Smart Mail. Mobile Mail. Intelligent Mail. Mailpiece Tracker. Mail Innovator. The Caller ID for Mail. Call it what you will, but the U.S. Postal Service mail tracking and reporting service, Confirm, is a revolutionary new product. It's posed to dramatically improve the direct and indirect costs of a company's production and customer support operations all from just knowing that "the statement, check, credit card, catalog, policy, cancellation notice or collection letter is in the mail." Don't make the mistake of viewing this emerging service as merely a tracking tool that monitors individual pieces in transit through the postal system. It is much more!

The Barcodes

It's no wonder that practically everything you purchase has some sort of barcode on the package. Who would have known that technology introduced years ago would still be so widespread and useful in all industries, including document and payment processing?

Confirm uses a combination of the POSTNET Code and PLANET Code to electronically track a customer's mailpiece. When it is scanned, the date, time and location where the piece was processed are captured along with additional piece specific information. Confirm provides near real-time status within the postal system about when outgoing mail is nearing delivery or when incoming payments or reply mail is on its way to you.

The Confirm service is in place for First Class mail, Standard mail, Periodicals, Letters and Flats. Currently, 98% of letter mail is successfully scanned for reporting. The scan rate for flats is somewhat less than letters (50% to 60%) because half of the flats entering the system bypass the flat-sorting machine where the barcodes are scanned.

The Practical Uses

Greater control of the information means a greater control of cost. Having hundreds of thousands of scanned mail records every day from the USPS is meaningless unless that information can be massaged, manipulated and merged into your day-to-day business practices. Three functional areas achieve the most measurable impact with the timely capture, reporting and integration of mail tracking data: performance management marketing, and treasury.

Performance Management

Performance management and resulting cost reductions reach an entirely different level by knowing the to whom, when and where answer for every mailpiece sent or received.

Service Agreements Monitoring and enforcing service level agreements with providers is easier when the exact entry date of every mailpiece sent is captured for an instant status. Companies are also exploring different ways to examine the postal data to pinpoint problematic delivery points. Mail performance is more closely monitored by viewing a summary of an entire outbound mailing by state, three or five-digit ZIP Code or even down to the house level.

Note the improvements captured in chart A of a major financial services company once the poor performance was brought to the attention of the USPS. Each day a billing statement is delayed costs your company real money. Since a statement often triggers a customer to pay, if the bill arrives late, the payment cycle starts late. A USPS mail study conducted several years ago reported that 11.7% of consumers pay within a day or two of receiving their bills.

Call Center Metrics Since two-thirds of call center costs relate to personnel, getting the right number of staff is a critical item to service and cost. Accessing advance information on mail going or coming from a customer makes call center staffing more efficient. Mail tracking information · also helps companies tackle two other major call center  performance metrics: first call resolution rate and average handling time. Payment receipt and posting, along with statement delivery, are top categories for service call activities. By integrating tracking data with online Web tools, reps get instant access to images and reports that help answer customer questions immediately. When a customer complains that she didn't get her statement, disputes a late fee or says she made a payment, your service person can check and see the status of these mailed items and can confirm if the statement reached the customer or if there was a delay caused by the USPS. Waiving or collecting fees becomes less subjective and more objective based on true circumstances. Material savings accumulate as late fee reversals are not automatic and statements don't have to be reprinted and re-sent to customers. A recent study by Gartner Group determined a paper invoice alone costs an average of $5 to produce and print.

Marketing

Direct mailers now covet the mail tracking details and consider it more valuable as a marketing tool than a tracking tool. Direct mailers were the early adopters of Confirm and are responsible for much of the PLANET Code mail today. However, interest is growing as larger businesses expand personalized marketing campaigns through the traditional billing channel. What makes the billing channel so attractive? It's regular and reliable mail that reaches the customer. Second, it's almost always opened and read. Third, it can be a highly lucrative revenue source that helps pay for the ever-rising postage costs. The 100% hit rate for bills and statements is a marked contrast to the two percent to three percent hit rate of direct marketers.

Treasury

Ask any treasurer the three most important factors to his company's financial health, and he will equivalently answer, "Cash flow!" Are the payments posted? Who paid, who didn't? What customers are late or delinquent? How many days did it take to collect receivables? How well does the forecast align with real cash flows for maintaining corporate liquidity and investments? These are daily questions asked and answered during a typical month of monitoring the money. With this in mind, think about the impact and importance of an early alert of incoming customer payments.

Collections must come instantly to mind. Several research firms estimate the cost to collect a payment ranges from $10 to $50 per account, depending on the number of collection steps taken: letters, phone calls, notices, late fees, etc. A single customer service call alone can cost $4 to $8 to field, depending on how long it takes to be handled. The only thing that stops this "collection chain reaction" is a posted payment or the assurance the payment is in the mail. No wonder the most popular use of the mail tracking data is to be notified of the first scan or the first day a customer puts the payment in the mailbox. That lead-time of one to three days immediately stops the next collection step, allowing time for the payment to post and preventing the next unnecessary expense. It's proving to be yet again another cost-saving measure with an average of 12% to 15% of monthly debt collection calls suspended.

A few other treasury functions deserve noting as viable beneficiaries of this valuable data. Issuing checks with PLANET Codes for outbound tracking can help control reissues and stop payments. Another area is risk management combating theft or fraud by specifically identifying high-value mailpieces, like credit cards, and taking action based on rules of non-receipt. For repeat late payers or customers that "pay when due," separate tracking and reporting can lead to negotiating alternative payment methods such as an automatic electronic payment debit or electronic bill presentment and payment. And lastly, a Cash Manager can adjust a forecast, a collection process or even a billing cycle by monitoring customer payment patterns to detect changing habits of certain types of customers.

The Bottom Line

It's not mere mail anymore! The value of integrating and connecting mail data with the daily processes within your company cannot be underestimated as an avenue to increase productivity and profitability.

Sandra Williams leads Regulus' Transactions2 Consulting team. The team provides consultative services, including on-site assessments and business case development to potential or existing clients. For additional information, please contact Regulus on the Web at www.regulusgroup.com or by phone at 888-747-2877.