Mailing Services -- Single-Source Advantages

By Erik Cagle

Senior Editor

Today there is a distinct advantage for printers that offer mailing services to their clientele. Someday soon, there will be an extremely distinct disadvantage for those printers who do not offer mailing.

Simply put, mailing capabilities may seem like a value-added, bonus service presently. Two years from now, those companies that have not committed to this discipline will find themselves in an unenviable minority.

"The sad thing is, if you're not in the mailing arena, you're coming on almost too late," states H. Don Landis, vice president of postal affairs for Arandell Corp., Menomonee Falls, WI. "With the rumors we're hearing about what (regulations) might be coming by 2006, printers that aren't mailing today will have to do it to survive. So they have 18 months to get up and running."

Arandell joined the mailing game roughly 18 years ago, when catalogs, annual reports and calendars were its bread and butter products. Landis and his team rolled the dice on the catalog segment taking off and saw the beauty of finishing off jobs by inserting them into the mail stream. Today, Arandell thrives not only as a producer of quality direct mail catalogs, but also thrives on handling every aspect of the direct marketing process for many of the country's top catalogers and retailers. The company generates annual revenues in excess of $250 million.

"Adding mailing certainly drove more new work and customers have taken to the one-stop-shopping mentality," Landis says. "With catalogs, the in-home dates are so critical. Scheduling became more restrictive, and customers then were waiting until the last minute to send in film or address files. Having the mailing services in-house certainly brought more business here, because we could go longer without receiving film or address files.

"Today, it's not only being able to mail—it's a lot more than that. You have to be sophisticated with drop shipping, knowledgeable of all the various postal options that are available and you have to save your customers postage."

The single most important step to joining the mailing ranks, according to Landis, is a printer's full commitment to the initiative—the financial outlay, the ongoing investment in education and willingness to stay abreast of the evolving mailing regulations.

Going Postal

"A major challenge is finding skilled employees who have knowledge of the postal system—that's a problem because there's not a lot of people to pool from," Landis notes, advising fellow printers that decide to develop their own mailing supervisor to allow that candidate to concentrate on mailing alone.

"All printers are going to have to get into mailing. You'll hear the U.S. Postal Service talk about its cost base, pricing for postage and bottom-up pricing. That lends itself to co-mailing and co-palletizing. If a printer is not capable of doing that, even if they're mailing now, they're going to have problems. In 2006, there could be one of the biggest (rate) increases we've seen in a long, long time."

Customer demand was the driving influence for adding mailing services at Peake Printers in Cheverly, MD. The 70-year-old, family-owned company, with annual sales of $17 million, provides web and sheetfed general commercial printing in two primary markets: metropolitan Washington, DC, and New York. In the DC area, Peake garners a good deal of trade association business and major corporate collateral work.

Peake Printers embarked on the new offering about two years ago, according to John Sample, vice president of sales and marketing. As was the case in adding electronic prepress, computer-to-plate and web printing previously, Peake let customer demand dictate how it should branch out. The new offering has also provided a boon on the print side.

"Customers want a supplier that can take care of both disciplines, and we've had the opportunity to bid on and produce work—now that we offer mailing capabilities—that we would have been excluded from had we been just printers," Sample says.

Sample gives much of the credit for Peake Printers' smooth transition into mailing services to the company's IT manager, Chris Hunt. "We were fortunate to have a guy like Chris with such a strong technical and database background, as well as the ability to assimilate the knowledge quickly and easily," Sample remarks. "Getting the in-house expertise is the hard part, and Chris has really run with it. He's done a good job and that has made a major difference."

Hunt adds that one of the toughest chores was scaling the mountain of U.S. postal regulations in order to find the best prices for customers. Mailing software, in that regard, can play a pivotal role. Hunt and a mailroom manager spent three days getting on-site training, learning about regulations and how to operate the software.

It is difficult to place a dollar figure on the expenditure for mailing services, but it has been compared to purchasing a small press. For Peake, space was not an issue, leaving ink-jetting capabilities and software as the most significant outlays. There is also a time investment, Sample points out, in training the sales force to become proficient on the topic.

"It's a good investment if done right but, if you're not fully committed, then don't bother," Sample adds.

Hunt advises would-be printers/mailers to employ personnel with an understanding of bulk mailing, and it's also wise to develop a good relationship with your local post office. "Fortunately, we have a bulk mail center in the DC area that has really helped us, double checking everything before we submit a large job. They'll make sure there are no stumbling blocks, that there's no surcharges after the mail's been dropped off."

The results have been tremendous for Peake Printers. The printer was able to save one customer $45,000 by switching from First Class to First Class Presort. Peake also wooed a magazine publisher to come on board with the promise of getting its product in the mail two days quicker than sending it out to a mailing house.

Mailing-in a Win

Mailing services are the latest addition in what has become a full customer job assault by Gill's Printing and Color Graphics, located in Las Vegas. Primarily a black-and-white forms prior to 1998, Gill's acquired a downtrodden printer that year and moved into the four-color market. The company currently generates $8 million in annual sales, a total that could well be on the upward move as President Victor Gill gets deeper penetration in the gaming arena.

Less than two years ago, the printer obtained a Heidelberg Digimaster 9110 with capabilities for variable imaging. Laser imaging, personalization and mailing became a full-service bundle as Gill approached hotels to gauge their interest in four-color postcard mailers. Casinos pushed the envelope (so to speak) a little further, seeking four-over-four pieces on glossy stock with variable imaging for customer rewards programs geared to those who frequently "tickle the machines."

"The casinos have player tracking, where you become a member of the club and get points for the amount of play," Gill explains. "Gamblers can win trips, dinners and shows.

"With that, casinos have large player groups that they want to send their rewards program to at the end of the month, so we focused on doing print design pieces for the players clubs. Then we'd run each piece through the Digimaster—we personalize it, barcode it—depending on what they're going to get for the level of play they've reached. We've now migrated into a full-blown facility for mail; we do the whole gauntlet—the laser imaging, ink-jetting, etc."

Gill has been satisified with profits generated from the mailing side, contending that the typical mail facility didn't offer printing and lacked the service component. Service is extremely important to the casino industry, "which makes us jump through a lot of hoops," Gill admits. In the past, he'd receive angry calls from casinos regarding print jobs being late to the mailing house, when that wasn't the truth.

So he queried customers on their desire to have everything single sourced, with product getting in the mail a day or two earlier than would be the case using multiple vendors. It proved to be a winning hand.

"There was the fear factor of making a mistake on the data and sending out something improperly. Then you'd have to redo the mailer, re-address and mail it, and end up paying the postage yourself," Gill says of the ramping up process. "The post office can be as helpful as you want it to be. As long as you show an interest and want to get into this business, the post office will bend over backwards for you. We've invited them to come over and run some seminars for our employees, and periodically we take some of their reps to lunch. We'll take pieces over there and get them approved before we mail them for our clients."

Adding design, direct marketing and the mailing component have enabled Gill to diversify and prevent his operation from becoming pigeon-holed as a one-trick pony.

"This is where we feel our future lies, rather than sitting back with a shingle over our door that says 'Four-color commercial printer,' and then wait for the phone to ring."