MAILING SERVICES — GIVING POSTAGE ITS DUE

MAILING HAS been rapidly evolving from being seen as an opportunity for diversification and differentiation to a standard offering of full-service print providers. This is particularly true for shops that have moved into digital printing and variable data marketing services.

Variable data and mailing are a natural fit for obvious reasons. For one, the same database that drives the variable content of a direct marketing piece is also used for the mailing information. Controlling both stages of the process gives the printer advantages in terms of on-time delivery of mailed pieces. Being able to apply mailing expertise at the production stages also puts a printer in a good position to recommend changes to the physical characteristics of a piece, which can result in postage savings.

Printers Stamping Ahead

All of these factors help to explain why commercial printers are finding success entering this market despite an already established base of mailing houses. As one would expect, though, there is a correlated trend of mailing houses now adding digital printing capabilities to capitalize on the synergies.

Mailing still typically gets lumped together with fulfillment services, even in company names, but there is a growing recognition that they are distinct businesses.

The two services were combined as a topic for a session at the recent Vue/Point 2006 Conference in Orlando. Panelist Bill Kwiatkowski, vice president of manufacturing at Classic Graphics in Charlotte, NC, commented that mailing was the easier transition, despite involving four to five months of “learning as you go.”

“Even though our customers had mailing houses they worked with, they weren’t loyal to those firms,” Kwiatkowski notes. “We were able to take the business away.”

Putting aside all the jokes about “postal service” being an oxymoron, those who’ve made the move generally cite the U.S. Postal Service (USPS) as the first, and best, resource for getting started in the mailing business. A particularly good place to start is the USPS Rapid Information Bulletin Board System (http://ribbs.usps.gov), which houses a wealth of background information in its “File Libraries” section.

As noted by another Vue/Point panelist, Mitchell Graphics found the USPS particularly helpful in training its salespeople and other internal staff, reported Mark Potter, vice president of finance/technology at the commercial printing and mailing firm located in Petoskey, MI.

“Treat people at the post office well because they can make or break you,” succinctly advised panelist Frank McPherson, president of Custom Data Imaging in Markham, Ontario.

Help From Associations

Kwiatkowski added that he has found the Mailing & Fulfillment Service Association (MFSA) to be another excellent resource. “We joined the association even before we got into mailing. The listserve they run is very good,” he said.

While otherwise very upbeat about the business—under pressure from an audience member—the Vue/Point panel did admit that enforcing the “customers pay for postage up front” standard practice can get tricky to enforce. That rule is likely to be bent for a good client to avoid missing a critical delivery date.

The requirements for a successful mailing operation can vary greatly, depending on volumes handled and level of sophistication required. Cost savings and speed of delivery depend on the amount of work a shop off-loads from the USPS, chiefly through presorting, and how deep into the mail stream it is able to enter pieces.

Depending on the discount rate, minimum qualifying counts for presorting can range from 200 to 500 pieces. Dropping shipments off at a USPS Section Center (some 350 nationally) is the first step up the chain, but the real gains come from taking mail directly to a USPS Bulk Mail Center (21 sites across the country).

In his book—“Diversifying with Mailing & Fulfillment Services”—author Pete Basiliere identifies four basic areas of investment that he says are required to get started in the mailing business:

* mailing software for address preparation (which should include presorting capabilities to minimize postage costs);

* addressing units, either laser or ink-jet printers (although addressing can be done as part of one-pass production for digitally printed self-mailers and pieces inserted into envelopes with windows);

* inserting equipment for stuffing pieces into envelopes when required; and

* supporting equipment such as tabbers, folders, strappers and envelope sealers and bundlers.

Basiliere says startup costs for a basic operation can range from $50,000 to $150,000, depending on the sophistication and whether new or used equipment is purchased.

The learning curve in gaining the necessary mailing expertise also requires a major investment, but generally is spread out over time. Mailers need to learn the intricacies of the many postal rates (some 3,000 potential discounts) and how to most effectively interface with the USPS.

Depending on Databases

Mailing success begins and ends with accurate addressing. Having a “good” database (mailing list) is essential to ensuring the most cost-effective and timely delivery. There are two components to this: simply ensuring that the data is entered correctly and verifying that the information is right to start with.

Database cleaning and standardization can be done without specialized mailing software, especially if it’s a small list, but such tools can greatly facilitate the process.

This is nothing more than merging/purging duplicate recipients and ensuring that each address record is complete, with every element (name, street, city, etc.) entered in the right place and in standardized, USPS preferred format for things like casing and punctuation (i.e., WI not Wisc.).

Verifying that the address information is correct and current is the more challenging proposition. Mailing systems should offer address validation functionality along with presorting capabilities. Presort software analyzes the addresses to determine the optimum sorting to qualify for the best postage rates and prints out a completed postage statement.

The USPS publishes a list of vendors offering presorting software that is “certified”—chiefly for CASS and PAVE presorting. These and other acronyms related to mailing solutions are explained in the sidebar to the right.

The definitive reference for all things postal—within the United States—is the “Domestic Mail Manual” (DMM). Contained within its more than 1,700 pages are official rates and standards for all domestic mail services. Updates are published monthly in a separate “Summary of Changes.”

The USPS also recommends its “An Introduction to Mailing for Businesses and Organizations” publication as a starting point for new business mailers. It provides an overview of business mail and the decisions involved in designing a mail piece.

Both publications are available in many post offices and can be downloaded in electronic format from the Postal Explorer Website at http://pe.usps.com.

Addressing and presorting get the most attention in mail preparation and processing, but the design of the piece can also be a big factor in the cost and timeliness of its delivery.

A key offering from the USPS in this regard is the Mailpiece Quality Control (MQC) program and certification (http://ribbs.usps.gov/files/MQC/) for mail design. The program incorporates a self-study guide and final exam for certification as a “Mailpiece Quality Control Specialist.”

Design considerations can extend beyond the regulations. PIA/GATF, for example, did test mailings to study the impact of postal processing on digitally printed pieces. It found a much higher degree of damage to pieces that didn’t have a coating applied to protect image areas. The researchers also noted that factoring the mailing barcode into the design of the piece saved it from being marred by the application of a pressure-sensitive label.

A number of resources are also available outside the auspices of the USPS. The aforementioned MFSA (www.mfsanet.org) offers a slate of conferences and other educational offerings, headlined by its annual mailing and fulfillment conference and expo. It also publishes “Mailing Trade Customs” and conducts research, such as the “Pricing Study for Mailing Services Report.”

Another event is the National Postal Forum (www.npf.org) conference and trade show. The forum’s organizer is a not-for-profit educational corporation closely allied with the USPS and dedicated to educating business mailers on the most effective and efficient use of the products and services offered by the postal service.

Or check out the Mailcom conference and exhibition (www.mailcom-conference.com), which addresses the entire mail communications industry: creation, processing and distribution.
Raising the Bar(code)

Apart from rate increases, the biggest news out of the U.S. Postal Service (USPS) of late is what has informally come to be known as the “four-state barcode.” It’s unfortunate that this term has caught on because the intended definition of “state” isn’t the one likely to come to mind first. In this case, the reference is to the four different types (or states) of vertical bars used.

Compared to the 11-digit numeric POSTNET code most commonly used today, the four-state barcode is said to have the potential to encode three times as much information. As a result, a key benefit of the technology is eliminating the need to put multiple types of barcodes on a single mail piece. This will enable the USPS to offer users better tracking of First Class and Standard mail and make it easier to request special services, such as address correction and confirmation of delivery.

Similar technology is already in use by other countries, including Canada. The USPS has reportedly been conducting tests with live mail as a final step toward nationwide implementation.

One potential concern that has been raised is whether greater imaging precision will be required to ensure that this barcode is accurately read during high-speed processing. Initially, switching to the four-state barcode will be voluntary, but strongly encouraged. Full implementation could take years.
Learning the Lingo

In even just a cursory investigation of mailing and U.S. Postal Service (USPS) regulations, one can quickly be overwhelmed by acronyms. Here are just a few of the more prominent ones it helps to know when evaluating mailing solutions.

CASS—Coding Accuracy Support System is a process designed to improve the accuracy of postal codes that appear on mail pieces, such as carrier route, 5-digit ZIP, ZIP+4 and DPC (Delivery Point Code). It is a software certification program that provides a common measure with which to test the quality of address-matching software. The USPS publishes a list (http://ribbs.usps.gov/files/vendors) of software companies that provide CASS-certified mailing solutions.

ACE/ACE II—Address Element Correction (AEC) is a quality process developed by the USPS for deliverable addresses that cannot be matched to a USPS ZIP+4 code using CASS certified address-matching software. By correcting or providing missing elements, AEC turns problem addresses into accurate addresses or identifies them as potentially undeliverable. AEC II provides an electronic process for correcting Change-of-Address orders submitted by customers.

POSTNET barcode—POSTal Numeric Encoding Technique barcode was developed by the postal service to encode ZIP code information on mail for rapid and reliable sorting by barcode sorters. The POSTNET barcode certification program evaluates address printers and mailing software to verify that the barcodes they generate meet all dimensional and mathematical specifications required by USPS equipment.

MERLIN—Mail Evaluation Readability Lookup INstrument is a tool used by the USPS to assist with the acceptance of business mail. It helps mailers to qualify for automation discounts and meet acceptance requirements for bulk mailings. The system automatically verifies First Class, Standard and Periodicals mail against the standards set in the “Domestic Mail Manual” (DMM) for postage discounts, sorting, barcodes and piece counts.

PAVE—Presorting Accuracy Validation and Evaluation is a software certification program that analyzes presort software products to determine their mail sorting accuracy based on the DMM standards. Software products that successfully complete the testing process are granted PAVE certification.

PostalOne!—A Web-based, electronic system offered as a streamlined alternative to the hard copy documentation used in the business mail acceptance process. The system electronically links a customer’s mailing information with the USPS acceptance, verification and payment systems, eliminating most paperwork. It is based on the Mail.dat standardized relational database file format (www.maildat.org).

Source: USPS