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11 Common Mail Mistakes That Could Be Impacting Your Bottom Line

  1. The Main Event – PC Postage vs Postage Meters Presented by Postal Advocate Inc. 11 Common Mail Mistakes That Could Be Impacting Your Bottom Line Presented by Postal Advocate Inc. June 14, 2017
  2. Adam Lewenberg - Background and Experience • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of over 70,000 pieces of mailing equipment for the largest US and Canadian companies. – Speak and teach nationally on mail savings and industry trends. • Industry Co Chair- Boston Postal Customer Council/Mail Systems Management Association member. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 18 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nations top accounts. Not affiliated with any mailing vendor - Unbiased advice. June 14, 2017 2
  3. What We’ll Cover: 1. Limited Reporting and Visibility 2. USPS® Savings Programs 3. Reactive vs Proactive Returned Mail Processes 4. Rate Shopping 5. Not Comparing In-House vs Outsource Costs 6. Working with Only One Vendor 7. Manual vs Automated Processing 8. Not Exploring New Technologies 9. Not Validating Invoices for Contract Compliance 10. Treating Postage as an Expense Instead of an Asset 11. Not Getting Involved in the Mailing Community June 14, 2017 3
  4. 1. Limited Reporting and Visibility At a bare minimum, every organization should have reporting on the following: 1. Postage spends by month 2. Details on the largest mailing projects with historical numbers and future projections. 3. Equipment and mailing service provider costs and terms June 14, 2017 4
  5. Steps for Visibility and Oversight Mailing Equipment • Get reports from your vendors that list: – Account Numbers (Install, Lease, Prepaid and Postage Advance) – Lease Information – Rate, Term, End of Lease, Items covered. – Meter rentals and maintenance agreements. – Model, serial number and description of every item. • Go to accounts payable and pull spend reports from the main mail vendors and USPS. • Enter your account numbers on the vendor websites. • Monitor your inventory, invoices and postage balances online (Recommended to do this monthly). • Find all active locations with equipment. • Set up a schedule for continual review. Similar steps should be taken for the following: – Mail Houses and Presort Providers – USPS Permit Accounts June 14, 2017 5
  6. 2. Not Taking Advantage of USPS Savings Programs First-Class® Mail – Automate with Barcodes – If you have 500 pieces or more and can run your mailing through an approved software program to validate the addresses and apply barcodes, you can reduce costs by 8-58%. June 14, 2017 6 Mail Piece Examples First-Class Mail® Retail Single Piece First-Class Mail® Metered Single Piece Typical Presort Service - First- Class Mail® First-Class Mail® - Automation Marketing Mail® - Automation Marketing Mail® Non Profit- Automation 1 Ounce #10 Envelope $0.49 $0.46 $.403-.453 $.373-.453 $.251-.288 $.134-.171 3 Ounce Newsletter (6X9) $0.91 $0.88 $.403-.453 $.373-.453 $.251-.288 $.134-.171 8 Ounce Flat (9X12) $2.45 $2.45 $2.10-2.22 $1.916-$2.22 $.612-.775 $.442-.605 Post Card $0.34 $0.34 $.266-.284 $.253-.284 n/a n/a Single Piece Rates Automation Mail with Barcodes Flat Envelope Sheets First Class Mail® Flat - Large Envelope First Class Mail® Letter - 6X9 Envelope (Metered) Typical Presort Service - First- Class Mail® Letter First-Class Mail® - Automati on Letter Savings 1-2 $0.98 $0.46 $.403-.453 $.373-.453 53-62% 3-4 $1.19 $0.46 $.403-.453 $.373-.453 61-69% 6-10 $1.40 $0.70 $.403-.453 $.373-.453 50-73% Weight Assumptions - Paper = .16 Ounces, Flat = .6 Ounces, 6X9 Envelope = .3 Ounces Letter Envelope - Example 6X9 or #10 Folding Flats
  7. Additional USPS Letter Promotions June 14, 2017 7 USPS Promotions and Incentives – The USPS has a schedule of different promotions they offer to higher volume mailers, typically geared to using the latest technologies that can improve the value of mail. These promotions have limited time periods and require the client to be proactive in its management and refunds.
  8. Package Discounting June 14, 2017 8 Retail Commercial Base Commercial Plus Weight LB's January 22, 2017 January 22, 2017 % Savings over Retail January 22, 2017 % Savings over Base 1 $6.65-10.50 $5.95-9.89 6-13% $5.75-9.59 3% 5 $9.85-30.25 $7.17-28.72 5-27% $6.96-27.86 3% 10 $12.65-52.10 $9.09-50.17 4-28% $8.82-48.66 3% 25 $22.55-99.10 $18.11-90.77 8-25% $17.56-88.04 3% 50 $32.55-156.95 $26.74-143.71 8-19% $25.94-139.40 3% Flat Rate Envelopes $6.65 $5.95 11% $5.95 0% Small Flat Rate Box $7.15 $6.45 10% $6.45 0% Medium Flat Rate Boxes $13.60 $12.40 9% $12.40 0% Large Flat Rate Boxes $18.85 $17.05 10% $17.05 0% USPS Priority Mail® Weight Ounces First-Class Mail® - Parcels Retail First-Class Mail® - Package Services Commercial Savings Up to 4 $2.67 $2.61 2% 5 $2.85 $2.77 3% 6 $3.03 $2.77 9% 7 $3.21 $2.77 14% 8 $3.39 $2.77 18% 9 $3.57 $3.32 7% 10 $3.75 $3.46 8% 11 $3.93 $3.60 8% 12 $4.11 $3.74 9% 13 $4.29 $3.88 10% 14 $6.65-10.50 $4.02 40-62% 15 $6.65-10.50 $4.16 37-60% 15.999 $6.65-10.50 $4.30 35-59% Convert from Retail to Commercial Priority Mail® - Commercial Rates vs Priority Mail® at Retail rates 14% average savings. Provide better tracking and visibility.
  9. 3. Reactive vs. Proactive Returned Mail Processes What steps are done to make sure the addresses get updated in your systems for the next mailing? Here are the processes used by best in class mail operations: 1. They run their mail list through USPS CASS (Coding Accuracy Support System) tools to validate that all addresses match the national database. Next, it is run through the USPS National Change of Address (NCOA) database to validate that the recipient is at that address. 2. Simple address fixes are made automatically. If the address has changed, they will decide to either send the mail to the new address or reach out to the recipient to validate the change prior to updating the system. 3. If the mail piece gets returned, there will be deeper processes to directly reach out to the recipient to validate the correct address. 4. The best mailers will integrate this process electronically through the IMB barcodes. June 14, 2017 9
  10. 4. Not Rate Shopping Multiple Carriers and Service Levels STOP the “We have always done it this way” - Automated tools that can compare rates through multiple carriers and service levels at the touch of a button are available. Many packages that were shipped through private carriers may be less expensive with the USPS and vice versa. Even within a carrier, rate and service levels need to be explored. Here are some examples: 1. USPS Priority Mail® over 1 LB going to a business may be less expensive with faster delivery going through your private carriers if you have a decent negotiated discount. 2. Private carrier packages less than 10LB’s going to a residence may be less expensive sending through the USPS because of residential, delivery area and fuel surcharges. 3. Private carrier next day, two day and three day shipments may be less expensive with the same or faster delivery shipping through that carrier’s ground service. 4. Closer shipments may be less expensive with faster delivery through private carriers but the opposite may apply to farther light weight shipments. 5. USPS First-Class Package Service should be used for instead of USPS Priority Mail® for any package less than 1LB. June 14, 2017 10
  11. USPS – Competitive Price Positioning • USPS delivers to every address every day and can be less expensive than the private carriers on residential shipments.. • Most competitive in light weight less than 10LB items going to residences. • USPS can delivery items that are less than 1LB through First-Class rates that range from $2.61- 4.30 where the Expedited carriers start at the 1LB rates above. • USPS provides free boxes for Priority Mail®. • This residential, light weight segment is the fastest growth area of ecommerce. • Private carrier ground service can have faster deliver and lower fares to closer zones. June 14, 2017 11 Expedited Carriers will offer discounts off published rates but typically have minimum price levels. Only the largest clients get discounts off the surcharges and fees. Zone 4 Rate Comparison USPS Expedited Carrier Expedited Carrier Expedited Carrier Weight Priority 1-3 Day Two Day 3:00 Three Day Ground 1-5 Day .5 LB $2.77 $17.92-18.09 $12.28-14.94 $8.14-8.22 1 LB $6.56 $17.92-18.09 $12.28-14.94 $8.14-8.22 5 LB $9.19 $22.75-22.96 $16.56-19.36 $10.68-10.74 10 LB $11.22 $33.48-33.71 $23.90-28.97 $11.44-11.51 Delivery Time Range and to Zone 4 1-3 Day, 2-3 Day 2 Day 3 Day 1-5 Day, 3 Day Rates based research done on 05/30/2017 Residential Surcharge N/A $3.85-4.00 $3.85-4.00 $3.40-3.45 Delivery Area Surcharge (23,500 Zip Codes Qualify) N/A $2.45-4.20 $2.45-4.20 $2.30-4.20 Fuel Surcharge N/A 4.5% 4.5% 5.3% Address Corrections N/A $13.40-14.00 $13.40-14.00 $13.40-14.00 Saturday Delivery N/A $16 $16 $16
  12. Dimensional Rating Impact • All carriers have Dimensional rates for packages over a cubic foot. • In 2015 the major private carriers started assessing Dimensional Rates on all packages. • USPS did not make changes and can be more competitive based on box size. • Complexities are driving the need to have a way to compare rates across multiple carriers. June 14, 2017 12 USPS Expedited Carrier Expedited Carrier Expedited Carrier Item Description Dimensions Inches Actual Weight LB's New Private Carrier DIM Weight LB's Priority 1-3 Day Two Day Three Day Ground 1-5 Day Headphones 12X8X8 1 5 $6.56 $22.75-22.96 $16.56-19.36 $10.68-10.74 Womens Hat 14X10X7 2 6 $6.83 $24.79-24.96 $18.26-22.11 $10.82-10.88 Pocket Book 19X15X5 2 9 $6.83 $31.09-31.31 $22.84-27.46 $11.32-11.44 Residential Surcharge N/A $3.85-4.00 $3.85-4.00 $3.40-3.45 Delivery Area Surcharge (23,500 Zip Codes Qualify) N/A $2.45-4.20 $2.45-4.20 $2.30-4.20 Fuel Surcharge N/A 4.5% 4.5% 5.3% Address Corrections N/A $13.40-14.00 $13.40-14.00 $13.40-14.00 Saturday Delivery N/A $16 $16 $16 Zone 4 Rate Comparison - Updated 05/30/17
  13. 5. Not Comparing In-House to Outsource Costs Big Trend - Organizations outsourcing mail functions to groups that have higher levels of resources (Staff, equipment, expertise) Most common levels of outsourcing that we see: • Presort Services – These companies will pick up your completed mail pieces and run it through their sorters to get you better postal rates. This compares to automating and barcoding mailings internally and then bringing to the USPS. • Mail Service Providers (Also known as mail houses) – From only a data file, they will print your documents, fold, insert, seal, barcode and present to the USPS. Look at the mailings you are doing on a regular basis to compare your total costs against their service fees. • On Site Mail and Print Service Providers – They will set up staff and equipment at your location to manage the production of mailing projects as well as day to day mail. This can take the headache out of managing the mail and print areas while making a third party accountable to service level standards. June 14, 2017 13
  14. 6. Working With Only One Vendor Go to the market to validate that you are getting the best rates and service levels • Typically we find savings of 10-40% helping our clients through bids • Often staying with the same vendor • Mailing Equipment: Pitney Bowes, Neopost, Hasler, FP, • Presort Services: Pitney Bowes and local providers. • Mail Houses: Local and national players. June 14, 2017 14
  15. 7. Processing Manually vs Automated Increase efficiency by 80-90% by automating June 14, 2017 15 Job Manual Speeds Automated Speeds TypicalEquipment Investment Range Monthly TypicalMinimum Threshold Foldingand Inserting 1-300/hr 900-10,000/hr $150+permonth >1000permonth Addressing/Labeling 1-400/hr 3-20,000/hr $200+permonth >2000permonth MailOpening 200-400/hr 5-20,000/hr $100+permonth >1000permonth Loggingincoming packages/overnights 30-100/hr 120-240/hr $200+permonth >1000permonth
  16. 8. Not Exploring New Technologies • Postal Automation Software that is IMB Compliant – The USPS is trying to get everyone using their Intelligent Mail Barcodes (IMB) and are passing on mail savings of $.001-.003 per piece for those who use it. • Cloud based software to easily add barcodes to every page of a document – These barcodes can be read by automated inserters to validate that the right number of sheets are being inserted. • Simple Mail Ready Data File (MRDF) creation and optimization – This means being able to send a file to the inserter, so when it scans a document, it knows all the details about the piece (Job number, number of pages, additional inserters needed etc.) and reports can be generated to validate completed sets. This used to be only available for the largest production mailers, but is now an option at the table top equipment level at significantly lower costs. • Cloud based rate shopping tools – We mentioned this above, but now for as little as $30 per month you can compare your private carrier rates against the USPS on a package by package basis. June 14, 2017 16
  17. 9. Not Validating Invoices For Contract Compliance Most common issues that we see: 1. Mailing vendor invoices adding equipment insurance, reset, postage advance, late fees finance charges incorrectly. 2. Invoices not reflecting corporate negotiated discount levels. 3. Charges on equipment or projects that are no longer active. 4. Presort Services and Mail Houses charging higher than negotiated rates or adding fees. June 14, 2017 17 Savings Type # of Transactions Total Savings Fee Savings: Late/Fin Charges 109 119,088$ Fee Savings: Loyalty Prog 460 34,576$ Fee Savings: Remove Insurance 999 184,559$ Other Total 1568 338,223$ Postal Advocate Avoidable Fees Savings Stats Savings Type # of Transactions Total Savings Vendor Credit: Equipment 2551 1,868,376$ Postal Advocate Credit/Overcharges Savings Stats
  18. 10. Treating Postage as an Expense Instead of an Asset Most organizations will send money to the meter vendors, USPS or mail service providers to fund mailings and these values are immediately expensed. The issue is that this money is an asset until it is used. We have found millions in lost postage for our clients. Most common places to look: • Returned postage meters where the funds are never requested back. • Huge balances sitting in seldom used postage accounts. • Postage Meter and USPS Permit accounts used to fund different locations and mail service providers with no visibility to balances. June 14, 2017 18 We have found over $2,500,000 in the last 24 months mostly residing with the mailing vendors.
  19. 11. Not Getting Involved in the Mailing Community There are local and national events as well as webinars that can educate members of how to run best in class operations. Here are some examples of their impact: • Rate change meetings going over what areas need to be addressed, how to budget for the changes and what is needed to optimize any savings available. • Vendor presentations of new technologies. • USPS presentations on how to optimize services. • National events that will have education and vendor sessions as well as industry certifications. June 14, 2017 19
  20. In Summary 1. Limited Reporting and Visibility 2. USPS® Savings Programs 3. Reactive vs Proactive Returned Mail Processes 4. Rate Shopping 5. Not Comparing In-House vs Outsource Costs 6. Working with Only One Vendor 7. Manual vs Automated Processing 8. Not Exploring New Technologies 9. Not Validating Invoices for Contract Compliance 10. Treating Postage as an Expense Instead of an Asset 11. Not Getting Involved in the Mailing Community June 14, 2017 20
  21. Helping multi-location organizations streamline their mailing costs 70,000 pieces of equipment, managed by Postal Advocate Recovered over $4,725,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $30,000,000 IN CLIENT SAVINGS $748K 60% Average Client Savings Average Equipment Savings HOW WE DO IT • 240+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit or call (888)977-MAIL(6245)
  22. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT
  23. Upcoming Webinars Wed Sept 20, 2017 at 11AM EST – How Large Organizations Can Save on Mailing Fleet Costs June 14, 2017 24 Check out to register
  24. Contact info: (20pt) June 14, 2017 25 Questions? Contact: Adam Lewenberg - President 888-977-MAIL X 501
  25. June 14, 2017 26