We are all looking for ways to make our mail operations more efficient and provide greater value for our clients. Here are four common ways mail service providers are wasting time, money, and other valuable resources, as well as some practical advice for how to stop.
1. You’re not learning from your undeliverable mail
According to the USPS Office of Inspector General, more than 6.5 billion pieces of mail go “Undeliverable as Addressed” each year. That represents roughly 4.2% of all mail volumes and costs the mailing industry $20 billion in print and postage costs annually. When ancillary factors — such as late payments, delayed or lost revenue, loss of customers, and wasted overhead — are added to the equation, mailers begin to see the true insidious nature of the Return Mail problem.
There are no shortcuts to mitigating the impact of undeliverable mail. Relying on the National Change of Address (NCOA) and Address Change Service (ACS) is not enough. Approximately 16-18% of US residents move each year, and only 60% notify the USPS. And while USPS Secure Destruction saves you the effort of handling the returned mail pieces, it doesn’t solve the root cause of the problem.
Ultimately, you need to find the right person and get the mail piece to them as efficiently as possible. You may need to find a business partner that can help handle the physical returns by pulling the data from the front of the mail piece and finding the correct address using a myriad of data sources. It helps ensure you won’t make the same costly mistake twice and puts you on a path to cost-effectively replacing bad addresses with accurate ones.
2. You’re still relying too heavily on manual processes
Over decades, our industry has become increasingly automated. So much so that it is becoming more and more difficult for leading mailers to find material opportunities to speed production on their largest jobs. But also look around the margins. Look at some of your smaller jobs. What do you do, for example, with short run job requests from major clients? If you’re like most mailers, you either: decline the job and potentially upset your client; outsource the job and compromise integrity and profitability; or process the job manually, likely at a loss.
If this sounds familiar, you may want to invest in production mail equipment designed specifically to address these types of jobs. Compact new production mail machines that can reliably process short or long-run jobs across a wide range of formats are becoming more prevalent in the marketplace. These machines allow mailers to keep those “extra” jobs in-house, increasing automation and control over the production process. They also enable the business to re-deploy workers to more profitable tasks and pursue new revenue-generating work from a wider range of clients.
3. You’re too slow to embrace new technologies
When analysts discuss the impact of digital disruption on the mail industry, they tend to focus on the convergence of physical and digital communication channels and the importance of designing mail solutions in the context of an omni-channel customer experience. This is important, but the convergence of physical and digital communications is not the only digital disruption shaping our industry. The convergence of physical and digital technologies in the production environment is having an equally profound impact.
Leveraging technology to establish an automated workflow and using real-time data to measure productivity are essential steps to help your business achieve operational excellence. Our clients are leveraging the power of the Industrial Internet to collect data from sensors on their production mail machines and send it to the cloud, where it can be benchmarked against the performance of leading print and mail service providers from around the world. The data is then used to support real-time insight, predictive analytics, and prescriptive maintenance, leading to increased productivity.
Using analytics tools to optimize postage spend, and then sending mail that does not qualify for the five-digit rate to a commingle service provider, is an effective way mailers should leverage technology to save money. Postage, after all, accounts for 75% or more of the cost to produce and deliver a mail piece, so every fraction of a penny counts.
4. You’re trying to do too much
Frances Frei, a professor in the Technology and Operations Management Unit at Harvard Business School and author of the best-selling book, Uncommon Service: How to Win by Putting Customers at the Core of Your Business, coined the concept, “In order to be great, you have to be bad.”
She believes in attempting to excel at everything, businesses ensure “exhaustive mediocrity.” You have to decide what to focus on, where to channel your energy and resources and, in order to do so, you also have to decide what you’re willing to be “bad” at, and organize your strategy and culture around those decisions.
Applying this principle to our own industry, we have identified four core capabilities from which print and mail operations can develop a competitive advantage:
· Operational Excellence
· Industry Leading Compliance
· Higher-Value Communication
· Omnichannel Customer Engagement
The catch is, you can’t be “great” in all of these areas at the same time. You must choose. We find the most successful print and mail operations identify which of these areas is their “base capability” and develop that area of their business to the maximum. We then encourage them to find no more than one or two additional areas to develop into a new competitive advantage. Businesses cannot be all things to all clients. Choose your core capability carefully and pour your resources into it.
By taking an honest accounting of your mail operation, focusing on your core capabilities, and embracing the latest innovations in physical and digital technology, you can achieve measurable savings in time, money and resources, while strengthening your competitive advantages in the marketplace.
Bruce Gresham is Vice President, Product Management and Strategy for Pitney Bowes Presort Services. Pitney Bowes is a global technology company, offering innovative products and solutions that enable commerce in the areas of customer information management, location intelligence, customer engagement, shipping and mailing, and global ecommerce. With a network of more than 30 operating centers across the US, Pitney Bowes Presort Services processes more than 15 billion pieces of mail per year and is the USPS’ largest workshare partner. Follow him @BPGresham or visit www.pitneybowes.com for more information.