Thriving under the latest postal rate increase

Concerned about increased postage? Learn how to save money on your mailings through other available resources.

Thriving under the latest postal rate increase

For many business mailrooms, 2006 will bring new challenges and opportunities from offsetting increased postal rates to discovering new ways to better understand and optimize your mailstream.

As of January 8, 2006, the average postage rate increased 5.4% for all classes of mail. The rate increase is reasonable: it will help maintain affordable universal physical mail service while encouraging the United States Postal Service to embrace technology to improve efficiencies.

The downside to the increase is higher costs for business mailers large and small. For example, a company that currently spends $5,000 per month on postage, or $60,000 per year, will pay nearly $3,240 more annually with the new rates – but only if operations continue in a “business as usual” mode.

The following are some guidelines to help businesses of every size take advantage of available resources and offset those increased costs.

Address hygiene
With approximately 40 million USPS customers filing permanent Change of Address cards each year, maintaining updated address information is one of the most critical aspects of your mailing system.

According to industry estimates, each envelope bearing the words “undeliverable as addressed” passing through a mail center costs the sender between $3 and $11. It’s not uncommon for a large corporation to lose millions annually as a direct result of an outdated customer database. These losses come from wasted postage, mailing materials, and lost productivity.

Work with a postal consultant to get address management software that will eliminate duplicate or undeliverable addresses. Your best bet is to use an addressing correction system that stores every deliverable address in the United States and automatically converts them into the standard USPS format. You can combine this technology with a program that identifies recently moved contacts via the Internet and merges that information into your database. The ROI for this software can help further down the mail process when it comes to qualifying for presort discounts.

If you use an outside vendor to manage your mailing lists, make sure they comply completely with USPS Move Update requirements. Otherwise you may wind up taking discounts you’re not entitled too, as well as absorbing the high costs of returned mail.

USPS special services
Visit the USPS web site and take advantage of new special services that can help your bottom line. For instance, the USPS offers an electronic version of the return receipt for certified mail. After the proposed rate change, the cost difference between electronic and paper return receipts will be a sizable $0.50 apiece. If you process high volumes of certified mail, you can save considerable funds by switching to electronic return receipts. You can also install mailing system software that orders and retrieves electronic return receipts to automate the process and increase productivity.

Folding/inserting equipment
You can increase productivity and save money by automating the folding and inserting of your mailings. Tabletop folders and inserters can be up to 20 times faster than manual processing. At that rate, it doesn’t take long to see a significant ROI on the initial investment in equipment.

Carrier selection
Choose carriers carefully. Companies commonly overpay for unnecessary services – as much as several dollars on a single parcel -- simply because they don’t know all their options. Look into software that provides the ability to “browse” different services and associated costs based on the weight, destination, and required delivery timeline of the mailing materials.

Postage discount programs
Even small-volume mailers can take advantage of the USPS workshare discount programs to help strengthen their bottom line. One way to obtain a workshare discount is to outsource part of your mailing process to a firm that can presort the mailings. This allows you to meter your first class mail at a discounted rate of nearly 5%. A presort facility can then pick it up for free and process, barcode, and deliver the fully sorted mail to post office.

With all these products and services available to upgrade your mailing processes, there is no need to fear the impending USPS rate change. It simply challenges businesses to work smarter and polish their mailing processes.

Adapted from an article by Kevin S. Weiss, President, Mailstream/the Americas, for the Global Mailstream Solutions division of Pitney Bowes, Inc, in Mailing Systems Technology November - December 2005 issue.

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