In our last article on the Intelligent Mail barcode (IMBC), we provided an overview of the IMBC including a look at the data fields, options for using either the Basic or Full-Service option and some of the advantages associated with Full-Service. For this article, we’re going to present the very latest in the rules and recently announced pricing for the Full-Service IMBC. We’ll also note a couple of examples where mailers are using the Intelligent Mail barcode to drive additional value and savings in their mailrooms.
First, let’s start with the timing. The USPS confirmed that they will be ready for Full-Service in May (Basic IMBC has been in place for two years). May 11th is the initial (and internal) software release required to process the electronic documentation via PostalOne! (USPS’ mail data exchange system). May 18, select customers that are already using PostalOne! for submitting their documentation electronically will begin testing Full-Service. Reminder: Full-Service IMb includes free ACS (Address Correction Service) and start-the-clock.
In terms of value, here’s the deal, the best way to think about the Intelligent Mail barcode from a mailer’s perspective is envisioning a window by which you can see the mail while it’s traveling to and from your customers. If you know where this mail is, and the time it takes from point to point, could that provide added value to your business? Many think it does.
One large retailer with nearly 400 stores uses Basic IMBC to track their weekly outbound mailings of nearly 800,000 pieces. By knowing the estimated in home delivery date (high probability of when a mailpiece arrives at its destination), this customer was able to select Standard Mail instead of First-Class Mail for 75% of the mailing saving them an estimated $60,000 per year.
Another mailer, a Direct Mail Advertiser, sends approximately 20 million mail pieces per year. Their successful campaigns require a call center at an annual cost of $2.5M. With the ability to track outbound mail, determining when mail arrives to their prospects and customers, resources at the call centers can be staffed accordingly resulting in a 5% efficiency gain equaling an annual savings of $125,000.
Tracking inbound mail (for First-Class Mail) can help predict cash flow, and help companies make decisions about late fee waivers, and even about discontinuing service to customers based on knowledge of a potential “remit.”
With the ability of mail piece tracking and free ACS for Full-Service, there is additional value in knowing which pieces actually make it to their destination as well as knowing when an address needs updating. A major retailer sending millions of pieces of collateral with a 3 – 4% return rate can save $400,000 - $500,000 per year (total mailpiece cost of $1.10 each - as it’s not just lost postage when mail isn’t delivered). With ACS, a company knows “electronically” within days of any mail failure and can promptly take corrective action. Currently, the manual process may take as long as 4 weeks for companies to receive and process returned mail-meanwhile customers are most likely NOT paying.
In addition to the operational value, as of November 29, 2009, the USPS will provide a lower price when using Full-Service IMBC. First-Class Mail will get an extra $.003 per piece savings and Standard Mail and Periodicals will get an extra $.001 per piece savings when using Full-Service IMBC. On the surface, this may not seem like a big deal. However, when considering the other value components and the added price incentive, you have to ask if you can afford to ignore the migration to the Intelligent Mail barcode prior to the May 2011 when PostNet barcode automation discounts end.
But you also want to keep in mind that the USPS sees the IMBC as a report card on address quality. Given the USPS’ ability to check Move Update compliance, Delivery Point Validation (DPV), etc, it may be beneficial to know in advance if your mail will pass the test.
In the next article, we’ll continue providing updates on the IMBC as well as other related items such as Move Update and ways that mailers are using the Intelligent Mail barcode to earn savings.
David Robinson has been active in the mailing industry for over eight years and is currently the Director of Address Quality for Pitney Bowes, working on their Postal Relations team located in Washington, D.C.
Kevin Conti is Director of Mailing Solutions at Pitney Bowes Software. He works in a consultative role with Group 1 Software customers to deploy software solutions that reduce mailing costs and improve customer communications.