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Jul 1, 2005 12:00 AM


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Postpress

Printers are expanding into the mailing/fulfillment industry in an attempt to significantly increase their bottom lines. According to industry surveys, approximately 20 percent of all printers have determined expanding into the mailing/fulfillment industry—including database management—is the No. 1 way to add value to their services. It is a logical move for printers to make, because a good deal of printed material is sent on to a letter shop or a mail house for processing. Logical in concept? Yes. Easy to accomplish? Maybe.

Mail: a three-legged stool
Mail has three critical components: printing/mailing industries that produce mail pieces; the U.S. Postal Service (USPS), which delivers those pieces to recipients’ mailboxes; and mailing software that drives mailroom and USPS equipment. If you do away with any one of the three critical legs, the mail collapses. They are related to one another, and you must incorporate that into your printing organization if you want to expand into the mailing industry successfully.

Develop a strategic plan for mailing
An essential element in the development of a strategic business plan is to identify your company’s SWOTs: strengths, weaknesses, opportunities and threats.

Strength: Have the essential elements of the process in place. You take the order from a client, produce the printed pieces, package it, produce shipping documentation and then deliver it to the client. To add mailing services, you incorporate name and address printing into your production process. Packaging still will occur, but you will package the job differently according to postal rules and regulations. Instead of delivering it to the client, you’ll deliver it to the postal service’s acceptance docks. You still will present documentation, but that documentation will be generated according to USPS requirements, using your mailing software.

Weakness: Ignorance. The USPS is one of the most technologically advanced institutions in the world. It is in the business of moving mail—none of its facilities are designed to store or warehouse mail. Therefore, mail must move through the system as quickly as possible. Every postal program, every piece of equipment and every requirement is designed to facilitate the efficient and accurate movement of mail from the acceptance dock to the mailbox. So, when a USPS facility receives mail that can be processed on high-speed equipment, it extends discounts. There are more than 3,000 postage discounts available to claim in today’s rate structure. The onus is on you to take those discounts and save that money, because no one at the postal service is going to tap you on the shoulder as you are leaving and say, "Did you know...?"

Opportunity: Simply put, it’s the ability to provide "concept to doorstep" service to your print customers. By streamlining the process for your client, you are giving them a single point of contact.

Threat: Financial exposure. Colossal penalties and fines can be incurred with an improperly prepared mailing or postage discounts claimed on a mailing that does not meet the necessary requirements. Typical penalties run in the tens of thousands, and penalties have been assessed that run in the millions. If you err in a print job, you can reprint it for your client. If you make an error in mail preparation for that printed piece, you might incur the expenses of reprinting, remailing (including postage) and penalty fees. Ignorance is no excuse. There is no crying in baseball and there are no refunds in postage.

Purchase mailing software
The USPS has installed the newest computerized mail processing machines. Mailing software enables you to properly format and prepare mail so these sophisticated pieces of equipment can be utilized. This reduces the USPS’ internal costs so you can enjoy significant postage savings, experience considerable delivery efficiencies and successfully compete in today’s mailing industry. Look for a mailing software vendor that:

  • Offers a variety of products with features to handle all aspects of mailing list database maintenance, including list hygiene, identification of duplicate records, multiple formats supported for file import/export, case conversion and variable-data support for personalization of one-to-one marketing documents.
  • Can supply current Coding Accuracy Support System (CASS) software certified by the USPS to encode mailing list addresses with ZIP+4 information, enabling you to print delivery-point barcodes on mail pieces. (See http://ribbs.usps.gov/files/vendors/cassn01.txt.)
  • Can supply current PAVE (Presort Accuracy Validation and Evaluation) software to presort and prepare mailings for presentation to the USPS while claiming the greatest postage discounts available. Caution: Make sure the product you purchase is PAVE-certified for the class and category of mail you intend to process. Research the available products carefully and find the one that is right for your company and your mail. (See http://ribbs.usps.gov/files/vendors/PAVEGLIS.PDF.)
  • Provides users with features and capabilities that allow them to operate their mailrooms with ultimate efficiency, including options for visual and machine-readable bundle markings, generating mail in reverse sequence to accommodate finishing processes, and writing presort information to an electronic file for custom processing by other mailroom equipment (high-speed lasers, intelligent inserters, etc.).
  • Has formed strong alliances and/or partnerships with respected mail hardware and document handling system vendors with an established client base you can call freely for references or with questions.
  • Offers quality technical/customer support and provides user groups or online user forums; provides thorough and easy-to-comprehend documentation for their products; and offers extensive education and training programs for new clients, as well as ongoing training as needed.
  • Keeps its clients informed about industry trends, product releases, enhancements and compliance with USPS standards. Mailing software developers are required by the USPS to provide their users with updated software every other month or risk the loss of postal certifications. In the case of mailing software, this usually means identifying new sorts, rules, preparation requirements and, more frequently than anyone likes, new postage rates. Take advantage of the work the software companies do in deciphering the "postalese." Frequently you will identify changes in USPS requirements that could affect your bottom line. The software vendor is giving you a "heads-up" and can help you avoid processing and acceptance problems. And the best part is, this is not information that you have to go looking for—it gets delivered to you on a regular basis.
  • Offers a product with a price point that allows you to be competitive in your marketplace. "If it costs more, it must be better," does not hold true when it comes to mailing software. Most mailers today (in fact, the mailer you might be trying to win business from) use PC-based products with a $2,500 to $10,000 price range. Computers that perform ZIP+4 encoding, database maintenance, deduping and postal presorting at speeds of millions of records per hour have plummeted in cost. Even if you are using a mini or a mainframe for print processing functions, do not look first to purchase mailing software that supports those operating platforms. It will be too expensive (in the $70,000 to $100,000 range) and you will be forced to charge far higher fees than those charged by the competition, just to recover your costs. Instead, purchase PC-based products that are USPS certified, perform your postal processing and then port the files back up to the mini or mainframe for output. Start with that smaller investment and only move up in price if your needs are not being met. Don’t price yourself out of the business before you even get into it.

Use your ZIP+4 encoding software to generate revenue
CASS-certified software is the cornerstone of barcode discounts—ZIP+4 encoding a database can increase response rates to direct mail campaigns and improve mailing deliverability. It identifies addresses in your database that, according to the USPS, are undeliverable. Many software packages also provide demographic information as part of the encoding process, identifying the county, building type and congressional district.

Develop a mail piece design process
The mail piece design and planning process is a series of decisions that represents a balance between the purpose of the mailing and the potential postage costs. A client might need a letter-size mail piece to successfully convey its message, yet prefer the lower postcard postage rates. You can delight that client by pointing out that properly designed letter-size mail pieces can qualify for additional automation discounts. Remember, your mailing software will perform the proper presort on your mail piece whether your design is a card, letter or flat.

Acquire mailroom equipment
Capital investment will be required for a few pieces of equipment. From addressing to inserting, bundling, strapping and metering, the list of new purchases can get lengthy. Or, you might be able to retrofit equipment you already have on your production floor. Look to your mailing software for direct interfaces that can drive or control your mailing hardware. Caution: Carefully research the maintenance and service equipment manufacturers in your region provide. Talk to or, better yet, visit other users and ask to see the equipment in action before making a decision to purchase.

Educate your staff
Particularly focus on that one salesman who can never say "No" to a customer! Your salespeople and your CSRs must understand the risks associated with the responsibility of moving the pieces you print for a client into the USPS mail stream.

USPS Mail Piece Quality Control Certification: This provides one of the very best education tools available today. The course is well designed and all-inclusive, with "postalese" converted to easy-to-understand text and illustrations. More important than explaining postal services and requirements, the course provides complete reference materials that can be used repeatedly in the future, enabling a proactive approach to mail. After completing this course, you will better understand USPS acceptance requirements as they relate to mail piece design. In addition, you will have enough understanding of presorted mailing process requirements to analyze discount and payment options for your clients. (See http://ribbs.usps.gov/files/mqc/MQCORD.PDF.)

Modify billing and proposal procedures
There are charges specific to each mailing process, and the range can be dramatic. It’s well worth the research time and effort. Clearly identify which mail-related services you can provide to your customer and what your costs are.

  • Can you afford to offer the service or perform the presort?
  • Will the costs be passed straight through to the customer or will you treat them as a value-added service and absorb the costs? A mailing industry rule of thumb: Do not bill for postage. The USPS will not allow a mailing to be dropped at an acceptance dock unless the money in a postage account is sufficient to cover the total postage for the mailing. Give this responsibility to your CSRs—the job does not move onto the mailing production phase unless the money is in the postage account.
Make postage a separate line item on your invoices. Use your mailing software to carefully research the postage discounts that can be claimed from a customer’s mailing list for the class and category they intend to mail at before writing a proposal. Postage presort discounts are based on quantity and density of addresses going to geographic areas by ZIP codes. For example, if a mailing list has 10,000 addresses distributed across the nation, the presort discounts (if any) will be small compared to a list of 10,000 addresses going to a few ZIP codes.

Alter estimating to include USPS and transportation costs
Entering the mailing business can increase in your internal production and transportation costs significantly. Mailings must be prepared using trays, tubs and containers that are provided by the USPS. Your trucks must pick up this equipment at specific locations, sometimes by appointment. Your mailing software can tell you how many trays or containers are needed for a mailing, but you have lost the luxury of using the container of your choice. Don’t underestimate the costs associated with this requirement.

Additionally, careful calculations must be done when transporting a mailing to the USPS for acceptance. Mailings must be presented in their entirety with appropriate documentation and postage. You cannot drop off a partial shipment and say, "I’ll be right back with the rest." Again, your mailing software can perform those calculations for you and split the mailings to accommodate multiple trips. Also gone is your driver’s ability to pull up to a client, drop the shipment and return to your plant. A driver might wait minutes or hours to drop a mailing at a postal facility, which adds to your cost.

Develop a quality assurance program
Establish minimum required standards and procedures for your employees to use in performing mail preparation services. Clearly identify what procedures will be followed for database maintenance, handling of confidential information, changes to mailing lists, postage accounting, etc. Show your clients that quality controls are an essential part of your services.

Get informed and get involved
Mailers today need to be informed. If you’re going to move into mail, you should join the Mailing and Fulfillment Service Assn., MFSA. It’s the true class of the field as far as mailing organizations go—the price of membership will be some of the best money you will ever spend. (See www.mfsanet.org.) Expansion into the mailing and fulfillment industry is an attractive proposition for most printers. Developing and enhancing the relationship you have with the right mailing software vendor could lead to across-the-board ROI. It can be the key to increased sales and greater profits for both your company and your print clients.


Mary Ann Bennett is president and CEO of The Bennett Group, Inc., a mailing consultancy based in Rochester, NY. Contact her at maryann@the-bennett-group.com.