get some references that you can speak to on their service response times in your area. } Question every line item on the agreement — Typically you will get a lease document with multiple items being included under one master payment. It is difficult for the novice to understand what is included vs. a chargeable item that has been added to the cost. When we go through these agreements with our clients, we frequently find items they were not aware are optional. By understanding what you are getting, you are able to only pay for what you need.

each of the below items is included in the payment being offered and if it is not, understand the cost for each.

} } } } }

Maintenance Coverage Rate Change Protection Meter Rental Postage Refills — The cost to put money into your meter.

Postage Advances — Many of the vendors will advance you postage funds instead of needing the money upfront. Find out if this is included with the agreement or if it is an additional fee per advance.

Billing We have seen clients paying tens of thousands of dollars in mailing fees because they do not understand what they are paying for. It is not the fault of the vendor because they break out these charges in their terms and conditions, but the issue is, who reads them? Here are strategies you can use that will reduce or eliminate these avoidable fees. } Pay your bills on time to avoid up to 20% in fees! — This sounds obvious, but many entities cannot turn around an invoice at the payable terms required by the mailing vendors. Then late fees and finance charges creep in. These fees can be over 20% (annual rate) of the cost of the postage borrowed. Also, late fees on leases are typically based on the value of the equipment and payment. Strategies that can help are consolidating multiple sites onto one invoice or paying bills online through the vendor’s website. Also, some equipment and postage can be paid with a credit card. } Get rid of vendor provided damage/loss protection — Because the equipment is leased and owned by the leasing company, the vendor will ask that you provide proof of insurance for your facilities and office equipment. If this is not provided, they will automatically add their own protection coverage for a fee. This can be eliminated at any time by providing them a copy of your insurance certificate, which we find is easy for most organizations to supply. } Know your account numbers — Again this sounds obvious, but it is very difficult for mailing equipment because every site will have three to five different account numbers. Each account could be on a different type of invoice without reference to the others. These are the account numbers you should keep track of to understand what you are paying for: } Installation Account Number — This is the main account number for your office and should be referenced for any service call, as well as any non-leased equipment and supply invoice. } Lease Number – This is for the lease of the equipment only. } Postage Account (Prepaid Funds) — This number is where you send money ahead of time to prefund your postage account. } Postage Account (Advance Funds) — This number is for funds you have borrowed from the vendor. Other items like supplies and meter rentals may be billed on this account as well. } Billing Account — If you have multiple locations, they may put each of the items above on a separate billing account number.

Purchasing Supplies Supplies are the easy ones for you to manage with only a few rules.

} Make sure new agreements are all-inclusive — There are many items that need to be paid for with mailing equipment and most organizations want everything included in one price. Validate that 24

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} Buy in bulk — Most vendors will give you published discounts if you buy multiple ink cartridges and meter tapes.

} Check third party non OEM (original equipment manufacturer) — There are many companies out there offering non mailing vendor based supplies that may be a consideration. The major office supply stores are also carry this ink for low end meters. Find out from your manufacturer if there is any binding agreement where you are required to use their supplies. } Ask for discounts — If you have multiple sites or are buying large amounts of supplies, ask if you are eligible for any additional discounts. It never hurts to ask!

Postage Funding It used to be a requirement that you had to have money on hand with the USPS prior to downloading it into your meter. Today many vendors give you the option to advance these funds. Here are some items to consider making sure you are maximizing your postage programs. } Prefund vs. Advances — The main questions are: can you pay the invoices by the time required by the vendor, and what is the fee to do the advance? If you can meet their time frames and they are not charging for the advances, this is the easiest method and you get a float of money that you can pay back after use. In all other situations you need to look at the pros and cons vs. prefunding the account. } Manage your balances to avoid fees — If you are late on payments, exceed your credit limits or let accounts sit idle for too long there could be fees and finance charges. This can be avoided if you manage the balances in your accounts. } Cash in any loyalty points — Pitney Bowes has a really good program where they give you points for the activity you do on their advance account. These points can be cashed in for free postage and supplies or other non-mailing offers. Check to see how many points you have to see if you are entitled to any of their rewards. } Manage closed accounts – We have found tens of thousands of dollars for our clients in closed meter accounts that had been long forgotten. When offices close and meters are returned, it is a good idea to validate that the money from the meter and what was sitting in the meter account got returned properly.

Conclusion As you can see, there are many areas where you may be able to reduce your mailing equipment costs by better understanding what you are buying and how you are paying your bills and funding your postage accounts. The key is to know your needs, agreements and terms.

Adam Lewenberg, CMDSS, MDC, is President of Postal Advocate Inc. and runs the largest Mail Audit and Recovery firm in the United States. Their mission is to help entities with large numbers of locations reduce mail related expenses, recover lost postage funds, and simplify visibility and oversight. He can be reached at 617.372.6853 or adam.lewenberg@postaladvocate.com.

Scan here to read the article referenced from the May/June issue. www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

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The Most Critical Phase for Full Service IMb Organizations have been talking about the Intelligent Mail barcode (IMb) for over five years. Now, with the Full Service implementation deadline just weeks away, many mailers are simply ready to move on. But you can’t slow down now.

When it comes to the Full Service IMb program, consistent and reliable execution is everything. Organizations interested in saving as much money as possible will use the next month to help ensure they are prepared not only for January 26, 2014 — but also for the additional requirements that will follow in the months ahead. The three words to keep top of mind every day are compliance, verification and adaptability.

Today: Earn Up-Front Discounts Effective January 26, 2014, all First-Class Mail, Standard Mail, and Periodicals, including incoming reply envelopes, must conform to the Full Service Intelligent Mail barcode requirements in order to earn automation rate discounts. Not conforming could cost you more than seven cents per piece — and potentially even more with the next USPS price increase —so compliance is critical.

By Debbie Pfeiffer

Of course, Full Service IMb compliance is much more than appending a unique barcode to your letters and flats. There are new barcode requirements for sacks, trays and pallets — and mailers must be able to track which envelopes are in each. In addition, electronic submission of postal statements and online scheduling for drop ship appointments are required.

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You’ve figured out how to create the new barcode – now it’s time to maximize savings

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While some organizations have already implemented these new requirements, many mailers are still not ready and are at risk of losing significant postage discounts.

If you’re not sure where you stand, investigate the long-term compliance requirements — the programming, dedicated IT and administrative resources that allow you to update and manage the program for the long haul. If you don’t have everything in place, it’s not too late to get the help you need to achieve compliance ahead of the upcoming deadline.

While some organizations use third-party presort service providers for the myriad of activities associated with the IMb program, and others will tackle everything in-house, perhaps the best solution is a mix of both in-sourcing and outsourcing. This strategy allows you to maximize the investments your organization has made in IMb technologies, while leveraging third-party processes and logistics to optimize postage savings and improve delivery.

There are other areas as well where you may choose to rely on outside expertise: } Database management (generating IMb data, postal coding and move update processing) } Physical mail production (actual barcode printing) } Mail preparation (generating and applying sack, tray and container labels) } Mail presentment (eDocs electronic documentation filing) } USPS feedback (Start-the-Clock, ACS data, quality reports, etc.) } Customer intelligence (Analyzing and incorporating this data into day-to-day processes) If your organization is struggling with compliance or looking to take advantage of IMb data, it may make sense to work with a third-party provider that can help provide the necessary expertise, technologies and workflows in time for a January rollout.

Next Six Months: Avoiding Assessments After your mail is inducted, you may still end up paying more than expected. That’s because the USPS will audit your mailing to validate that discounts taken were actually earned.

} Barcodes on mailpieces, containers and trays are unique across all mailings by class submitted for the past 45 days Starting July 27, 2014, the assessment phase will become automated as the USPS introduces Full Service Postage Adjustments. The USPS will automate postage assessments and issue invoices for any mail preparation errors, reviewing eDoc submissions across an entire month (not just individual mailings). Postage adjustments will occur if a particular error is over the established threshold. These postage adjustments will be calculated by multiplying the number of pieces in error over the threshold times the difference between the “postage affixed” rate and the “presort rate.”

To assist you in self-auditing prior to induction, the USPS has created a “Mailer Scorecard.” This scorecard provides a dashboard view summarizing performance. It allows for comparison across facilities, a view of trends across months, and drill-down reports that provide you with an easy way to pinpoint and investigate specific mail preparation errors.

While the USPS will not be using this scorecard to determine postage adjustments until July, smart mailers will begin monitoring and managing to this report right out of the gate. Identifying issues and taking corrective action now will help minimize costly postage upcharges later.

Long-Term: Stay Flexible Above all, mailers need to remember that the Full Service Intelligent Mail barcode rollout is part of a long-term postal initiative toward a fully automated mail verification and acceptance process.

Ongoing regular software updates and new programs initiated by the USPS will require dedicated resources to help ensure that all systems remain online and compliant. Some of the upcoming USPS enhancements will include Electronic Induction and Seamless Acceptance. } Electronic Induction is designed to streamline the induction of drop shipments and expedited plant load mailings. With this approach, scanning devices will validate that containers are fully paid for and inducted at the correct facility. While already available, this is not yet required. However, mailers should take the time now to learn what this involves and what process and/or systems changes may be required.

Once you produce mailings under the IMb program and submit mailings using the USPS eDoc system, the USPS can monitor and audit your mail against a host of factors; validating that you’ve submitted accurate documentation and that IMb barcodes are properly applied to sacks, trays and pallets. What’s new about the IMb verification, however, is that because your postal paperwork is filed electronically — and because each mailpiece can be electronically tracked as it moves through the USPS logistics and processing network — the USPS is in position to be far more effective in identifying instances where a mailpiece is out of compliance.

} Seamless Acceptance will close the loop, with mail entry and payment technologies providing for an end-to-end mailing validation process. The USPS will be able to collect sample data using handheld devices at the point of induction and piece data from USPS Mail Processing Equipment. This scan data will be compared to electronic documentation to create trending reports for mailer discussion and eventual postage adjustments.

Within 48 hours after the eDoc is processed, the USPS will audit every container, handling unit and piece in electronic documentation and evaluate for specific errors. Whether you are handling mail in-house or relying on third-party services, it is more critical than ever to help ensure that you have internal quality controls in place to review, verify and validate mail protocols prior to induction.

In short, while we’ve all been discussing the Full Service requirements for years, the upcoming implementation deadline should be viewed more as a starting point than an endpoint. Organizations need to be diligent in verifying that current and future requirements are implemented with precision, and to identify resources to complement in-house capabilities as needed. Those who plan well will be able to maximize postal savings and unlock the value of the Intelligent Mail barcode today and in the years ahead.

The first steps to help ensure you are on your way to compliance are: } Mailer ID is valid and registered with the USPS } Service Type ID is valid and appropriate for the class of mail and service level } Mail Owner and Mail Preparer are provided for each mailpiece

Debbie Pfeiffer is President, Pitney Bowes Presort Services.

Intelligent Mail barcode, IMb, First-Class Mail, Standard Mail, USPS and ACS are trademarks owned by the United States Postal Service. www.MailingSystemsTechnology.com ¡ NOVEMBER - DECEMBER 2013

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BY JAMES GUZA

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NOVEMBER - DECEMBER 2013 ยก www.MailingSystemsTechnology.com

Educating THE EDUCATORS

For everyone, the more educated your organization becomes, the easier it is to process the US mail the way the USPS recommends and receive the discounts. This is especially true for those mailers in higher education.

W

henever you take over managing a mail center, one of the first things you do is take stock of the people, processes, and equipment. It is important to review the roles people fulfill while taking care of your organization’s mail and the equipment they use to do their jobs. You should ask yourself a series of questions about the processes in place, the employees job duties, and what type of equipment you have to see if changes are needed and when you need to make them. Do I need a new meter? Do I need a new inserter? What is the process for presorting my mail? All very important questions, but there is one more question you have to ask yourself, and it is one that touches everything you and your staff do: Are my customers well educated about mail?

Knowing the leadership structure can make it easier to reach your customers. Every organization’s physical setting is different.

Leadership may all be in one location, or they may be spread across many buildings. Either way, you should take the time to meet with departmental leadership. Email can be an efficient way to communicate, but meeting face-to-face is more effective.

Understanding the leadership of your organization is important in order to make changes to a department’s mail system and you have to know who to talk to accomplish those goals. Getting in front of one or two key people in the leadership group could result in sweeping changes for the entire organization.

Do you want that accounting report folded in half to save postage? Maybe instead you just want to put a rule in place that ALL flats for your organization should be folded in half? In that case you should probably skip the Accounting VP and head on over to the EVP – Executive Vice President of Finance. Over the years despite the advances in communication, face-to-face meetings are still the preferred method of making change happen. When I entered into the world of higher education mail services armed with that knowledge, one thing became very clear, very quickly.

The traditional route of making change happen by getting in front of a few key people all conveniently located in one space can be thrown out the window.

Each school or college at the university is their own kingdom and there are over 650 departments at the University of Texas at Austin. We travel to over 100 buildings to deliver mail and make 30

NOVEMBER - DECEMBER 2013 ¡ www.MailingSystemsTechnology.com

trips to off-campus buildings as well. That’s a lot of face-to-face meetings. On my first day of the job here, my boss pulled me into his office and said, “You can’t give enough presentations or get in front of too many campus groups.” He warned me to never stop talking to the customers. Since then I’ve given more presentations and had more face to face meetings here at the University of Texas at Austin than I have ever done in my career.

My first foray was the Town Hall Meeting, which is taped and delivered so that all operations employees have access to what was presented. I also went on each Mail Services driver’s route.

I went to the HR Forum held for all HR representatives in each department. That was also taped and made available to others.

I went before the Building Manager’s meeting and the Security Meeting held at the university’s Police Department. I’ve presented to Business Managers and Administrative Assistants. I sat in meetings with ITS folks and Executive Assistants. This year I came up with a plan I “borrowed” from FDR entitled fire side chats. Departments turn in a form that tells me when they would like to meet and what they would like to discuss. I put those in every mail slot on campus and to date have been to 10.

My boss calls department heads and asks if they would be interested in having the Mail Service Manager come speak to their department. All things considered, I believe I have probably spoken to about 15% of a campus made up of 20,000 employees and 52,000 students.

There is no such thing as one or two meetings and then sweeping changes at a large university. And changes that are made and communicated to the campus are not done in one e-mail or one face to face meeting. Ironically educating the educators is a much taller task than educating the business world. Here at the Document Solutions Department we have a webpage, a Facebook page and a nice glossy “Helpful Mailing Tips” brochure, one of many brochures we hand out. We hand those out at our “Mail 101” classes we hold twice a year as well as the “Mail Center Security” classes as well. All of that is geared toward educating the campus on best mail practices.

There is a pay-off. The more educated your customers become the easier it is to process the US mail the way the USPS recommends and to receive discounts for doing that. Educating the customers at the university level is a bit more complex than in the corporate world. You may educate one college on best practices in mailing but that does not mean every college will follow suit. In addition there are faculty groups, athletic groups, alumni groups, and operational groups each with their own hierarchy.

You may never control envelope purchasing like you can at the corporate office setting, but you can educate the designers to leave the barcode area clear when placing the Longhorn logo onto the envelope. You will just have to educate one designer at a time because there are multiple designers employed on campus.

Educating your customers simply replaces other duties at the top of your to-do list when working at a university or college. For me it has become one of the most important things I do here. The more presentations I make and the more groups I speak to the more educated the university becomes in regards to mailing best practices. For us that has resulted in a busier Bulk Mail Unit and more postage savings for the departments, groups, and colleges at the University of Texas at Austin.

Jim Guza is Mail Services Manager at the University of Texas at Austin.