Mailing Systems Technology Nov/Dec 2015 by MadMen3

NOVEMBER - DECEMBER 2015 www.MailingSystemsTechnology.com

PART TWO OF OUR ANNUAL SURVEY RESULTS: OPINIONS ON ALL THINGS MAIL. PAGE 16

HOW “B2ME” IS RE-SHAPING OUR WORLD. PAGE 20

WHAT’S AHEAD FOR THE

MAILING INDUSTRY IN 2016? PAGE 22

CHOOSING THE SOFTWARE THAT IS RIGHT FOR YOU. PAGE 28

At this special time of year, we would like to take a moment to thank all of our customers and friends for making 2015 a great year for our company. Wishing you and your family a Merry Christmas and a Happy New Year! Your friends at Firstlogic Solutions. Firstlogic Solutions

速

TABLE OF CONTENTS

NOVEMBER - DECEMBER 2015 | VOLUME 28 ISSUE 7

FEATURES

DEPARTMENTS/COLUMNS

SURVEY SAYS….

Have you heard of Augmented Reality (which is, as the USPS states, “a technology that enables mobile devices to superimpose related, digital content on top of a real-world view.... It essentially adds a digital layer of information on top of real world images”)?

But not all is rosy. At the National Postal Forum, the USPS was incredibly proud of their Augmented Reality on mailpieces, and

44.16% 37.66%

was pushing it accordingly. But our survey responses show that only 10% of folks would definitively push for the use of AR on mailpieces; the other 90% say that they would not, or they are not sure. So it appears that there is, in some sense, a disconnect between what technologies the USPS is developing, and what the mailing industry would actually use. But overall, I think this year’s survey results are some of the best we’ve seen in a long time. If you have any thoughts on these results, please email me at Amanda.c@rbpub.com or connect with us on Twitter @MailSystemsTech. Until next year!

Yes

47.37%

52.63%

14.29%

3.90%

For our respondents who have input on mailpiece design, we asked if they would push for the use of augmented reality on mailpieces. They responded:

It’s great; it’s going to really help hard copy mail remain relevant in a digital world. Eh, it’s kind of interesting, but I think once the novelty is lost, people are going to quit using it; it has no real purpose. It’s pointless and does nothing to help physical mail.

13.68%

10.42% 5.21%

36.46%

Somewhat worried

Good

Not worried; mail will always be around

Fair Poor

Do you think the USPS is making the correct moves in changing how they do business to respond to the increase in electronic communications and the economy?

38.3%

61.7%

Survey Says…. YES

38.89%

58.95%

But of course nothing is perfect. Out of the issues that people have with the USPS, the top complaints are regarding:

1. REGULATIONS CONFUSING OR BURDENSOME 2. INCONSISTENCY 3. RELIABILITY 4. COMMUNICATION/INFORMATION; TIMELY DELIVERY; DELIVERY ACCURACY (TIED)

No Not Sure

QR Codes were a hot topic just a few years ago, so we decided to ask our respondents if they were still in use, since it seems their usage has declined. Here’s what our respondents said:

Other opinions on the USPS: } The USPS is a necessary business. The operations must be de-politicized and changed for the changing times. If this means 2 or 3 delivery days per week, so be it. We are talking about survival, not union jobs or management make-work. } It seems like the USPS is not even educating their own employees fully on all of the changes that have been made in postal regulations, and are doing very little outreach to help third party mailers stay compliant with these changes. } Politicians must be able to give the USPS the latitude to reinvent their organization and improve efficiency to remain relevant in today’s business environment. } The USPS needs to become more of a true business partner for the mailing community and quite making it such a hassle to do mail at an affordable price.

30 24.47% 20

19.15%

10 1.06%

7.45%

5.32%

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

We have increased our use of QR codes, and seen positive results. We have increased our use of QR codes, but have not seen the results we hoped for. We have decreased our use of QR codes. We quit using QR codes.

We have never used QR codes.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

How “B2Me” Is Re-Shaping our Industry

The Trenches

How Do You Create Transactional Documents? By Mike Porter

Intro to International Mail

Holiday, Non-Holiday Events Make the Season Bright By Vincent DeAngelis

We use QR codes the same amount as we ever did.

Part two of our annual survey reports on industry trends, readers’ opinions of the USPS, and more. By Amanda Armendariz 20

Software Byte

Are You Working Harder or Smarter? By Jeffery Peoples

42.55%

26.32%

Very worried

Excellent

47.92%

I have no opinion on the use of Augmented Reality on mailpieces.

Yes 51.11%

It’s an encouraging sign when over half of our respondents rate the USPS service as excellent or good, and even more encouraging that only 5% report it as being poor. That’s a fairly hearty endorsement if I’ve ever seen one!

Real Life Management

Appreciating Appreciation By Wes Friesen

USPS Trends and Performance We asked our respondents how worried they are about the USPS not being able to meet its financial obligations if some drastic changes (such as eliminating the pre-funding requirements, etc.) are not made?

10.00%

USPS Performance

Editor's Note

Hello, 2016 By Amanda Armendariz

Part two of our annual survey reports on industry trends, readers’ opinions of the USPS, and more. By Amanda Armendariz I always enjoy putting together part two of our annual survey. While I think part one of our survey is remarkably important from the standpoint of reporting the average wages of many industry positions, I always enjoy delving into the results of part two, since it gives such a good picture of how our readers view the USPS and the mailing industry as a whole. One result that pleased me very much this year was the input on the USPS performance. To have only five percent of our respondents rate their performance as “poor”? That is pretty amazing.

Of those who have heard of augmented reality, this is what they think of it:

Postal Affairs

Changing Tides for USPS Parcel Shipping By Kim Mauch

Direct Marketing 101

Tapping into Cross Media Marketing By John Foley Jr.

2016: The Year Ahead

By Jessica Dauer Lowrance

By Kathleen J. Siviter

Direct Mail Evolution

How Much Should You Spend on Marketing? By Joy Gendusa

26 Harnessing Innovation to Deliver Higher Value Communications through Mail

28 Choosing the Optimal Software for Your Operation By Anita Wood

By Grant Miller

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

Special Tribute

A Legacy Is No Longer With Us By William Gunther III

EDITOR'S NOTE

VOLUME 28, ISSUE 7 MAGAZINE STAFF Publisher Ken Waddell

HELLO, 2016

Editor Amanda Armendariz amanda.c@rbpub.com Contributing Writers Vincent DeAngelis, Jessica Dauer Lowrance, John Foley, Jr., Wes Friesen, Joy Gendusa, Bill Gunther III, Kim Mauch, Jeffery Peoples, Mike Porter, Kathleen Siviter, Anita Wood Audience Development Manager Rachel Chapman rachel@rbpub.com Advertising 608-442-5064 Ken Waddell ken.w@rbpub.com Design Kelli Cooke RB Publishing Inc. 2901 International Lane Madison WI 53704-3128 Tel: 608.241.8777 Fax: 608.241.8666 Email: rbpub@rbpub.com SUBSCIRBE Subscribe online at www.MailingSystemsTechnology.com. Subscriptions are free to qualified recipients: $20 per year to all others in the United States. Subscription rate for Canada or Mexico is $40 per year, and for elsewhere outside of the United States is $45. Back issue rate is $5. Send subscriptions to: Mailing Systems Technology, PO Box 259098, Madison WI 53725-9098 Call 608.241.8777 Fax 608.241.8666 E-mail rachel@rbpub.com Online at www.MailingSystemsTechnology.com. REPRINT SALES ReprintPro 949.702.5390 www.ReprintPros.com All material in this magazine is copyrighted ©2015 by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to Mailing Systems Technology, RB Publishing Inc. or its staff becomes property of RB Publishing Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or Mailing Systems Technology. RB Publishing Inc. and/or Mailing Systems Technology expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine. MAILING SYSTEMS TECHNOLOGY (ISSN 1088-2677) [Volume 28, Issue 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.

WITH AMANDA ARMENDARIZ I feel like every year as I sit down to write my November/ December Editor’s Note, the same thought runs through my head. “How is it already the end of the year? How can we already be preparing for the year ahead?” I don’t know why this time of year always catches me unaware; perhaps it’s my denial that the lovely days of summer really are over, and we’re careening headlong into the cold winter months ahead? Is it perhaps because I realize that I only have about five weeks left until Christmas, and I have bought literally only two gifts? I’m not sure what it is, but putting this November/December issue to bed somehow takes me by surprise every year. Yet it’s exciting to see what 2016 will bring. 2015 was definitely a year of ups and downs for the mailing industry, but overall, I feel pretty good regarding the state of the mail as this year comes to a close. I attended the National Postal Forum in May and was thrilled to see how much energy and excitement there was regarding mail, the USPS, and its new innovations. And while nothing can change the fact that mail volumes are naturally declining as more and more communication takes place digitally, it was still heartening to see that there most definitely is a place for mail in this digital world. So I’m excited to see what is in store for us in the new year. And before you say goodbye to 2015, be sure to check out part two of our annual survey, which starts on page 16. This survey is an interesting glimpse into how our readers view trends in the mailing industry… and it’s always interesting to see how opinions on these trends change from year to year! 2016 will likely bring many changes for mailers. On a personal front, one of the changes I’m most excited about is our new website, which should be unveiled before the new year. It’s much more streamlined and easier to navigate, so we look forward to sharing that with you! As always, thanks for reading Mailing Systems Technology.

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

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

REAL LIFE MANAGEMENT

By Wes Friesen

APPRECIATING APPRECIATION

t is a known fact that appreciation is one of the top motivators for people to work harder and be more committed to their organizations. Studies show that appreciation is linked to happiness in the workplace — and job satisfaction and engagement. However, while 51% of managers feel they do good job of recognizing a job well done by their staff, only 17% of the employees in the same groups believe their managers recognize them for doing a good job. Sadly, a Gallup survey found 65% of respondents said they received NO appreciation from their boss the prior 12 months! Let’s dig into why appreciation is important and look at principles to practice appreciation well.

Why Is Appreciation Important? A study by career site Glassdoor revealed that more than 80% of employees are motivated to work harder when their boss shows appreciation for their work. The number one reason why employees enjoyed their work was “I feel genuinely appreciated by the company.” On the other hand, 64% of employees who leave their jobs say they do so because they don’t feel appreciated. According to a study conducted by Towers Watson, the single highest driver of engagement is whether or not workers feel "their managers are genuinely interested in their wellbeing.”

Ten Principles of Appreciation Following are 10 helpful principles of appreciation that are adapted from Barbara Glanz’s book The Simple Truths of Appreciation. 1. Everyone wants and needs appreciation. Steven Covey emphasized the need for appreciation when he said, “Next to physical survival, the greatest need of a human being is to be under-

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

“The deepest principle of human nature is a craving to be appreciated.” —William James, esteemed psychologist

stood, to be affirmed, to be validated, to be appreciated.” 2. It doesn’t have to be something big. Sometimes a simple compliment can be very encouraging. Mark Twain was quoted as saying “I can go two months on one compliment.” Samuel Taylor Coleridge inspires when he said, “The happiness of life is made up of minute fractions — the little soon forgotten charities of a smile, a kind look, a heartfelt compliment, and the countless infinitesimals of pleasurable and genial feeling.” 3. Make it personal. The best approach is to speak a person’s appreciation language. See the section about the Five Appreciation languages. 4. Be creative. Have fun at showing appreciation! You can organize fun outings, bring in food, give out certificates of appreciation — the list goes on. 5. Surprise people if you can. One of the highlights of my career involved a surprise act of appreciation for a company purchasing specialist (Frieda) who had been helping us with implementing RFPs in my Print & Mail Services department. The department supervisor, Eric, and I invited Frieda to a meeting with us, where we proceeded to give her a dozen long-stemmed roses! She will never forget that — and neither will I.

6. Be sincere. Sincere appreciation is well accepted, but insincere appreciation can actually be worse than no appreciation at all. Sam Walton encouraged us to “appreciate everything your associates do for the business. Nothing else can quite substitute for a few well-chosen, well-timed, sincere words of praise. They’re absolutely free and worth a fortune." 7. Have a plan. One of the keys to doing appreciation well is to be consistent, and consistency requires intentionally planning ahead. 8. Share yourself — from the heart. Allow your emotions to show when expressing appreciation. When we show our hearts to our employees they are drawn to us and feel closer. 9. Make it memorable. Look for opportunities to make a lasting memory. Thirteen years ago, my billing departments were working hard to try and implement a new Customer Information System. One afternoon to show my appreciation I took the teams out to see a movie and sent them home early. I still hear positive feedback about that years later! 10. You will receive more than you give. Pat Boone was right on when he said “The most attractive people in the world are those who are interested in others — turned outward in cheerful-

ness, kindness, appreciation, instead of turned inward to be constantly centered in themselves.” Jesus taught that it is more blessed to give than to receive — and we know from experience that is true.

The Five Languages of Appreciation Psychologists Gary Chapman and Paul White identified five ways to show appreciation at work in their book The 5 Languages of Appreciation in the Workplace. They found that each person has a primary and secondary language of appreciation. Our primary language communicates more deeply to us than the others. Although we will accept appreciation in all five languages, we will not feel truly encouraged unless the message is communicated through our primary language. 1. Words of affirmation. Includes using words to communicate a positive message to another person. Can include praise for accomplishments (“thank you for completing the report completely and ahead of schedule”) or affirmation of character (“I appreciate the way you patiently help out your co-workers”) or personality traits (“one of the things I admire about you is your optimism in the face of change”). 2. Quality time. Means giving a person your focused attention and spending more time, discussing the topics that are relevant and important to them. 3. Acts of Service. This language involves reaching out to helping others — to provide practical help and going out of our way to lend a hand. 4. Tangible gifts. Giving the right gift to a person who appreciates tangible rewards can send a powerful message of thanks, appreciation and encouragement. The important thing is to give something that is meaningful and relevant to them.

5. Appropriate physical touch. Caution is in order, but some team members respond well to appropriate physical touch — like high-fives, fist bumps and pats on the back. We frequently see this in sports world, but it also can translate to the work environment. How can you discover what your co-workers’ appreciation language is? You could buy copies of the Appreciation book, which includes access to an online assessment survey. Alternatively, you could explain the five languages and ask employees what they think their primary and secondary appreciation languages are. You can also observe a person’s behavior, observe what they request of others and listen to their complaints to get clues to their preferred language. Here is a closing thought. Appreciation is a gift that you can give to anyone you encounter — it’s completely your choice. And each time you choose to thank someone for a job well done, you are making the world a better place. Voltaire stated it well when he said, “Appreciation is a wonderful thing: it makes what is excellent in others belong to us as well.” Thank you for “appreciating appreciation” and putting it into practice! ¾

Wes Friesen, MBA, CMDSM, MDC, EMCM, MCOM, CCE, CBA, CBF, ICP, CCM, CMA, CM, CFM, APP, PHR manages multiple departments for a utility based in the Northwest. Wes also teaches university classes and is a featured speaker at national Conferences like MAILCOM, National Postal Forum, NACUMS, and other regional and local events. Check out his personal web-site for free information (www.wesfriesen.com). He can be contacted at pchefdebi@comcast.net.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

SOFTWARE BYTE

By Jeffery Peoples

ARE YOU WORKING HARDER OR SMARTER?

f you’re submitting electronic files to PostalOne! for just the Full-Service mailings you process, chances are you’re working a lot harder than you really need to be. Oh, you say, “but sending files to PostalOne! is a lot more work than submitting hard copies.” On the surface, that may appear to be the case, especially if you do not do electronic submissions very often. The fact is, though, if you have two different process flows, one for Full-Service mailings and one for everything else, you ARE working harder than necessary. And, who wants to work harder than they need to? Any workflow is easier if all the jobs are processed in the same manner, and submitting jobs to PostalOne! is no exception. But Only Full-Service Requires eDoc We often hear from mailers who say that they only use electronic documentation (eDoc) for Full-Service mailings, and that they use hard copy for everything else because eDoc is not required. At first blush, that may make sense, but the reality is that going back and forth between eDoc and hard copy is actually what is creating the extra work. As long as you have a Mail.dat file for a mailing, there is no reason why you should not be submitting eDoc, simply because it is far easier to process all your jobs in the same way, as opposed to using one workflow for some, and a different workflow for others. The more consistent you make your workflows, the more chance you have to start automating steps in your process. That automation is what helps you work smarter, not harder. How Do I Move to One Workflow? It’s a good idea to start by documenting the process you currently use to submit your eDoc. Then document your hard copy submission process, and compare the

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

steps between the two. Pinpoint areas in your eDoc process that tend to cause issues or take more time; then work on eliminating the hurdles. The best way to do that is to practice sending those hard copy jobs electronically using the Test Environment for Mailers (TEM). The more you practice, the easier you will find the process to be, and the more likely you are to quickly identify problem areas and make the necessary corrections. As you go through this practicing and error correcting, modify your workflow documentation to reflect what you learn. When

after the fact. The cleaner and more accurate your Mail.dat files are right out of the gate, the better chance you have at automating subsequent processing steps. Once you have your Mail.dat files whipped into shape, identify the various types of processing steps needed for the mailings that you produce:  Are there common edits that need to be made to the files?  Are there additional processing steps needed, such as palletizing, creating courtesy pallets, analyzing for drop shipments, merging for co-palletization, etc.?

Once you have identified the necessary processing steps for the various types of mailings you do, start investigating the automation tools available in your mailing software. you start feeling more comfortable using eDoc, start transitioning your traditional hard copy jobs to the new electronic workflow, and set a goal of transitioning all of them within a reasonable period. How Do I Automate My Workflow? The best place to start looking at automation is at the source of your eDoc: the Mail.dat file. It makes sense to put as much valid data as possible into your Mail.dat files coming out of the presort process, so there is less editing and manipulation to perform on these files

Once you have identified the necessary processing steps for the various types of mailings you do, start investigating the automation tools available in your mailing software. Are there steps that can be performed at the same time the Mail.dat files are being imported into the software? For example, there may be certain jobs for which very few, if any, edits or processes are needed — and if you’re using the right post-presort software, these can likely be set up to automatically generate postage

CONTINUED ON PAGE 11

INTRO TO INTERNATIONAL MAIL

By Vincent DeAngelis

HOLIDAY, NON-HOLIDAY EVENTS MAKE THE SEASON BRIGHT

he holiday season is a natural opportunity to look at the global shipping outlook. In 2015, the global economy is only marginally better than it was in 2014. The mixed-todown export outlook is offset by growth in cross-border e-commerce and m-commerce demand — a common, ongoing trend in many markets. However, risks to the global outlook still prevail. Those risks include:  Emerging economies’ near-term growth being softened by low commodity prices and waning consumer demand in China  A bumpy transition of the China growth model from export to domestic demand  Economic pressure from geopolitical tensions

Growth Opportunities That being said, there are still growth opportunities for the shipping carrier industry. The optimism is evident in recent statements about global growth and the business mix made by carrier senior executives. Specifically:  “International…segment set a new high in second quarter…success…due to robust export growth that remains at 5.5% growth driven by an intra-Europe shipment growth of more than 8.5%… we expect to see positive momentum continuing the second half of the year…” Richard Peretz, UPS Chief Financial Officer

 “…boxes [are] growing very nicely… Envelopes…are declining…83% of our traffic moves as International Priority… when we’re moving deferred traffic, we’re moving it in a system like our FedEx Trade Networks…our deferred

packages now around the world are making us more money.” David J. Bronczek, FedEx Express President and Chief Executive Officer

longer than the 2014 season, you see the opportunity for more e-commerce and m-commerce (consumers’ mobile-devicebased buying habits) purchases.

Non-Holiday Sales Events

Retail Powerhouses

Take a close look at this holiday season and you will see that US retail sales are estimated to grow 12-13% in 2015 compared with 14.4% in 2014. Some of this could be caused by the proliferation of periodic non-holiday sales events in Q3, which could eventually affect traditional holiday spending. Evidence of this transition from “holiday season” to periodic shopping events can be found in Australia’s Click Frenzy, which saw a 27.7% growth in sales in November 2014 vs. 2013. Amazon Prime Day on July 15, 2015, was global and open to all Prime members as well as new customers who signed up for 30-day trial memberships. These and other similar events will, most likely, be repeated and expanded to include other dates prior to the traditional holiday shopping season. Another manifestation of this periodic retailer shopping event phenomenon is the online globalization of the holidays. Most of these events will sound familiar:  Singles Day, November 11, in China, Hong Kong and South Korea  The aforementioned Click Frenzy on November 17 in Australia Black Friday on November 27 in the US, UK, France and South Korea  Cyber Monday on November 30 in the US, UK, Australia, France and Japan  Green Monday and Super Saturday in the US in early December When you consider the fact that the 2015 holiday season is three shopping days

Finally, you cannot discuss holiday shipping without looking the programs Alibaba and Amazon are planning and the results they are projecting. Alibaba is looking to grow international trade from other markets to China by partnering with DHL e-commerce and German football club FC Bayer Munchen (Munich). DHL and Alibaba will collaborate on order management and product listings, custom clearance, customer service and local delivery of merchandise to Chinese fans. The partnership between Macy’s and Fung Retailing to sell Macy’s products on Alibaba’s Tmall Global is another good example. Amazon Prime continues to be a catalyst for driving strong and consistent growth. More than 34 million items sold on Amazon Prime Day last July 15. Amazon expects Q3 2015 sales to grow at least 13% — possibly as much as 24% — above Q3 2014 due, partially, to Prime Day. And Prime membership continues to grow. In 2014, membership grew 53% with 10 million new sign-ups last December alone. The international mailing and shipping outlook for this holiday season is bright. Nonetheless, we can’t be sure until we assess the entire season after it concludes. One thing is certain, however. The carrier industry and business service providers are prepared to make this upcoming holiday shopping season a success for all those who ship and receive mail and parcels. ¾

Vincent DeAngelis is Vice President, Postal Relations, Neopost USA. Headquartered in Milford, CT, Neopost USA provides mailing, business communications management and shipping hardware and software solutions. As businesses increasingly move to digital communications, Neopost USA continues to help its customers communicate via physical mail, digital communications and parcels. For more information on Neopost USA, visit www.neopostusa.com.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

THE TRENCHES

By Mike Porter

HOW DO YOU CREATE TRANSACTIONAL DOCUMENTS?

ere is how a lot of transactional print is generated:

1. Load high capacity paper feeders on cut sheet printers with color pre-printed shells of various types. Page one shells may be formatted to display a mailing address and sometimes includes a perforated remittance stub. There may be some boilerplate text on the back. Page two shells may be blank, feature some form elements, or perhaps only a logo.

Color Becomes Affordable For the longest time, color was the barrier — or more specifically the price of color. Printing form elements on the fly just wasn’t economically feasible. Most transactional print companies felt their customers wouldn’t be willing to pay the premium for color printing that would have been necessary to offset the investment in full color print equipment. Pre-printed paper stock remained the norm.

2. After printing, unload the output bins and transport the printed material to the mail center where intelligent inserters fold and insert the pages into window envelopes. Marks on the pages tell the inserters which pages to collate into the same envelope, and may control the action of insert feeders to add mail piece stuffers. Does this workflow sound familiar? A great many in-house and service provider operations have been creating statements, bills, claim forms, and other transactional documents this way since high speed production laser printers were introduced in the late 1970s. The speed, print quality, and capabilities of the printers and inserting equipment have improved since then of course. And modern tools to compose documents, re-engineer existing print streams, or track and monitor jobs help document centers provide a wide array of services at a high level of quality. One thing that hasn’t changed, however, is a persistent reliance on those pre-printed shells, though the technology exists to generate all the form elements, graphics, and backgrounds simultaneously with variable text. Shops still have warehouses full of job-specific forms which they order, inventory, stage for production, and return to storage over and over. Why is that?

ital investment. They take up a lot of space and they represent a significant workflow shift for companies switching from cut sheet to roll-fed printing. When paper comes off the printers in rolls, sheet-fed inserters must be converted to continuous feed input modules at additional expense. Floor space can be a problem for the inserting operation too. Some of the mail centers I’ve visited don’t have extra room to accommodate roll input.

The printer manufacturers tried convincing transactional printers that transpromo justified the investment in full color printing. The printer manufacturers tried convincing transactional printers that transpromo justified the investment in full color printing. Definite benefits in personalization and targeting exist with transpromo, but it was never widely implemented by transactional printers. Today’s inkjet printers have been able to bring the consumable cost-per-page for full color printing into a reasonable range. Current devices enable a white paper workflow that provides benefits beyond just saving on pre-printed forms and some large firms have made the switch to continuous feed inkjet over the last few years.

Barriers to Entry However, smaller organizations still encountered barriers preventing them from moving to full color digital printing. The full color inkjet devices available for the last several years require a large cap-

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

For in-house print/mail operations or mid-size regional service bureaus, the switch to inkjet has been impractical. They have remained stuck with the limitations imposed by cut sheet printing on shells and denied the benefits associated with white paper workflows.

New Solutions Coming to Market Judging from some of the technology shown at recent trade shows, the lockout could be ending. Some industry-leading companies have introduced inkjet solutions aimed at smaller organizations and their inventories of cut sheet applications. New printers on the market use a narrow web for one-up production. Print producers can migrate their cut sheet applications to continuous without encountering confusing repositioning issues associated with printing multiple pages across the paper width. This is especially helpful when merging several small,

variable page-count, jobs together to print them in mailing sequence. In a one up environment print/mail operations won’t need sophisticated slitting and collating processes to assemble pages for inserting. The narrow web also helps with the space problem. Printer manufacturers have been able to consolidate multiple print engines, dryers, finishing components, and paper paths into a compact footprint. Innovative arrangements for mounting the narrow web rolls have resulted in designs that don’t require a huge role unwinder at the end of the machine that would typically require at least six feet of extra space for loading and unloading rolls. The latest narrow web inkjet presses offered by top-tier companies like Pitney Bowes and Xerox include integrated cutters to trim the pages to familiar page dimensions. They also feature or will feature variable perforators to add remittance stubs, coupons, or other elements to doc-

uments on an on-demand basis. The pages exiting the printers will be ready for the sheet-fed inserters, just as they were with cut sheet equipment. This capability also allows a print and mail operation to retain some cut sheet printers without requiring a separate production line for finishing.

White Paper Workflow for All The idea with the new printing devices just coming on the market is to make it possible for organizations with diverse applications and more modest volume requirements to make the transition to full color inkjet and white paper workflows. Equipment prices are reasonable compared to those large commercial presses, the learning curve will be shorter, and integration into existing facilities and finishing configurations should be relatively easy. Starting and stopping printers eats into productivity. Moving cartons of pre-printed

forms from the warehouse to the print room can result in production delays (and errors). Job changeover and reconciliation on inserting machines results in periods of zero production. All these things add to the cost of producing those transactional documents. A white paper workflow enables the combination of several small jobs together, eliminating many of the productivity-killing activities normally encountered by companies utilizing cut sheet pre-printed shells. As more transactional document volume moves to electronic distribution, the ability to make large efficient jobs out of small time-consuming work becomes even more important. The latest printer offerings provide organizations previously excluded from adopting digital color workflows an opportunity to continue providing their customers with high quality transactional document production at a reasonable price. They are worth a look. ¾

Mike Porter is President of Print/Mail Consultants, a firm that helps companies lower costs, develop future strategies, and improve quality in their document operations. You are invited to visit www.printmailconsultants.com and sign up for Practical Stuff, a free newsletter for document print and mail professionals.

SOFTWARE BYTE CONTINUED FROM PAGE 8 statements and create the export file needed to upload to PostalOne! as soon as you import the file into the software! Likewise, if there are standard processes that need to take place, such as changing the mailing dates or palletizing the loose trays, those can also be set up to be done automatically as the files are imported into the software. Additionally, you may be able to set up custom workflow configurations that will automatically launch all the steps needed for specific workflows, simply by dropping the Mail.dat files into specified “hot folders.”

unfamiliar. Standardizing and automating your workflow processes is no different; we tend to be most comfortable doing the same tasks in the same manner that we are familiar with. However, the way you process your mailings today may not be the most effective or efficient way, and making some changes is the only way that you can make any improvements. It truly does not need to be an intimidating process. You can start out with some very basic standardization and automation steps and then build on that once it becomes second nature and comfortable.

Start Out Small We are all human, so our natural tendency is to resist things that are new and

Can Someone Help Me? At this point, you may be thinking “This all sounds good, but I’m no technical guru.

How am I supposed to get all of this put into place?” Not everyone is a computer expert, and certainly getting the mail out the door is your top priority, which means that you need to take advantage of your available resources. Find someone in your organization who is more computer savvy, and ask them to help you look for tasks that could be automated. Tap into the technical resources of your mailing software providers; chances are they have numerous resources to help guide you or even perform some of these automation configuration steps for you. Join area mailing organizations, such as your local Postal Customer Council (PCC) and network with other mailers to see how they are tackling their workflow automation issues. ¾

Jeffery Peoples is Founder and CEO of Window Book. Since 1989, he has created many innovations that make using the Postal Service easier and more profitable for mailers and shippers, including the first-ever: electronic Domestic Mail Manual (DMM), MAC Gold shipping system, commercial postal statement management system that supports both Mail.dat & non-Mail.dat presort data, and the first Priority Mail Open and Distribute system that goes from analysis to printing PMOD labels for tracking mailings.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

POSTAL AFFAIRS

By Kim Mauch

CHANGING TIDES FOR USPS PARCEL SHIPPING

t’s no secret that the United States Postal Service is struggling with finances. But among the gloomy revenue news is a shining star: competitive parcel shipment. Quarter over quarter and year over year the volume and revenue from online retailers, small package shipments and Priority Mail have increased more than any other product. Without a CPI-based price cap, USPS is able to freely adjust rates and products in this category each year. The changes for 2016 have been announced, and they bear the mark of the new postal leadership. Let’s take a look at the changes for domestic parcel shipping.

Service Changes The most noticeable change for 2016 is the number of simplifications in the competitive services. Recently added products like Critical Mail and Priority Mail Express Flat Rate Boxes have been completely eliminated “because of low customer usage” and “insufficient volumes.” This is an interesting turn after the previous USPS executive team pushed for the expansion of products without much input from the mailing industry. This year’s contraction shows a refocus on the core products and services that are driving parcel growth. It also reflects an understanding of both the mailing industry and the USPS retail force. When products are retired, speculation usually follows. Why does any product fail? Is it due to the product, the price, the sales force, or even a misunderstanding of the market? In most cases it is a combination of all these factors. Another interesting development is the announcement that Commercial Plus pric-

ing for both Priority Mail and Priority Mail Express will be phased out in 2017. Commercial Plus was used as an incentive for high-volume shippers. Rather than consolidate, in 2016 USPS is raising the rates for Commercial Plus to match the Commercial Base prices, an almost 50% increase for Priority Mail Express. In the filing, USPS noted that shippers could still get lower prices by using negotiated service agreements (NSAs). The move to NSAs is interesting as the process to file and get approved for NSAs is rather lengthy, so it’s unlikely that all the companies currently enjoying Commercial Plus rates will be able to negotiate lower rates. This seemingly small change will likely create a ripple in the shipping industry, and it will be interesting to see whether it has any effect on postal revenue.

Price Signals Unlike a market dominant price filing, the postage increases for 2016 varied widely. From 1.9% increases for Parcel Select Nonpresort (renamed Parcel Select Ground) to 48.2% increases for Priority Mail Express Commercial Plus, shippers will need to re-evaluate which solutions they use in order to make the most of their shipping dollar. An interesting thing to note is the 23.5% increase for Parcel Select Lightweight. Several years ago the Standard Mail parcel option “Nonflat Machinable” or NFM was reclassified as a competitive product which became Parcel Select Lightweight. The pricing for these small marketing parcels has gone up drastically. The 2016 prices look nothing like the NFMs, and their mail volume has

suffered for it. In contrast, Priority Mail as a whole will only be going up 9.8% — which is remarkable since these prices have not been raised the last few years.

The Competitive Landscape USPS was quick to point out the relatively small jump in Priority Mail prices in its Industry Alert. If you take the price increases averaged over time, each year amounts to less than a 3.3% increase. This is key positioning as both UPS and FedEx have announced both increased prices and increased fuel surcharges. With both the private businesses raising their rates around 4.9%, USPS is continuing to position itself as the low-cost option. This positioning is key as the postal service ramps up its tracking capabilities. Unfortunately mailers using USPS will still not have the day-certain delivery offered by FedEx and UPS. The 2016 prices are a mixed bag for parcel shippers. Large volume shippers will likely be disappointed in the direction Commercial Plus pricing is headed, while smaller shippers using Priority Mail will continue to get a good value. Curious how your prices will change? They’re available to review on the USPS Postal Explorer website (http://pe.usps.com). ¾

Kim Mauch is a subject matter expert in mailing preparation and submission at Satori Software. Contact her at kmauch@satorisoftware.com.

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

DIRECT MARKETING 101

By John Foley, Jr.

TAPPING INTO CROSS MEDIA MARKETING

t's a loud, busy world out there. With so much information available, getting your voice heard is a challenge for any company. For mailing, print, and fulfillment providers, cross media marketing is really vital right now. A well thought out cross media campaign is one of the best ways to communicate any message clearly, consistently, and in a way that is relevant to the hearer. Keeping up with cross media marketing trends is an important component of your ongoing success â&#x20AC;&#x201D; and that of your clients. Cross Media Marketing Matters Understanding the importance of keeping up with the latest in cross media marketing is the foundation of a successful cross media marketing campaign. Put simply, cross media marketing means greater response rates. That equals more sales for your clients, and happier clients and repeat business for you. Direct mail campaigns that integrate cross media marketing frequently have a greater conversion rate than mail campaigns alone. This increased response rate is a strong selling point for cross media marketing, but the benefits go beyond straightforward sales figures. What else can cross media marketing do for your client's business? Building Better Customer Relations The way to a customer's heart (and wallet) is by building an authentic relationship based on trust. Customers want to know that they are doing business with a company that understands their unique needs. Cross media marketing is a useful tool for doing just that. The use of pURLs

is already well known, but how about personalized QR codes or even personalized NFC marketing? From a mailed brochure to a bus stop ad, QR codes and NFC mean the customer is offered relevant content in an instant. A car dealership could use a personalized QR code to take the customer to a landing page tailored to their locality. A technology business could use NFC to allow customers to download their app by simply holding their phone near an NFC-enabled poster. It all adds up to a more relevant marketing campaign that will encourage customer loyalty. Beyond Print and PURLs As you can see, cross media marketing is much more than linking a mail piece to a pURL. Technology such as QR codes and NFC can be used to make a campaign more personalized. Placing the right message in front of the right customer means that marketing dollars are spent in the way most likely to bring a good return. The new cross media marketing technology means that printed materials are no longer static, but can become part of an engaging and tailored marketing campaign. Innovative uses of augmented reality can transform printed materials into a platform for a 3D experience.

QR codes is second nature to many consumers, while augmented reality and NFC are much more novel. Seeing how these new technologies develop and how to integrate them into a cross media campaign will ensure your campaigns and services stay at the forefront of the new cross media. Imagine an augmented reality campaign that allows customers to tap a clothes ad and see themselves wearing the clothes? Or an NFC store coupon that downloads all the information to their phone and automatically applies the offer with one tap at the checkout (think Targetâ&#x20AC;&#x2122;s Cartwheel app!)? Keeping abreast of new developments in cross media marketing means you can design and deliver services that are up to date and in line with the competition. When it comes to getting their voices heard, your customers may be wondering if they simply have to shout louder. With the latest cross media marketing technology, you can show them how to stop shouting and communicate smarter. Cross media marketing provides the tools needed to craft relevant and engaging campaigns that work across channels and speak directly to customers. Âž

Keep an Eye on the Future Cross media marketing is an ever growing and ever changing sector. When QR codes first came into common usage, they seemed like a kind of magic, allowing smartphone users to access information with a simple point and click. Now, using

John Foley, Jr. is the CEO of interlinkONE and Grow Socially. John and his team consult with companies on sales and marketing techniques, write strategic online marketing plans to get you on a path to online and social success, and John speaks frequently to print, mail, and fulfillment providers about integrating technology such as QR codes into their products and services. Learn more about John at www.JohnFoleyJr.com.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

DIRECT MAIL EVOLUTION

By Joy Gendusa

HOW MUCH SHOULD YOU SPEND ON MARKETING?

i’ve asked hundreds of business owners what their marketing budget is. Most of them respond the same way: with silence! I know. Coming up with a marketing budget is boring. And confusing. But it is VITAL to your business success. So I’m going to help you. Ready? First, let me make a few things clear: } There is no silver bullet, no one-sizefits-all solution. I’ll give you the tools to create the perfect budget for your business. There’s no top-secret trick that works for everyone. } Think of these numbers as a starting point. This is the minimum you should be spending in order to grow your business. If you have wiggle room, you can always increase your budget — and growth will follow. That’s how this works. The more you put in, the more you get out. (As long as you’re spending it wisely, of course.) } When a business owner needs to cut expenses, the first thing they cut is the marketing budget. This is always — ALWAYS — the wrong thing to do. Okay. Let’s get to it. First things first: Your marketing budget should be a percentage of your gross revenue.

Example: A-Plus Auto Accessories had a gross revenue of $500,000 in 2014. They assign 15% of that to marketing. 15% of $500,000 is $75,000 — so that’s their marketing budget for 2015 ($6,250 per month). What percentage of your gross revenue should you use? It varies. For example, if you’re a new business or your revenue tends to fluctuate significantly throughout the year, you should reassess your gross revenue quarterly — or even monthly — to get a better idea of what your marketing budget should be. I’ve read that first-year businesses should use as much as 30% of their gross

revenue — but, again, it varies. And, of course, the percentage is going to be different for different industries. Don’t fall asleep! You can do this. To make things easier, let’s work with three main categories of businesses. Find the one that’s right for your business and go from there.

1. Startup/New Product Launch Startups need more marketing capital to get things rolling. Money will be tight at first, but think of it as an investment — because that’s what it is. You’re investing in your business! Ideal percentage: 25-35%

Variables: This is the most volatile situation your business can be in, which is why the range is so wide. Some industries are more competitive than others. If you’ve done your research, you’ll know where you stand. If competition is light, 25% should be enough. If competition is heavy, you simply have to invest more or you’ll never get off the ground.

Tip: Rate your level of competition on a scale of 10. Lots of established competitors around? You’re at a 10. (Dentists frequently fall into this category.) Have a niche business with virtually no competition in the area? You’re a 1. Use this number to guide your marketing budget. The heavier the competition, the more you’ll need to spend. It sounds intimidating, I know. But remember: You won’t be a startup forever! Once you’re established and bringing in a sustainable revenue, you’ll fall into the next category, where you can potentially lower that percentage.

2. Established, Growing Businesses

You’re growing, you’re prospering, you’ve got momentum. Don’t step off the gas now! Ideal percentage: 12-18%

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

Variables: Competition still factors in here, but what’s even more important to consider is your profit margin4. The average profit margin is 10-12%. The higher yours is, the more you can afford to spend on marketing.

Tip: Let your competition help you set the bar, too — spend closer to 12% if competition is low, closer to 18% if it’s high — and then let your profit margin help you decide whether to bump that number up or down.

Examples: A-Plus Auto Accessories is a growing business with low competition in the area, so they initially set their marketing budget at 13%. But they sell high-priced items with a significant profit margin (50%), so they increase their marketing percentage to 16% — because they can afford it. B-Good Backyard Playsets is a growing business with average competition in the area, so they set their marketing budget at 15% to start. Their profit margin is only about 7%, however, so they bump their marketing percentage down to 13%. Remember, this is just a starting point. Over time, you’ll see what impact your marketing percentage has on your revenue and can adjust as necessary. Keep in mind that how you spend your budget is every bit as important as how much you’re spending. If you’re not seeing results, try changing the way you’re spending your percentage before you lower it!

3. Stagnant/Declining Businesses If revenues are flat — or worse, going down — you need something to jolt your business back to life: more marketing. (It may not be the ONLY thing you need, but it’s definitely ONE of the things you need.) Ideal percentage: +3-10% more than what you’re currently doing

Whatever your marketing budget is, bump it up by 3-10% for six months and watch what happens. (How much you increase it depends on your competition and the severity of your situation.) You should see the trend reversing after a couple of months and by six months know exactly what impact the change has had. If you’re prospering again, only consider lowering the percentage if it is unsustainable at this level. If you can keep it up, do so and you’ll continue to grow. If at this point you’ve only returned to stable revenues — or are still in decline — consider increasing the percentage again (and again) until you find the number that works. If you’re not currently using the percentage method to set your marketing budget, figure out what the percentage is of the amount you’ve budgeted, then follow the guidelines above.

Example: A-Plus Auto Accessories is a declining business that generated $500,000 in gross revenue in 2014. They budgeted $24,000 for marketing for 2015 ($2,000 per month), which is 4.8%. They would bump up their marketing percentage to a minimum of 8% ($3,333 per month) and measure the results on revenue.

Tip: You may have to give up some of the luxuries you enjoyed while business was thriving. Embrace where you are now and do what is necessary to get your business growing again! ¾ Joy Gendusa is the Founder and CEO of PostcardMania, a fully-integrated marketing firm specializing in direct mail. She used postcards to grow PostcardMania from just a phone and computer to a $22 million enterprise in less than a decade. PostcardMania offers free postcard samples for your industry — request a sample pack today! Connect on Twitter: @postcardmania or @joygendusa.

A LEGACY IS NO LONGER WITH US My father, William (Bill) H. Gunther, Jr., died on Monday, July 20, 2015. He was 92 and had developed pneumonia. In reading his obituary in the local paper, I couldn’t help feeling that an important part of Dad’s story was missing. He contributed so much to the print and mail industries. He was a problem solver, an innovator, and a teacher who gave countless young people their start in the industry. He absolutely loved the print and mail industry. He often imagined solutions that were ahead of their time. I’m proud to say that my father left a legacy in this industry. Here is just one example. When Bill was a systems analyst in a whale hunting company, he was called in by a high-volume magazine publisher to look at a subscription renewal operation. At about the same time a major bank asked him to take a look at a dividend disbursement operation. Then another bank asked him to survey a lock box operation. All of these operations looked extremely messy to Bill. A tremendous amount of time was being spent handling, balancing, transcribing, microfilming and filing paper. Even more appalling to him was the fact that the paper documents often represented only one or two dollars in value. He put on his thinking cap and devised a machine of a combination printer, adding machine, MICR encoder, optical reader, endorser, sorter, on-line entry machine. As a result, he reportedly was able to combine about l5 previously separate operations into one operator-machine operation, thus reducing the cost of processing from about 10-120 cents to two cents or less per document. Bill found an answer because he looked at systems with fresh eyes. Hundreds of trained systems analysts had studied these systems, but most of them had been trained to look at single operations and to figure out how to improve them. Bill looked at the pieces but he built a system to do the entire job. "Foreigners" and "generalists" make major breakthroughs because they "see" matches between tasks and technology that are not obvious to natives or specialists. Bill Gunther thought of work the way golfers feel about golf. There was nothing he’d rather be doing, and he was always learning how to do it better.

By William Gunther III

SURVEY SAYS…. Part two of our annual survey reports on industry trends, readers’ opinions of the USPS, and more. By Amanda Armendariz I always enjoy putting together part two of our annual survey. While I think part one of our survey is remarkably important from the standpoint of reporting the average wages of many industry positions, I always enjoy delving into the results of part two, since it gives such a good picture of how our readers view the USPS and the mailing industry as a whole. One result that pleased me very much this year was the input on the USPS performance. To have only five percent of our respondents rate their performance as “poor”? That is pretty amazing. But not all is rosy. At the National Postal Forum, the USPS was incredibly proud of its Augmented Reality on mailpieces, and

USPS Trends and Performance USPS Performance

We asked our respondents how worried they are about the USPS not being able to meet its financial obligations if some drastic changes (such as eliminating the pre-funding requirements, etc.) are not made. Here’s how they responded.

13.68%

10.42% 5.21%

Very worried

Excellent 36.46%

YES

Not worried; mail will always be around

Fair

Do you think the USPS is making the correct moves in changing how it does business to respond to the increase in electronic communications and the economy?

38.3%

Somewhat worried

Good

Poor

47.92%

61.7% NO

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

26.32%

58.95%

But of course nothing is perfect. Out of the issues that people have with the USPS, the top complaints are regarding:

1. REGULATIONS CONFUSING OR BURDENSOME 2. INCONSISTENCY 3. RELIABILITY 4. COMMUNICATION/INFORMATION; TIMELY DELIVERY; DELIVERY ACCURACY (THREE-WAY TIE)

We asked our respondents if they had heard of Augmented Reality (which is, as the USPS states, “a technology that enables mobile devices to superimpose related, digital content on top of a real-world view.... It essentially adds a digital layer of information on top of real world images”.

Of those who have heard of augmented reality, this is what they think of it: 44.16%

40 37.66%

30 52.63%

Yes

47.37%

20 14.29%

10 3.90%

For our respondents who have input on mailpiece design, we asked if they would push for the use of augmented reality on mailpieces. They responded:

10.00%

It’s pointless and does nothing to help physical mail. I have no opinion on the use of Augmented Reality on mailpieces.

Yes 51.11% 38.89%

No Not Sure

QR Codes were a hot topic just a few years ago, so we decided to ask our respondents if they were still in use, since it seems their usage has declined. Here’s what our respondents said:

42.55%

30 24.47% 20

19.15%

10 1.06%

7.45%

5.32%

We use QR codes the same amount as we ever did. We have increased our use of QR codes, and seen positive results. We have increased our use of QR codes, but have not seen the results we hoped for. We have decreased our use of QR codes. We quit using QR codes.

We have never used QR codes.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

A Look at the Mailing Industry as a Whole Environmental Concerns

It’s encouraging that the vast majority of our respondents report that their companies are taking environmental responsibility into account, even if there is more that some companies could be doing.

41.67%

Privacy Concerns

How well versed do you think your company is on privacy legislation in terms of customer information/data, on a scale from one to five, with one being very and 5 being not at all?

41.18%

18.82%

42.86%

25.88%

15.48% 11.76% 4

2.35% 5

My company is looking and acting on all possible ways to be more environmentally responsible My company is looking and acting on some ways to be more environmentally responsible, but could do more My company is not concerned and not taking any steps to be environmentally responsible

Electronic Communications

It’s no secret that more and more companies are communicating with their customers digitally instead of via physical mailpieces. So we wanted to ask our respondents what their opinion is regarding electronic communications.

44.16% 40.96%

A Look at Our Respondents’ Organizations What are the top challenges in managing a mail facility? } Budget/Financial Issues } Understanding by Upper Management } Volume Spikes/Changes; Timely Delivery of Mail; Personnel Issues (three-way tie)

40.96%

30 6.33%

Attitudes Toward Mail

9.64%

8.43%

How does management view the mailing operation?

15.19% 59.49% 18.99%

I embrace e-communications and have taken responsibility at my company to assist in or manage them

They understand the importance of mail and respect what we do

I embrace e-communications but have not done anything at my company to assist in or manage them

They don’t understand the importance of mail but are respectful of what we do

I am against e-communications because I am fearful there will not be a job for me in the future

They understand the importance of mail but disrespect what we do

I am against e-communications because I personally like information in hardcopy format

They don’t understand the importance of mail and are disrespectful of what we do

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

Other Thoughts on the Mailing Industry

9.88%

What is the overall attitude of your company toward mail?

12.35% 55.56% 18.52%

They understand the importance of mail and respect what we do

} The USPS needs to become more customer centric, encouraging their customers to continue mailing. In the 20 years I have dealt with the Post Office, they have never operated with the customer in mind. The overall attitude of the Post Office has been “our way or no way” and that attitude has been passed down to their employees. } [Mail] isn’t going away, but we will have to be smarter and less wasteful. We will also have to prove that we are putting out a product that more than pays for itself.

They don’t understand the importance of mail but are respectful of what we do

} The USPS worries too much about technologies. Just deliver the mail! They are becoming worse at their core function.

They understand the importance of mail but disrespect what we do

} I wish consumers understood the value of mail more.

They don’t understand the importance of mail and are disrespectful of what we do

} USPS needs to reduce pensions/retirement options. Corporate America has reduced these benefits and USPS has to follow in order to stay competitive. } Trying to be efficient has been difficult. Especially as regulations change that require equipment changes. 23.43%

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

HOW“B2ME”IS RE-SHAPING OUR INDUSTRY

oday’s consumers are making demands on businesses like never before. Demands that businesses understand their needs and desires, message/ market to them in their preferred manner, provide them with flexible purchasing and shipping options, and give consumers the tools needed for them to take control of as many facets of the process as possible. This “B2Me” phenomenon is all about “me” (the individual consumer) and how consumers are pushing businesses in ways they never have before. B2C and B2B marketing approaches have been around for years and largely become a way of life for most businesses. But “B2Me” is like the new kid on the block that

is shaking things up. The B2Me concept essentially is about marketing (and delivering!) to a specific individual (“me”) based on the needs and desires of that individual. But unlike B2C where businesses are pushing information to groups of like consumers, today’s consumers and their growing use of digital devices are leading the pull of B2Me by demanding that businesses better understand them as an individual and respond to their needs. B2Me Marketing. Wait, you say, haven’t we been doing B2Me for years? Isn’t that what direct mail/target marketing is all about? What’s the real difference between B2B/C and B2Me after all? They are both targeted marketing approaches, aren’t they?

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

Well, think of B2Me as targeted marketing on steroids, and as more of a “pull” strategy coming from consumer demands than a “push” strategy where businesses set the stage. Where B2C is marketing to a group of consumers with common attributes (e.g., female golfers aged 30-40 in the greater Washington, DC area), B2Me is marketing to a specific individual (there’s that “me” again!). B2Me goes beyond marketing in terms of engagement with the consumer; it also encompasses how businesses reach/ message the consumer, how they interact with that consumer, and even how they ultimately deliver purchased goods to the consumer. Ultimately it’s about building a relationship between the business and individual and continually engaging in ways

By Kathleen J. Siviter

to learn more about that individual’s needs and then respond to those needs. The tremendous growth in consumer use of digital devices is feeding the B2Me movement. Consumers are spending more time on digital devices and using them in ways that businesses are scrambling to keep up with. Businesses are trying to figure out the best ways to message consumers about their products/services and build consumer relationships, both in digital and physical spaces. According to PwC’s 2015 Annual Global Total Retail Consumer Survey, Retailers and the Age of Disruption, 47% of respondents had used a mobile/smart phone to make a purchase, compared to 30% two years ago. While more than half of the study’s 19,000+ respondents said they had never used a mobile phone or tablet for shopping, however, further survey results revealed that many respondents used mobile devices for pre-payment shopping activity such as comparing prices or locating stores. “[T]he smart phone is also a permanent connection between retailer and consumer that allows continual exchange and feedback from one to the other,” PwC reported. B2Me and Data. That potential feedback loop between the business and consumer is a critical component of B2Me, and one of many game-changers to the industry. We’ve all been talking about “big data” and what it means in terms of customer engagement for some time now, but B2Me can only be successfully accomplished by businesses with the mechanisms and analytics in place to collect meaningful data about consumer needs and translate that data into individualized consumer experiences. In B2Me, information equals power. Businesses need to obtain information to understand what consumers want and how/where/when they want it. Consumers today expect businesses to understand them but also to respect their privacy rights. Achieving that balance can be tricky. Teradata’s 2015 Global Data-Driven Marketing Survey: “Progressing Toward True Individualization,” looks at data trends and developments based on a worldwide

survey representing all major industries. “’How can we better acquire and retain customers?’ is the most challenging question selected by the largest percentage of marketing executives (38%),” Teradata reported, noting that “[i]t should not come as a surprise then that the types of insights from data that companies collect, as well as their top priorities, are centered around the customer.” “The focus on the customer has sharpened, thanks to individualized insights, compared with 2013,” it said.

to adjust to empowered, digital consumers who have more choices and options for delivery services. Accenture said that “successful courier-express-parcel (CEP) companies will focus on the recipient and deliver on consumers’ wish lists,” including more control over how/when/where their parcels are delivered, new secure, 24/7 delivery location options, and a flexible choice of delivery speeds/times at different price points. The growing concept of “deliver to the person” vs. traditional models of “deliver to the address” is changing the ways in which businesses and supply chain partners look at shipping. Instead of planning delivery to a specific address, consumers are looking for more dynamic and flexible options for delivery of their goods —focused not just on where they live, but often on where they are traveling, shopping, working or visiting. How is the delivery supply chain responding to these growing customer demands? In recognition that the traditional “one size fits all” model of delivery no longer works with today’s consumers, the top players in the parcel delivery market continue to develop tools for customers to take more control over their delivery preferences. We are also seeing new players attempt to fill gaps in the parcel delivery market or compete on price point, such as Uber — which recently announced expansion of its UberRush service, to include parcel delivery in the San Francisco area — and Amazon —which is testing a new Flex package delivery service which uses private drivers for delivery similar to the Uber concept. B2Me may have different ramifications in different countries, of course. According to the recently published 2015 Hermes International Shopping Survey conducted with consumers in the UK and Germany, one of the most popular delivery innovation ideas is that of the installation of a secure box outside the home to accommodate small/medium-sized parcels, accessed by a secure PIN number. Another popular idea

Consumers are spending more time on digital devices and using them in ways that businesses are scrambling to keep up with. Studies also point to the need for marketers to deliver individualized messages across multiple channels the consumer is accessing, such as website, mobile devices, social media, and more. Messaging needs to be consistent and relevant as well as individualized in the B2Me world. And with the technology and data points available to businesses today, new approaches are being formed to use data as predictive analytics to anticipate consumer behaviors and responses. B2Me Delivery and Returns. In no space is the B2Me phenomenon more apparent than the changes we are seeing in the delivery and return of purchased goods. Consumers want choices not only on the speed of delivery of their purchased goods (e.g., same day, next day, Sunday, timeblock specific, etc.), they also want choices on where their goods are delivered (home, office, central pick-up point, in-store, etc.), how delivers those goods and how, and where/how they can make returns of purchased goods and using what carrier. According to recently published research by Accenture, parcel delivery companies need

CONTINUED ON PAGE 25

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

By Jessica Dauer Lowrance

THE YEAR W

hat will 2016 hold for the mailing industry? Perhaps we are on the brink of another economic boom. Perhaps Congress will pass meaningful, postal legislation. We canâ&#x20AC;&#x2122;t predict the future with certainty, but we do know that certain things will happen in 2016. A new President of the United States will be elected. Mail volume will increase due to both Voteby-Mail and political campaigns. We also know that what the mailing industry faces today is significantly more complex 22

than what it did a decade ago. Today, we have technological advances that have given unparalleled access and information to mailers and mail service providers. But rapid advances in technology have changed the way we communicate with one another. Emails, texts, and Instagram have replaced the birthday card and hand written note. Households are increasingly making more payments and transactions online than in person or through the mail. Businesses are finding new and innovative ways to advertise with their customers through a mix of social media, online, and direct marketing.

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

SERVICE OFFERING AND PERFORMANCE The pressures this decline in mail volumes has caused both the Postal Service and the mailing industry are unprecedented. There has been a consolidation within the industry as companies either buy each other out or close down altogether. The shrinking of the mailing industry has meant a loss of jobs throughout the country as companies adjust to the lower volumes and excess capacity. The Postal Service has implemented several cost savings initiatives, as well, to remove ex-

AHEAD cess workhours and facilities through its Network Rationalization Initiative. The Postal Service decided to delay its Phase II consolidation until 2016. According to the USPS, â&#x20AC;&#x153;[t]he decision to defer plant consolidations was made to ensure the Postal Service continues to provide prompt, reliable and predictable service consistent with its published service standards.â&#x20AC;? These standards have become a hot topic within the industry since the beginning of 2015, with the change to the 24-hour clock. The 24-hour clock and the change in overnight service standards for First-Class

Mail and Periodicals have allowed the Postal Service to continue to consolidate operations throughout the country. Coupled with the introduction of load leveling to Standard Mail, Postal Service operations have been reduced substantially. With these reductions, however, have come many service standards issues. In looking ahead to 2016, the mailing industry continues to track mail, using the suite of Intelligent Mail barcodes throughout the postal network. A common compliant from the past year that the Postal Service needs to address is the unpredictability of

delivery. The tail of the mail has grown over the last year, as well as the number of early deliveries. It has become almost impossible for companies to predict mail delivery when predictability is key to competing with other channels, or be a part of a comprehensive marketing campaign.

PRICING, PROMOTIONS, AND INNOVATION Another aspect of predictability that is paramount to mailers is pricing. The mailing industry needs predictable and stable rates, as was mandated by the Postal Accountability

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and Enhancement Act of 2006 (PAEA). In 2016, the mailing industry, along with the Postal Service and the Postal Regulatory Commission will be facing two very important changes in prices. The first is when the Postal Service is required to roll back an extraordinary, exigent surcharge that has been in place since January 2014. The matter of this surcharge was intensely litigated, and eventually found its way to the US Court of Appeals for the District of Columbia. Subsequently, the decision regarding the surcharge was remanded back to the Postal Regulatory Commission for further deliberation, which has since determined that the surcharge must be removed following the Postal Service’s attainment of an additional $3.957 billion in contribution. The Postal Service has estimated it would reach this amount by April 2016. The Commission has ruled that it will allow the USPS only a 45-day notice to announce the rollback, which we can expected to happen around mid-February. There have been questions about whether or not the Postal Service will do an inflation-based price change at the same time as rollback. As of September 2015, the Postal Service has a CPI available to it of 0.311%. If the Postal Service elects to implement a price change at the same time as rollback, it would need to file a request with the PRC 90 days prior to the anticipated implementation date, which occur shortly after the first of the year. The second pricing event in 2016 that the mailing industry needs to prepare for is the Commission’s rate review. This review will focus on the system for regulating rates and classes for market-dominant products that was established under PAEA. There are differing opinions on the authority the Commission has in reviewing this system, but no one doubts that it will be a very resource intensive process, and will require the industry’s upmost diligence as it endeavors to explain why the current CPI cap setting mechanism, or some other variant, is imperative for the continued viability of mail as a medium for business communication and commerce. Other aspects of pricing that play an important role in mail decision-making

are the USPS promotions, as well as new products and innovations. The Postal Service has not announced (at the time of this article’s publication) its planned 2016 promotions. In the past, promotions have mirrored those of previous years with slight changes or requirements. In 2015, the Postal Service offered four promotions: Earned Value Promotion, Emerging and Advanced Technology Promotion, Color Transpromo Promotion, and Mail Drives Mobile Engagement Promotion. The Postal Service will expand its Real Mail Notification (RMN) concept to a pilot test in the fall of 2015 in the New York City area. The RMN service is designed to send participants who sign up for the program an email each day with pictures of the physical mail that is scheduled to be delivered later in the day. The USPS will use the same authentication process it uses today for its MyUSPS.com registration.

This bill is still far from enactment. While still in draft form, Senator Carper is actively seeking bipartisan sponsorship and swift action by the committee chairman to schedule the bill for hearings and mark-up. Once marked-up and voted out of Committee, it then must given floor time in the Senate for consideration by the entire chamber. Even if the Senate were to approve a measure, further action would require the introduction and similar processing of a like proposal in the House. Once passed, the Senate and House measures would have to have their differences reconciled through a joint chamber conferencing process in order to form one jointly approved measure to be sent to the President for his signature. Senator Carper’s bill, The Improving Postal Operations, Service and Transparency Act of 2015 (iPost), has yet to be recognized by Chairman Johnson. It seems highly unlikely that any legislation will pass in 2015. If reform is to happen at all, it would need to occur in 2016.

My only wish for 2016 is that the mailing industry joins together to finally voice its concerns around the key elements that affect our businesses day in and day out.

Looking ahead, the Postal Service is considering charging for the RMN service, if it decides to deploy it nationwide. Right now there is no plan to charge the recipient or mail senders for the service. But the Postal Service undoubtedly will consider charging the mail sender if the recipient opts to “click through” from their mail piece image to the company link.

LEGISLATION Everything contained in this article from pricing to service to consolidations are all being considered in a legislative package that was introduced by Senator Carper (DDE) this year. He believes that a comprehensive package of reforms must place the Postal Service on a firm financial footing, stabilize and improve service performance, allow for development of new products and services, and enhance service and operational transparency.

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

CONCLUSION

A dear colleague of mine recently joked that the mailing industry was a lot like a soap opera. We laughed as he regaled us with examples of how three years later we were still discussing the same topics as when he left: pricing, service, and legislation. We laughed a little harder and some nodded in agreement, while other shook their heads in disbelief, because he was right! We have been discussing the same topics, with practically the same folks since before PAEA was passed. Add in a little costing and you have the complete postal universe and the challenges we face every year. And it is no different for 2016. My only wish for 2016 is that the mailing industry joins together to finally voice its concerns around the key elements that affect our businesses day in and day out. ¾

JESSICA DAUER LOWRANCE, CAE, is the Executive Vice President for the Association for Postal Commerce. She can be reached at jlowrance@ postcom.org.

HOW “B2ME” IS RE-SHAPING OUR INDUSTRY CONTINUED FROM PAGE 21 was the notion of paying an annual delivery subscription fee to the courier vs. paying for each shipment (similar to the Amazon Prime model). Results from the recent Pitney Bowes 2015 Holiday Shipping Survey show that US consumers want options they can select to meet their shopping, shipping and returns preferences. The survey showed a 23% increase over last year in the number of respondents that said shipping options are an important factor in their overall shopping experience (up to 93%), and 88% of respondents find free shipping with a 5-7 day delivery more attractive than paying a fee for 1-2 day delivery. In addition to changes in the location and manner in which goods are delivered to consumers, the actual receptacle in which parcels are delivered also is a changing concept within the industry. The Postal Service has recently changed its standard mailbox specifications to accommodate larger pieces, and is also continuing to explore GoPost central parcel locker offerings. Others continue to experiment with retail location (e.g., “Click & Collect”) pick-up offerings, or 24/7 carrier-agnostic parcel lockers.

Learn More About How B2Me is Re-Shaping our Industry. “B2Me: Game Changers” recently was announced as the key theme for the PostalVision 2020 6.0 conference to be held March 15-16, 2016 in Pentagon City, VA (Washington, DC). The conference, which is the 6th annual PostalVision 2020 conference, will bring together a diverse group of global post and mailing industry thought leaders, service providers, suppliers, and businesses that use the mail for their communication and shipping needs. More information on the upcoming March 2016 PostalVision 2020 conference can be found on the group’s website (www.postalvision2020.com).

PostalVision 2020 focuses on discussions and activities around what the future needs of Americans are in terms of a postal ecosystem, and since 2011 has been engaging stakeholders around all pieces of the postal platform. As the “B2Me” evolution continues to shape how businesses market, communicate, sell, interact, and ship to

Publisher’s Note: The U.S. Postal Service requires the following statement be published for Mailing Systems Technology (Periodicals Class) mailings only. Mailing Systems Technology has had a (Periodicals Class) permit since January 1989. U.S. Postal Service STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION Required by 39 U.S.C. 3685 1. Publication Title ................................................................Mailing Systems Technology 2. Publication No. .................................................................1088-2677 3. Filing Date ........................................................................September 14, 2015 4. Issue Frequency .................................................................Jan-Feb, March Buyers Resource, MarApr, May-June, Sept-Oct, Nov-Dec 5. No. Of Issues Published Annually .....................................6 6. Annual Subscription Price (if any) .....................................Free 7. Complete Mailing Address of Known Office of Publication (Street, City, County, State and ZIP + 4)(Not Printer) 2901 International Lane, Suite 100, Madison, Dane County, WI 53704-3128 Contact Person ............................................................ Rachel Chapman, (608)442-5082 8. Complete Mailing Address of the Headquarters of General Business Offices of the Publisher (Not Printer) ....... 2901 International Lane, Suite 100, Madison, WI 53704-3128 9. Full Names and Complete Mailing Address of Publisher, Editor and Managing Editor (Do not leave blank) Publisher (Name and Complete Mailing Address) .............Marll Thiede, RB Publishing Inc., 2901 International Lane, Suite 100, Madison, WI 53704-3128 Editor (Name and Complete Mailing Address) ..................Amanda Armendariz, RB Publishing Inc., 2901 International Lane, Suite 100, Madison, WI 53704-3128 Managing Editor (Name and Complete Mailing Address).......... Amanda Armendariz, RB Publishing Inc., 2901 International Lane, Suite 100, Madison, WI 53704-3128 10. Owner (If the publication is owned by a corporation, give the name and address of the corporation immediately followed by the names and addresses of all stockholders owning or holding 1 percent or more of the total amount of stock. If not owned by a corporation, give the names and addresses of the individual owners. If owned by a partnership, or other unincorporated firm, give its name and address as well as those of each individual owner. If the publication is published by a nonprofit organization, give its name and address). (Do Not Leave Blank). Full Name .............................................................. Complete Mailing Address Marll Thiede ........................................................... RB Publishing Inc., 2901 International Lane, Ste. 100, Madison WI 53704-3128 Johnson Bank ......................................................... Johnson Bank 5201 E Terrace Dr Madison WI 53718 Gregory Rice .......................................................... Executive Management, Inc. 2901 International Lane, 2nd Floor Madison WI 53704-3128 11. Known Bondholders, Mortgages and other Security Holders Owning or Holding one Percent or more of Total Amount of Bonds, Mortgages or Other Securities............... None 12. (Must be completed if the publication title shown in item 1 is a publication published and owned by a non-profit organization). For completion by nonprofit organizations authorized to mail at special rates. The purpose, function and nonprofit status of this organization and the exempt

consumers, the postal ecosystem also will need to evolve to meet the changing needs of both businesses and consumers. ¾

KATHLEEN J. SIVITER is Director of Community & Brand Development, PostalVision 2020. She can be contacted at ksiviter@ursamajorassociates.com.

status for federal income tax purposes has not changed during preceding 12 months. 13. Publication........................................................................................Mailing Systems Technology 14. Issue Date for Circulation Data ............................................ May-June 2015 15. Extent and Nature of Circulation ......................................... B2B - Controlled a. Total No. Copies (Net Press Run).........................25,961 .......................... 27,001 b. Legitimate Paid and/or Requested Distribution (By Mail and Outside the Mail)

1. Paid Requested Outside-County Mail Subscriptions Stated on Form 3541.

(Include advertiser’s proof and exchange copies) ......... 0 .....................................0 2. Paid Requested In-County Mail Subscriptions Stated on Form 3541. .................24,462 ........................... 23,491 3. Sales Through Dealers and Carriers, Street Vendors, Counter Sales and Other Non-USPS Paid Distribution .............. 0 .....................................0 4. Other Classes Mailed Through the USPS ............. 0 .....................................0 c. Total Paid and/or Requested Circulation [Sum of 15b (1,2,3 and 4)] ..................................24,462 ........................... 23,491 d. Nonrequested Distribution (By Mail and Outside the Mail) 1. Outside-County as Stated on Form 3541 ........... 466 .................................489 2. In-County as Stated on Form 3541 ...................... 0 .....................................0 3. Other Classes Mailed Through the USPS ............ 20 ...................................20 4. Nonrequested Copies Distributed Outside the Mail ............................. 550 ............................... 2,400 e. Total Nonrequested Distribution ..........................1,036 ............................. 2,909 f. Total Distribution (Sum of 15c and 15e) .............25,498 ........................... 26,400 g. Copies not Distributed (See instructions to Publishers #4 (page #3) ........................................................................... 463 .................................601 h. Total (Sum of 15f and g) ......................................25,961 ........................... 27,001 i. Percent Paid and/or Requested Circulation (15c/fx100) .......................................................... 95.9%............................ 89.0% 16. Electronic Copy Circulation ..............................................................................Yes a. Requested and Paid Electronic Copies .................... 18,883 ........................ 18,196 b.Total Requested and paid Print Copies (Line 15c) + Requested/Paid Electronic Copies (Line 16a) .... .................... 43,345 ................................ 41,687 c.Total Requested Copy Distribution (Line 15f) + Requested/Paid Electronic Copies (Line 16a) ......................... 44,381 ................................ 44,596 d.Percent paid and/or Requested Circulation (Both Print & Electronic Copies) (16b divided by 16c x 100) ..........................................97.7% ........................ 93.5% 17. Publication of Statement of Ownership for a Requester Publication is required and will be printed in the November-December 2015 issue of this publication. 18. Signature and Title of Editor, Publisher, Business Manager or Owner: Rachel Chapman, Audience Development Manager, / September 14, 2015 I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties). PS Form 3526-R, September 2007

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

By Grant Miller

HARNESSING INNOVATION TO DELIVER HIGHER VALUE COMMUNICATIONS THROUGH MAIL y helping clients implement best practices for higher-value communications — such as making mail more colorful, interactive, engaging and integrated with digital communications — leading mail service providers are turning their customers’ bills, statements, and direct mail into powerful marketing tools. This is enabling them to have a different kind of conversation with their clients — one that appeals to the marketing influences that often shape a client’s buying decision. In today’s physical and digital world, personalizing the customer experience is an essential part of any successful engagement strategy. Mail service providers should encourage their clients, in particular marketers, to reinvent physical communications to make them more engaging and to leverage data analytics to make communications more relevant. Effective Utilization of Colorful Print Mail Research shows that colorful print mail can boost open rates of up to 70%. Employing high-quality, dynamic color printing capabilities can add value to every mail piece and advanced inkjet color with variable data printing leads to impactful communications and can extend marketing reach. In fact, inkjet systems have transformed print and mail markets by printing at a compel26

ling cost with speed and quality that is highly productive. Inkjet systems typically require extremely high volume print jobs to be most effective. However, recently introduced systems for medium and small volume levels are making inkjet more affordable and attainable. Leverage the Outside of the Envelope When using color, it’s important to think about the outside envelope as well. The logo or graphic printed on the front of the envelope strongly influences when and whether people open it. Adding colorful, relevant information to the outside of the envelope can double open rates. In fact, a study conducted by Leflein Associates of Ringwood, New Jersey showed that participants were more likely to open a mail piece with color text and graphics on the front before opening pieces with no headline or graphic. Given a choice of color graphics or black and white text, participants indicated they were 247% more likely to open envelopes with color graphics first. Fifty-seven percent of participants indicated they hardly ever noticed what was printed on the back of the envelope when sorting through or opening their mail. However, as with the front of the envelope, the study indicated that the presence of color text and graphics on the back was significantly more likely to influence their decision than black and white only.

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In this new print-to-mail environment, where inkjet technology delivers the speed, print quality and per piece affordability that mailers demand, organizations have the opportunity to create dynamic mail envelopes and reduce expenses at the same time. Additionally, organizations can eliminate the need for pre-printed forms and envelopes and are able to produce more engaging, colorful mailings for clients. Tap Into Transactional Mail Colorful mailings can come in many forms. Monthly bills and statements are often a valuable yet untapped marketing resource. Over 20 billion billing statements were mailed to US consumers in 2013 (the most recent year for which statistics are available). Many customers (typically 60-90% depending on the industry) continue to request printed statements. In fact, a recent study found that 84% of people believe they understand information better when they read print on paper. Furthermore, the US inspector general’s office analyzed three consecutive months of 2014 billing data for a major utility company and found that 91% of customers chose to receive their statements by mail. The content and design of bills and statements is critical to reducing customer confusion. The right content and design can also have a positive financial impact by lowering call center expenses and helping

ensure the business is paid on time. Similarly, document design is critical to maximize the impact of the transactional mail piece and use it to deliver timely, relevant and personalized marketing messages. The right balance of white space, color and shading is important to highlight key information. Organizations can also include targeted cross-sell opportunities with bills. Service providers and in-house shops that add revenue-generating cross-sell offers to statements often double response rates. Make Communications Relevant through Analytics Successful marketers use data analytics to create a complete 360-degree view of their customers and tailor the customer experience to their customers’ preferences and tendencies. For example, leading mobile telecom companies are monitoring their customers’ phone and Internet usage to provide more competitive rates and relevant offers. To help mitigate the impact of “bill shock” — a mo-

tivating factor that leads many consumers to switch carriers — these companies are using their data centers to warn consumers via text messages when they have exceeded their calling and data limitations. In the same billing cycle, they then use that information to print relevant offers directly on the bill, or billing envelope to encourage the consumer to move to a more suitable plan. Forward-looking companies are combining video technology with real-time data to deliver customers’ billing statements, providing a sound and motion experience with the physical statement. In some cases they are including on the statement a link to a personalized interactive video (PIV) that uses real-time data to highlight an opportunity. Software can transform data and information in real-time into engaging two-way opportunities, allowing one to grow sales and streamline service with real-time video content that customers will want to watch.

tegrated with digital channels, including websites, customer emails, mobile applications and social media to tell a consistent, personalized communications strategy across the entire customer experience. It has been proven time and again that combining digital and physical communications increases response rates and ROI. A recent InfoTrends study found that response rates increase 45% when direct mail is combined with a landing page, email address and mobile marketing. Within this hybrid mix of communications, postal optimization continues to be vital. Still, as postage is the single biggest cost of physical communications, it is key for organizations to harness innovation that can streamline the print/insert/sort process to uncover postal savings and ultimately build a world-class physical and digital customer engagement model.¾

Integrate with Other Mediums Physical mailings should also be fully in-

GRANT MILLER is global vice-president of operations and product management at Pitney Bowes.

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

CHOOSING THE OPTIMAL SOFTWARE FOR YOUR OPERATION

urchasing software can be big and scary because it’s probably not something you do regularly. It’s much like purchasing a car — you’ve finally realized you need to make the investment, but it’s been a long time since you last went through the process. If it’s the first time you are purchasing mailing-specific software, it can be like buying your very first car. You ask yourself, “What is 28

the best option out there?” Much like in the car-buying process, the answer to that question is, “It depends!” Before evaluating software, you must define your needs as they align with your organizational strategy. There are guidelines to choosing software; some are universal, and some are specific to mailing. Let’s start with universal… Like any major endeavor, this is a process. A phased approach might look like:

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 DISCOVER: What problems am I trying to solve? What are my priorities?  DEFINE: What are my requirements?  DETERMINE: What solution best meets my requirements? In the Discover phase, start by conducting an internal assessment or even a SWOT (strengths, weaknesses, opportunities, threats) analysis to determine factors like end-user skill levels, IT capabilities, local job market, direction of the

By Anita Wood organization, production capacity, resilience to economic change, executive sponsorship level, and so forth. You don’t need to do this on your own; you should leverage existing information and expertise from across your organization. If possible, engage an objective third party for assistance. If you have limited funds, be creative and leverage sources like experts at your local university or industry organizations. The goal is not to correct every weakness or seize every opportunity but to understand your environment and prioritize your needs. This can be a long process, so be sure to compare your results with the organizational strategy; determine which items can support the strategy as is, and which can support it with improvements or investment. If the identified changes impact the purchasing decision, consider making those changes before proceeding. For example, if you identify significant weakness related to your end-to-end process, correct the process first, rather than purchasing software as an attempt to fix those issues. A software solution will not solve process issues! An especially important outcome of the SWOT analysis is that you will have a true understanding of the skills available in-house and whether those skills adequately support the future direction of the organization. For example, if your organization wants to expand and offer more end-to-end services, what will your current staff need to help make that happen? These are the kinds of questions you should ask when assessing SWOT results, and you should loop back to the question of which problem you are trying to solve; you probably need to refine that problem at this point. A strong warning here: ensure you have identified the correct problem, or you will find yourself solving symptoms rather than the root cause. With these discovery questions answered, you can begin to define requirements. In the Define phase, engage a cross-functional team of stakeholders, such as end

users, IT, business users, report consumers, executive sponsor, and perhaps even a trusted partner or customer to define requirements so that you are less likely to miss important requirements. Of course, you’ll want to leverage this team of stakeholders to first confirm the problems being solved. Another benefit of working with a cross-functional team early in the process is that you are much more likely to get buy-in across the organization; the entire organization has ownership and input and is thus less resistant to change. I can’t emphasize enough that you are not simply buying software, but investing in a solution and developing a relationship.

ability and support response time. Existing data will also help you define how to measure success beyond simple ROI.

Looking Ahead to the Long-Term As you define your requirements and align them with your SWOT findings and organizational strategy, don’t forget longterm considerations. Scalability is just one example, not just from a technical perspective, but also from a licensing perspective. You might think you have only a few end users of the software. But will that always be the case? Can the software and the vendor grow with you? You can ask the same about your data volumes — will they grow? Back to my car-buying scenario… I have an extremely steep driveway and live where winter is snowy and icy. The sporty little cars I test drove during the summer did not fare so well on the driveway when the true test of winter arrived. Plan for that steep driveway, even if timing of the purchase does not permit test driving when it’s covered in ice. Once you have defined your requirements, it’s time for the Determine phase. A request for proposal/information (RFP/RFI) is an effective tool to gather information from potential vendors. Develop questions that will yield answers that actually help in decision-making. Just like the car salesperson will use your questions to help learn about you and your needs, a software vendor will use the RFP to begin learning about your business problems. You could invest in expertise to lead the RFP process, but the work you’ve already done to define requirements is a great start. The SWOT is particularly helpful because you want answers that demonstrate how the software or vendor will fit despite weaknesses and to leverage strengths. You can also use lessons learned from past software selection experiences to help build the questions. Once you have narrowed potentials to a short list, you should test each solution using your own data. Just because the demo was sexy does not mean the software meets the true tests of your environment, just like

I can’t emphasize enough that you are not simply buying software, but investing in a solution and developing a relationship. Requirements should address software features and functionality, including multiple user support, system requirements, performance, and user experience. But they should also address critical elements like support, documentation, training, thought leadership, culture, and financial return. As for the sticker price of the software, it falls into the overall list of requirements, but it should never be the driving factor for an investment with such a significant impact on the organization. Determine the savings you can gain from the software, both from a process perspective as well as cost — in the case of mailing, postage — savings; those numbers are more important, alongside other value areas such as quality of support. For example, your organization likely has data showing the cost of system or production floor downtime. Use that data to define required metrics and performance. If you save $20,000 by purchasing software XYZ, but one hour of downtime costs you $100,000, the upfront savings become less important than software reli-

www.MailingSystemsTechnology.com | NOVEMBER-DECEMBER 2015

the sporty cars looked good at first, but... A very good method is a proof of concept because not only do you see the solution in action, but you also have the opportunity to test the quality of support. Choosing the right vendor is important. What’s the worst that can happen? You will buy the wrong solution and feel very lonely when it comes time for implementation. The sporty car you’re driving might be fun and cool at first, but when winter hits you will feel a great deal of pain and embarrassment.

Mailing-Specific Guidelines We’ve discussed just some of the universal guidelines to choosing software. Now let’s discuss guidelines that are specific to mailing solutions. If you haven’t done so, follow your mail piece through the entire process; create a workflow diagram and analyze it with your cross-functional team. This should happen in the Discover phase. Where are your inefficiencies or problem areas? This might sound easy, but it is not uncommon to become so accustomed to a process that you don’t notice the problem areas. For example, are there points in your process where you must stop and perform a task manually? It might seem perfectly normal to walk a job folder down the hall to the next person in the process, but it doesn’t have to be this way — you are missing out on efficiencies. The right vendor can guide you through this process or help you analyze your findings. Yes, the vendor might have natural biases, but they are experts who have observed many mailing operations and have seen both the good and the bad; they will notice things you might not have considered. Again, this is a good way to test drive your relationship with the vendor. A common question relates to volume. Sometimes volume of mail you are processing is key to the decision, but sometimes not. It might be more important to process certain mail classes, achieve fast delivery, or meet new customer demands. This question is unique to your organization and should be discussed internally and with the vendors you are considering. When shopping for cars, a good practice is to check third-party sources such as safety ratings and consumer ratings. Likewise when shopping for mailing solutions,

you need to consider certifications, which ensure that the solution has been officially approved by the USPS and meets regulatory standards. If you want to improve the quality and deliverability of your list information, you’ll need a CASS-certified solution. If you want to get the lowest possible postal rates and generate all required USPS documentation, you must presort your pieces using PAVE certified software. Perhaps you want to provide value-added services by handling parcels, so you might benefit from an eVS certified solution. However, certifications do not tell you everything. If it is important to have ample time to analyze the impact of regulatory changes on your costs and process, select a certified vendor who delivers regulatory releases in a timely manner with accurate interpretations of the regulations. How can you learn this and other unpublished information about vendors?

be found in places like the vendor’s product roadmap or its annual report. One of the most important things a vendor can offer you is expertise. The internal assessment you conducted becomes important again because you need to be honest about your level of mailing industry expertise. Does your staff have mailing expertise? If so, do they have the capacity to watch both your roadmap and the roadmap of regulatory bodies such as the USPS? Are you able and willing to invest in participation with industry associations and regulatory bodies in order to gain that expertise? This is a huge investment of time and, ultimately, money. If this does not align with your direction or capacity, or you are unable to ramp up quickly, then you need software that is backed by industry involvement and expertise. Regulatory changes are frequent and significant, so a trusted vendor will serve as your voice and enable you to focus your efforts on core competencies and revenue-generating efforts. You’ve made it through the Discover, Define, and Determine phases and answered questions like: What problem am I trying to solve? What are my requirements? What solution best meets my requirements? Regardless of how prepared you think you are to make that purchasing decision, you’ve only just begun! You will choose a vendor who learned about your business, processes, problems, and opportunities, so leverage that relationship as you move forward. Your requirements and strategy will evolve, as will the industry and regulations, so the vendor will be critical in providing the ongoing support and expertise. Happy driving! Happy mailing! ¾

A common question relates to volume. Sometimes volume of mail you are processing is key to the decision, but sometimes not. It might be more important to process certain mail classes, achieve fast delivery, or meet new customer demands.

Researching vendors is very important. What do you want in a vendor? This must be defined and should be driven by your SWOT analysis and strategy. For example, if your organization prefers or requires a single vendor, you need to understand the full product line of each vendor and whether they provide endto-end solutions. Ask references about their experience. You can do this in many ways, including networking at relevant conferences. But be sure to ask the right questions and probe for details. You will find people who prefer a particular solution; your job is to find out why, remembering to ask for both strengths and weaknesses of the solution and compare those answers with your requirements. Other valuable pieces to the puzzle might

NOVEMBER-DECEMBER 2015 | www.MailingSystemsTechnology.com

ANITA WOOD, Senior Product Manager at Satori Software, has over two decades of experience in technology industries, including IT and software development, and in various sectors (manufacturing, government, advertising, retail petroleum systems). She has been in roles such as development analyst, project manager (PMP certified), test engineer, and product manager (Pragmatic Marketing certified). She has also been a university professor, specializing in technology and strategy.