The Cost of Undeliverable Mail

By Paul Johnson, President CMS – Complete Mailing Solutions

How Much Is It?

Have you stopped to consider the real financial impact of undeliverable mail?
We’ve blogged about how mail piece design can impact deliverability of your mail and provided guidelines that will help ensure your mail gets delivered. If you are like a lot of companies, once a mail piece is returned, you simply change the address and resend it – right? Just more paper and postage costs, that’s all – but is it?

Undelivered envelope with yellow sticker

Undeliverable as addressed (UAA) mail is a costly problem for both mailers and the Postal Service alike. In 2016 alone, nearly 6.6 billion mail pieces were undeliverable*. Mailers spend over $20 billion on UAA mail, while direct costs to the USPS is over $1.5 billion/year**.

If you think the only cost for undeliverable mail is reprinting and remailing costs, you’re in for a big surprise. There’s much more to the story than that. For mailers, there are both tangible and intangible costs related to undeliverable mail:

Tangible

  • Statements and late notices, if applicable
  • Labor to prepare mailings, research the correct address and regenerate and re-mail the communication
  • Delayed payment of invoices and its impact on cash flow


Intangible

  • Lost sales because the communication was never received or received too late to act upon.
  • Customer Relationship Management (CRM) impact -damaged customer relationship and reduced goodwill from customers who are irate from not receiving correspondence in a timely manner and/or receiving late fees.


The bottom line: Companies can easily spend $25 or more per piece of returned mail. How can you determine your cost? The USPS Inspector General sited a simple way of determining this. Take the annual value of a customer and divide it by the customer’s expected response rate. For example, if a Customer is worth $600 annually and typically responds at a 10% rate, the cost of the UAA mail piece is $60 – a far cry from the cost to reprint and re-mail the original communication!

Improving Deliverability


One of the most significant factors impacting mail deliverability is address quality. With 18% of the population moving each year and 20% of businesses moving or failing, it is critical to keep addresses up-to-date to keep deliverability high. Address quality software can identify and update your customer file before your mail piece goes out the door

Need a solution to improve your mail deliverability? Click here for data quality options or call us at 303-761-0681

Details

10 Common Mistakes in Mail Piece Design

By Paul Johnson, President CMS – Complete Mailing Solutions

What they are and how to avoid them

Millions of dollars are spent on mail to customers and prospects each year. Yet nearly 6.6 billion mail pieces were undeliverable in 2016* and most of it was avoidable. In addition, a significant portion of delivered pieces did not take advantage of available discounted rates. That begs the question… why pay for mail that doesn’t reach its destination or costs more than necessary?

You can avoid most of these costs by understanding the USPS mail design requirements. Some deliverability issues can also be avoided through address correction but that’s a topic for another post.

Fact...
If you don’t follow the USPS’ mail design requirements, you’ll either pay more for postage or your mail will not be delivered.

 

Because understanding USPS requirements will keep you from throwing away your mailing dollars, we prepared a summary to help you avoid common pitfalls. For those who want to dig into the nitty gritty, you can read a detailed USPS report here.

  1. Not meeting minimum mailing dimensions
    Minimum size of any mail piece is 3.5″ x 5″. Anything smaller is considered unmailable by the Post Office.
  2.  

  3. Dark/Black background color on mail pieces
    Dark and black backgrounds should not be used because addresses and barcodes can’t be read by USPS automation equipment. Even dark borders or edges can affect processing and are
    not recommended for mail pieces.
  4.  

  5. Screening/Imaging
    Show-through from the envelope lining (e.g., a security tint) or from an insert that is visible in the addressing area can impact whether barcodes can be read by automation
    equipment.
  6.  

  7. Placement of return address on Letters and Flats
    The return address on a letter-size piece should not appear in the OCR (Optical Character Recognition) Read Area, but be placed above 2-3/4” from the bottom of the mail piece (green area on the example) and extend no more than half the length of the envelope.
  8.  
     

  9. Text or graphics in the Barcode Clear Zone
    The Barcode Clear Zone extends 4-3/4” from the right edge and 5/8” from the bottom edge of the envelope. This is where the USPS places its automation barcode. There should be no printed numbers, text or graphics in this area to interfere with scanning equipment.
  10.  

  11. Postcard design
    Postcards must fall within the following dimensions:

    • Minimum: 3.5″ x 5″
    • Maximum: 4.5″ x 6″

    Vertical and horizontal formatting requirements apply. More details

  12.  

  13. Insert shift
    The complete address and/or barcode must be fully displayed at all times, even if contents shift. There must be a minimum of 1/8″ space on either side of the barcode and address within a window.
    There are a number of requirements/restrictions on placement of the barcode in an address.
    More details
  14.  

  15. Folded self-mailer construction
    Self-mailers are just that – they are self-contained and mail without an envelope. Gatefolds, Accordion and Z-fold are non-machineable and qualify for discounted pricing.
    Additional guidelines for self-mailers are outlined in the detailed information or in the USPS DMM, Section 201.3.14,
    which can be viewed on the USPS Website.


Two additional mistakes are difficult to summarize briefly in the space of this blog:

  • 9. Address placement on Flats
  •  

  • 10.Requesting uniquely assigned Business Reply Mail (BRM)Zip+4 codes

You can find information on these two topics in the complete report.

Becoming familiar with the design requirements of the USPS is vital to ensuring your mail can be delivered and automation discounts are applied. Having the right equipment and processing tools to meet mailing standards is critical. Check out our addressers, mail machines, folder/inserters and document processing options for more information.

If you need help, contact us at 303-761-0681 or the USPS MDA Support Center at 855-593-6093.

*USPS UAA Rollup 1998-2016

Details

Why Isn’t the U.S.Postal Service Profitable?

By Paul Johnson, President CMS – Complete Mailing Solutions

“Have you ever wondered why the USPS isn’t profitable?”

What if Congress passed a law requiring businesses to prefund employee healthcare and pensions for 75 years in advance? Can you imagine how that would impact your company financially? It’s interesting that Congress requires 100% funding for 75 years in advance for the USPS when,according to The Motley Fool,the U.S. Government is only 42% funded.

But, wait, there’s more…

  • What if you couldn’t increase your pricing based on changing market conditions (such as rising fuel costs or competitive pressures)?
  • What if you were required to distribute your goods/services to a broader market, even if that market was unprofitable?

If you’re like most executives you’d say: “No way! We can’t survive in that environment!”

Welcome to the Postal Service! These are just a few restrictions that the USPS must grapple with. Each of these individually would have a significant hit to the profitability and sustainability of a company. Collectively, they’re nearly untenable.Profitability image shown by magnifying glass and chart
Remember, the USPS does NOT receive and revenue from the American taxpayer, their only source of revenue is for products and services!
And the list goes on:

  • They cannot add a fuel surcharge to pricing (as FedEx and UPS can) to maintain profit levels.
  • They are required to provide service to people and businesses in remote areas even though it may be highly unprofitable. In fact, the USPS delivers packages for UPS and FedEx in geographic areas UPS/FedEx consider unprofitable.
  • Although the USPS is not a government entity, it is governed by Congress and the Postal Rate Commission (PRC), which restricts potential avenues for expansion into other products and limits competition with other companies (such as UPS and FedEx). Congress has been influenced by competitors to get the USPS to abandon new products. Here are some examples cited by The Motley Fool:
    • Plans to develop an online payment system in 2000 were scuttled when the Internet industry cried foul.
    • Public copy machines.
    • In-store sales of phone cards and money transfers.
    • Selling postal meter cartridges (Pitney Bowes objected).
  • The USPS is required to invest exclusively in government bonds while private companies can invest in a wide variety of securities to improve profitability.
  • The USPS is forbidden by law to lower prices to get more business.

There is much criticism of the Postal Service for losing money. However, without unreasonably burdensome restrictions, it would likely be a different story. Not only do many of these restrictions not make sense, they directly undermine the success of the USPS. Many would have us do away with the Postal Service altogether. Yet, they provide a tremendously valuable service to our country across a huge geographic expanse and at very low rates. Services in Europe that are comparable to our
first class
delivery, cost at least two to three times more than in the U.S. Many projections around elimination or privatization (full or partial) of the Postal Service paint a picture or greatly increased prices and decreased service levels and quality.

So, what’s the answer? How about if we consider a simple solution? What if we just got out of the way (by relieving the USPS of unnecessary burdens) and let them run their business as a business?

Details

How Does the Postal Service Change Rates?

By Paul Johnson, President CMS – Complete Mailing Solutions

“Why doesn’t the USPS just implement a larger rate increase and get it over with?”

How many times have you or someone you know said this about postal rates for office postage meters and stamps? Postal rate increases (and the rare decrease) are often so small and frequent that it doesn’t seem worth it. People often wonder if the costs of implementing a one or two cent increase outweigh the resulting revenue increase. Yet nearly every year (with some exceptions) we see rates go up a penny or two.
What most people don’t know is that the USPS is severely constrained by laws and regulations including the Postal Accountability Enhancement Act (PAEA). Many also don’t realize that the USPS is not a department of the US government. In other words, it isn’t organized under any of the executive cabinet departments. It was reorganized in 1971 under the PAEA, to be an independent establishment of the executive branch of our government. As such, it has neither government funding nor the freedom to set its rates and policies in the ways that a free-market, for-profit corporation does. Considering these and other factors outside the purview of this post, they’re placed in a situation in which it’s quite difficult to succeed.

Interesting facts about the USPS

  • The USPS is not tax funded, but is an independent establishment of the federal government. Revenue is earned exclusively from product sales. Learn more here.
  • $71.5 billion in revenue for 2016 would put it in the top 40 Fortune 500 companies if it were independent.
  • The Postal Service is the 2nd oldest federal department or agency. See the history of the USPS


The USPS is governed by the Postal Rate Commission (PRC) and, therefore, can’t make independent decisions about what rates should be (more on this in a future blog). So that begs the question…

How are rates determined?

The Postal Service operates two lines of business: one for “market dominant” products (First-Class Mail, Standard Mail, Media Mail, etc.) and one for “competitive products” (e.g., Priority Mail, Express Mail and First-Class Package Service). Each line has its own regulations and pricing rules that are administered by the PRC. While rate adjustments are a fairly in-depth topic, a key factor in determining rates for market dominant services (which account for 74% of USPS annual revenue) is the Consumer Price Index (CPI). When the CPI goes up, rates can be increased; however, when the CPI drops, postal rates must be lowered. Because they are constrained by the CPI, the USPS can’t respond to competitive pressures such as rate changes by UPS or FEDEX, who can increase their pricing at will.

Details

Intelligent Parcel Lockers

…the perfect solution for secure, centralized package delivery and pickup

By Paul Johnson, President CMS – Complete Mailing Solutions


Delivering a high volume of packages to people who are dispersed across large areas such as colleges, apartment buildings or corporate campuses can be costly and can quickly overwhelm your resources. In these situations, providing a secure and convenient way for recipients to receive packages in a cost-effective manner is a daunting challenge.
What if you could provide 24/7 access to packages in a convenient location where people can safely and securely retrieve them? If your organization is struggling with this issue, check out Packcity Intelligent Parcel Lockers from Neopost. These automated electronic locker systems securely store packages for easy recipient retrieval and package returns. They provide a valuable service to residents and consumers and substantial cost savings and reduction of liability to organizations. In some cases, they can even be a profit center.
PackCity Parcel Lockers

Packcity Intelligent Parcel Lockers provide:

  • Reduced storage requirements -large storage spaces are no longer necessary. Slimline lockers can be placed in hallways or other easily accessed areas – even outdoors!
  • Customization – lockers can be configured to your needs and incorporate your branding.
  • Security – packages are stored safely until retrieved.
  • Accountability – every drop off and pickup is automatically logged electronically providing 100% chain of custody tracking.
  • Labor reduction – packages are delivered centrally rather than distributed to multiple locations.
  • Reduced handling – eliminates the need for multiple deliveries and re-deliveries. Signatures are captured upon pickup and logged into the system for tracking purposes.
  • Convenience – 24/7 access allows recipients to retrieve packages at a time convenient to the them.
  • Flexibility – recipients are automatically notified by email or text that their package is ready for pickup.

All of this is accomplished in three easy steps and returns are just as easy.
Packcity Lockers Process
Click here to see Packcity Parcel Lockers in action!
Packcity Parcel Lockers are the most convenient click and collect solution for deliveries at residences, retailers, universities, corporations and other locations. They save time for building owners, managers and retailers, while providing a convenient, safe and valuable service to residents and consumers.
To explore how Packcity intelligent parcel lockers can benefit your organization, contact Paul Johnson at 303-761-0681 x211 or email pjohnson@cms-colorado.com. In the meantime, you can download a Packcity Parcel Locker brochure here.

Details

Who Said Mail is Dead?

By Paul Johnson, President CMS – Complete Mailing Solutions


Back in the 90’s, it was predicted that electronic media would eliminate the use of paper and be the demise of mail. Thirty plus years later, this prediction has not proved right. With the emphasis on digital communications and the ease with which we communicate, it would seem that mail would be doomed. But not yet!
While mail has declined from its heyday, it has a viable place in the communications mix. Consider some of the advantages of mail:

  • Anticipation and emotional connection with a personal communication that can be touched and felt
  • Less clutter (compared to all those emails) so advertiser’s messages are more easily seen
  • Longer life – mail is often held onto as reminders to take an action (emails are gone in an instant!)

While multiple channels of communication are necessary these days, mail still plays an important role in reaching customers and prospects. The fact that there is less mail overall, is an advantage to marketers because their message stands out. In a recent USPS survey*, an average of 8.4 minutes is spent sorting mail which is a very long engagement time (surprisingly, while millennials receive less mail they spend 9.2 minutes engaging with it). This is a great time to engage and attract new customers.
Learn more about engaging your customers in this article by Jim Cochran, Chief Customer & Marketing Officer at the USPS. Or, download the results of the USPS’ Mail Moments 2016 Review for some surprising facts about consumer behavior mail.
Given that mail is still an important part of the communication mix, it’s important to evaluate whether you are maximizing your mail program. Ask yourself whether you can:

    • Maintain your mail list so that you are not paying for mail that will never reach your customer or prospect
    • Leverage your existing communications to deliver customized messages and offers

We offer solutions that will help you optimize your communications through a variety of mailing, printing, digital and logistics solutions. Call us today at 303-761-0681 or contact Paul Johnson (pjohnson@cms-colorado.com) for a complimentary assessment of your mail program.
Share your thoughts. What’s the most unique way you have used mail in your company? What success have you experienced?

*(USPS Mail Moments 2016 Review)

Details

Who Moved Your Cheese?

By Paul Johnson, President Complete Mailing Solutions


Do you receive a significant number of parcels and important documents? Are you finding it hard to handle and keep track of them? Do you know where important files or documents are at all times? Would it be helpful to receive an email notification when a time-sensitive document arrives? Are you wasting valuable time manually inputting incoming mail and parcels?
tracking parcel with cordless barcode scanner
If you answered “yes” to one or more of these questions, then read on to see if a parcel and document tracking solution might benefit your organization.
Neopost WTS is a scanner-enabled chain of custody tracking system for inbound mail, parcels, files and objects (such as electronics, furniture, tools, supplies, etc.). These items can be scanned into the system upon receipt. Scanning is then used to track any handoffs or checkouts from that time forward. With WTS you’ll know exactly where every received parcel, document or item is at any time. Available as either a premise or web based solution, WTS is scalable from small single-location businesses to large enterprises with multiple locations.
You’ll not only know where all tracked items are, you’ll have detailed information at your fingertips including:

  • Item description
  • Location
  • When the item was received
  • Identification of employee who moved it
  • The signature of the person who received it and currently has it

Real-world examples

Clients have used WTS for tracking company assets such as laptops, golf clubs, tools and equipment. Assets can be checked out for use and then checked back in. No more missing assets or wasted time tracking them down… you know where they are at all times. This applies to assets to be used both on and off-site.
Evidence tracking is another example. Police stations can use WTS for keeping track of evidence. The evidence is either in the evidence locker or it’s checked out to a specific person who is held accountable for it. In addition, this provides chain of custody tracking.
Benefits of a WTS tracking solution from CMS:

  • Eliminate liability of losing confidential documents or having them fall into the wrong hands.
  • Eliminate loss of expensive equipment and parcels.
  • Provide accountability through chain of custody tracking.
  • Reduce the cost of manually tracking and classifying incoming parcels and documents.
  • Reduce delivery time and errors by building a route for delivery.
  • Eliminate loss of expensive equipment and parcels.
  • Increase service quality.
  • Eliminate wasted time tracking down or finding documents and assets.
  • Automatically notify recipients of arrival of packages and parcels.


If you have any questions or want to learn more about how a tracking solution could benefit your organization, contact Paul Johnson at 303-761-0681 x211 or pjohnson@cms-colorado.com.

Details

How to improve customer communications and reduce costs

By Paul Johnson, President Complete Mailing Solutions


Are the number and type of documents you need to send to your customers growing? Are you pressured to do more with the same or fewer resources without compromising quality? Would you like to improve the customer experience while reducing costs and increasing efficiency?
If you answered “yes” to any or all of these questions, then a communications management solution is worth considering. The key components of an effective communications management system are: 1) communications management software, 2) folder inserter(s) and 3) address validation software. In this article, we’ll provide an overview of the role and functionality of communications management software and provide a case study with hard data on the results one organization achieved by implementing a communications management solution.

Communications Management Software

This software is at the core of the solution, the brains, if you will. Communications management software electronically gathers documents such as invoices, statements and reports from a variety of sources (billing, ERP, CRM system, etc.), processes them (more on this in a moment) and routes them to the appropriate communications channel including email, mail, web portal or fax.
linked communications
An example of this type of software – Neopost’s OMS-500 – provides centralized administration and distribution of documents from different departments (in different locations if desired) to be custom-processed and routed through the appropriate communications channels for each document. OMS-500 opens up a whole new world of possibilities in the way that you communicate with customers (or others you send documents to).

What are the results of communications processes optimized with OMS-500?

  • Time & Cost savings
    • Multiple documents can be consolidated into single, rather multiple emails, envelopes or faxes
    • Paper documents don’t require manual sorting, folding, etc.
    • Documents sent via USPS® mail receive the lowest rates
  • Improved Accuracy & Confidentiality
    • Recipients never receive documents not intended for them… thereby increasing security and reducing compliance and privacy risks
    • Bad addresses are corrected prior to mailing
  • Improved Customer Relations
    • Customers can choose how to receive communication: email, mail, web portal or fax
    • Documents are appealing and easy for customers to understand
    • Bills can contain personalized messages or offers/promotions

 


To read about a real-world scenario, check out this case study on how Seattle Children’s hospital uses a communications management solution to get the following results:

  • 88% reduction in labor costs.
  • Improved job satisfaction for employees doing the work.
  • Ability to re-assign existing staff to higher-value and more fulfilling tasks.
  • Improved data quality and deliverability of mail.
  • Improved mail handling including grouping documents by recipient instead of sending multiple documents per recipient.
  • Postage savings achieved from combining reports for the same recipient.

For more details on OMS-500 software you can download a brochure here or watch a video on OMS-500 here.

Details

Can a Dimensioning System reduce your warehousing and shipping costs? If so, how do you get the most for your investment?

By Paul Johnson, President Complete Mailing Solutions


With the ever-increasing costs of warehouse space and the recent introduction of shape-based pricing by major shipping carriers, many DC and warehouse managers are looking for ways to reduce costs, calculate rates more accurately and cope with ever-changing shipping and logistics requirements. For many, this begs the question… should you get a dimensioning system? Let’s take look…

Simply put, dimensional weighing systems efficiently automate the process of determining package size/shape and weight in conjunction with your shipping system. The optimal system for your operation will depend on shipping volume, size and type of items shipped and level of investment you wish to make. Companies that ship as few as 100/day find that an investment in a dimensional weighing system is well worth the expenditure.

Most companies have found that savings from dimensioning systems have resulted in payback in a little as a few weeks. Some areas where quantifiable savings are realized are:

  • Space optimization
  • Slotting optimization
  • Reduced shipping costs
  • Rate shopping and informed negotiations
  • Pre-manifesting for more efficient throughput
  • Pick/pack efficiency
  • Item tracking
  • Reduced labor costs (some companies reporting up to 90% savings in line labor)
  • Streamlined returns process
  • Data analysis to identify opportunities in areas such as capacity optimization, load balancing and bottleneck elimination

The list above is obviously just a summary and there’s more to unpack here than can be addressed in this blog post. If you’d like to dig deeper and learn the specific savings in each of these areas, check out this white paper: Dimensioning Systems: Getting the Most for Your Investment. It details how savings are realized for each of the bullet points above including how carriers are using the “black box” of dimensional-weight calculations to increase your overall spend.
In addition to details on cost savings, this white paper includes a guide to the 10+ Essentials to Look for in a Dimensioning System. After reading this white paper, you’ll be well-versed on what a dimensioning system can do for you and better equipped to evaluate the best system for your needs.
If you’d like a customized assessment of your needs, projected savings and investment requirements for your situation, contact Paul at paul.johnson@comp-mail.com or 303-761-0681 x211 and we’ll have a specialist provide a plan tailored specifically for your requirements.

Details

Can A Turtle Become A Gazelle?

By Paul Johnson, President Complete Mailing Solutions

Today’s companies are in transition. Mailroom processes have reached a tipping point between old school “turtle” thinking entrenched in “business as usual” and progressive “gazelle“ thinking that is focused on flexibility, speed, responsiveness and efficiency.

With increased labor and processing costs, strict legal requirements concerning customer privacy (e.g., HIPAA and Sarbanes-Oxley), steep penalties for non-compliance, and customers expecting responsiveness, companies can no longer afford to fall back on old school thinking by hiding in their shells.

How To Become a Gazelle

State-of-the-art mailroom Process Integrity Solutions (PIS) provide the ability to combine hardware and software technologies to ensure mail preparation is secure, content is correct, visibility is instantaneous and costs are reduced. Consider these additional benefits:barcode-with-push-pin

  • Increased efficiency – eliminates slow, manual processes that lead to errors, mismatched documents, privacy breaches, and high handling costs.
  • Visibility and tracking – barcode technology groups documents by customer and reports the status of individual mail pieces.
  • Cost Savings – combines multiple communications into one mailing based on the individual, which saves significant postage costs.
  • Security – automated processes ensures accuracy and eliminates the risk of private information being exposed.


Process Integrity Solutions increase operational efficiency, eliminates error-prone manual processes and ensure a superior customer experience.

What are some of the components of a Process Integrity Solutions suite?

  • Software that:
    • Centralizes the creation and management of communications
    • Ensures the right documents are delivered to the right customer in accordance with their preferences (mail, email, web portal, etc.)
    • Provides addresses accuracy and correct formatting
    • Provides visibility and trackability in the mail stream
    • Turns standard communications into marketing opportunities
  • Equipment designed to interface with software to eliminate manual processes and provide greater responsiveness

Working in tandem, PIS can dramatically transform your mail center and improve financial performance as well. A turtle can become a gazelle.


Want an overview of other ways you can improve your mail center? Read this white paper on How Your Mail Center Can Improve Your Financial Performance. You’ll learn more about the various areas of a mail center that can improve your company’s flexibility, speed, responsiveness and efficiency.

Details