Our personal lives are filled with warnings and alerts that help guide us to make changes in our behavior to keep us safe, financially sound and productive. Consider the yellow traffic light without this warning of an impending red light, our drive to and from work would be a little more dangerous. At our annual physical, our blood pressure is taken, providing an indicator of future health problems and guiding us to make changes in our habits and routines. Even our credit card company calls to let us know about possible fraud with our personal finances or identity. Each of these alerts guides us to make changes in our behavior or take action to protect our future interests.
So, how does this relate to your mail center? First, we must look at what is currently occurring within the USPS. They are in the middle of making revolutionary changes in the way they do business to ensure that they continue to be a viable player in the communications business of the future. Much of this change has been forced by radical shifts in the way in which people communicate and with the speed that this communication takes place. In 2002, the USPS published a plan to reinvent itself, called Strategic Transformation. The basis of this plan calls for the identification of ways to increase revenue, reduce costs, improve service and develop a performance-based culture.
Some of the results of this plan can be seen today in the form of customized postage, flat rate boxes/envelopes, the Forever Stamp and May 2007's Shape Based Pricing (SBP). SBP marked arguably the most significant change within the Postal Service since the Postal Reorganization Act of 1970, which turned the post office into an independent governmental entity.
As significant as the changes have been under Strategic Transformation so far, there are many more changes on the horizon that the USPS will make to reach its goals. Each of these shifts has had, and will continue to have, an impact on your business. By understanding the direction the USPS is headed in and aligning your mail output with Strategic Transformation, you can not only control your costs but improve the overall value mail has on your business.
Mail Already Affects Your Bottom Line
The value, or impact, that mail has on an organization's bottom line is often discounted or not fully understood. It is typically thought of as a cost of doing business an afterthought in many decision makers' minds. However, consider the impact that a poorly prepared invoice, returned to the office "Undeliverable as Addressed," has on receivables. The mail center quickly becomes a critical component of business processes.
Unfortunately today, businesses without a document preparation or address quality strategy in place can experience as much as a 3%-7% returned mail or delayed delivery rate. The monthly impact on Days Bill Outstanding (DBO) is considerable. The impact does not stop with invoices alone. Marketing mailings with poor address quality result in opportunity loss due to these returned mail rates. However, these become even more difficult to quantify due to the fact that Standard class mail is not returned, but is thrown away without consideration of the message it contains.
Address quality is only one aspect of how mail can impact the bottom line. Other areas in the mail center that could be impacting it include out of shape mail, inaccurate postage application, security concerns and overall process inefficiencies.
There are bound to be alerts and warnings inside a business that should be recognized and explored further in order to improve overall mail process efficiency. The following list of areas should be examined to help identify opportunity for reducing costs, ensuring mail security, improving customer communication and raising productivity.
Once identified, a plan should be developed to transform mail output so it aligns with the strategic direction of the Postal Service. In this way, businesses may actually process mail that makes a positive impact on the bottom line.
Five Steps of the Mail Flow Process
1. Document Preparation Decisions made at this step of the mail flow process will either positively or negatively impact each subsequent process. Once a document has been produced, the address, number of pages, security features and tracking capabilities cannot be changed. Understanding the desired end result of each mail communication will help determine strategy at this phase.
Simple address validation tools and document intelligence implemented at this step can cause a 50%-60% reduction in total mail cost. Look for ways to improve address quality, reduce the number of pages and eliminate manual processes during the following steps of the process to help realize savings for your business.
2. Document Processing After document production, the piece must be put into the appropriate envelope. While many businesses don't quantify cost of poor document processing toward the bottom line, significant expense and customer satisfaction issues often occur at this stage when proper strategy is not in place. Consider the labor associated with folding and inserting documents. On top of this, using the wrong size envelope can cost up to 49% more in postage than required.
Another major concern for businesses today is the security and integrity of envelope contents. Co-mingled documents have massive consequences related to privacy laws and customer loyalty. Having mail verification and validation at this stage is an important aspect of maintaining control over document output and should be addressed in every mail flow process.
3. Envelope Metering Sometimes referred to as "the stamp machine," more frequently, the postage meter, is playing a vital role in efficient mail flow process. Prior to Postal Transformation, calculating the rate for a mailpiece was as simple as dropping it onto a scale to be weighed. Today, the meter operator must also calculate the aspect ratio along with the thickness of the piece before determining the correct rate.
This has led to two specific costs that impact businesses. The first is over-posting. By applying more postage than required to make sure mail is delivered, postage expenses are being increased artificially. The second is under-posting. Miscalculating postage due to increased complexity can cause more returned mail or clients receiving mail stamped "Postage Due." Either way, the bottom line is impacted, and corporate image and customer satisfaction concerns can arise. Implementation of dimensional weighing at this step ensures proper postage application cost controls.
4. Postal Accounting Warnings and alerts provide important feedback to help guide our decision-making and become powerful leading indicators of future results. Postage accounting can play this role within the mail flow process.
Understanding to whom, where and what is being sent through the post office, as well as other mail carriers, is critical data that helps optimize mail communication costs. It also provides security for company dollars stored on the postage meter. Capturing data by account, mail class and type will help control cost.
5. Inbound Receiving One reason that the Postal Transformation is taking place is the increase in the speed of communication. With this shift, being able to handle inbound communications as efficiently as outbound communications has become more important.
Tracking, distributing and processing inbound mail and packages seamlessly and accurately affects how well businesses can complete transactions. It is not simply how well you communicate with customers, but how well you receive and react to their responses. This relates to receiving and processing payment remittance, processing product returns or handling inbound documents. An efficient and secure inbound receiving strategy will complete the mail communication flow.
Call to Action
A great first step is to analyze current document generation and distribution flow. Start with the two highest volume outgoing mail communications. Set clear objectives as to expectations achieved with the communication. Next, follow the mail flow as outlined above, identifying areas of opportunity for improvement that achieve these objectives while reducing processing costs. Lastly, map out an implementation program to allow the adoption of these new business practices. Postal education is crucial to making sure new processes will have the desired result.
Ultimately, recognizing the mail center as a critical part of business and customer communication processes, and making an investment to align with Postal Transformation, means one more opportunity to positively impact the bottom line.
For additional information on how to optimize your mail center processes, as well as on Neopost's products and services, please visit www.neopostinc.com.
