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Adding efficiency to mailing

July 23, 2010

Newsweek senior editor Daniel Gross’s recent post Going Postal posed some good questions about why mailers do what they do—and he submits that “power mail users should do what others do when the price of any resource rises—figure out how to use it more efficiently.”

He has a good point, and one that I have seen many mailers putting their efforts toward for years. But at what point does the rate of a postage increase outpace cost savings gained from eliminating inefficiencies? I don’t think we are there yet.

But we are getting closer because out of 100% of the operating costs of a mailer, only about 25% can be made “more efficient.” The rest is postage costs.

So, how can mailers squeeze more out of the remaining 25% of costs? The key is knowing when and where to find the most gain.

A good start is to look to investing in faster and more efficient hardware or implementing rules-based programs that combine “like” work together for productivity gains and postage savings. Another option is to identify and reduce equipment and operator idle time by getting a better handle on when certain jobs should be released, or when preventive maintenance or operator training should be scheduled.

Every mailer and operation is different. For example, catalogers have different business models than transactional mailers. But this is an interesting point that Gross makes:

Direct marketers would be more judicious about the volume of junk mail they send. Couldn’t Pottery Barn offset the cost of higher postage by sending us one catalog every month instead of the two identical ones they’ve been shipping for the last several years?

Why is it that some mail recipients are getting two or three of the same catalog, perhaps with a slightly different version of their name (often misspelled)? Are the mailers renting several databases and not cleansing them? Is it all outsourced? Are tight SLAs making the pressure to get the mailing out the door more important than the cost of delivering duplicate pieces to one household? Does the mailer have the solution for identifying and removing duplicate mailpieces from a production run?

Some ways that mailers can manage these issues are to cleanse mailing lists, generate control files to identify missing or duplicate mailpieces and then track finished pieces using intelligent systems or add-on quality controllers.

Another good question he raised:

Why can’t my electric utility company, which is so concerned about energy efficiency, simply e-mail me my 14-page monthly bill instead of printing it out and sending it through the mail?

Most utility companies can provide electronic versions of bills and statements. However, unless a customer opts-in to a different delivery method, many state regulations require the biller to use traditional mail delivery. In addition, because many of these laws are set at the state level, larger providers need to either have a generic solution for all customers or build different sets of rules and conditions for various customer profiles.

Satisfying these regulations also includes being able to produce an audit trail of every communication piece delivered, regardless of the delivery channel. The risk of cancelling a service that may be necessary to keep a business afloat or ensure that required health care is available without proper attempts at delivering billing notices is more than most organizations want to bear.

To his point, there is opportunity for the utility industry to offset postage hikes and ensure compliance with regulations by delivering documents normally posted by mail via multiple channels or mediums. This might require a simple solution for customers to opt-in for different services, or the mailer to consolidate monthly bills and marketing messages into a lower cost, dynamic piece (one that is faster and cheaper to produce and requires fewer resources.)

In many cases, the technology and processes that can make mail more efficient do exist. But mailers still need to try and squeeze 25% of the pie to offset the increases of 75% of the pie.

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