Archive for the 'USPS Compliance' Category

How Intelligent Mail can drive business results – Part II

Published on January 13, 2010 in Intelligent Mail and USPS Compliance. 0 Comments Tags: , , , , , , .

In 2010, most print and mail managers are making plans to switch over to the new Intelligent Mail® barcode as the postal savings alone could represent hundreds of thousands of dollars. Your company’s transition to Intelligent Mail® will generate millions of data points that can help you improve marketing, enhance customer service and streamline billing and collections. Last week, we looked at how this data could improve marketing and customer care.  Today, we explore the value in operations and billing.

Operations: Make Smarter Decisions

Reduce Cancellations. Every week, utilities, telecoms and others spend thousands of dollars turning off service, only to reinstate customers a few days later when payment is received. These costs—including the corresponding strain on customer relationships—can be avoided in many cases, because you can gain visibility of incoming payments up to three or more days in advance.

Manage Risks and Decrease Fraud. When high-value mail such as checks and credit cards do not reach their intended destination, that could signal theft or fraud. The ability to trace delivery from beginning to end offers companies a powerful tool that can help manage risk and identify issues before they become a liability.

Save Millions on Returned Mail. The true cost is far greater than many executives care to admit. When you add up the print and mail costs for the initial mailer, the increased call volumes, handling of returned mail, and the subsequent remailing costs, you could find yourself spending between $3.00 and $11.00 per piece. And that’s not counting the lost sales opportunities, communication delays, customer dissatisfaction and delayed revenue. With Intelligent Mail®, the data needed to update addresses and reduce undeliverable mail is already in-house.

Billing: Follow the Money

Expedite Invoicing. When an invoice reaches its intended recipient late – or not at all – your revenue stream may suffer. The United States Postal Service estimates that 34 percent of mail contains address errors that could delay or prevent proper delivery. With this new barcode, you’ll receive address corrections and can update records before the next invoice is sent.

Improve Lockbox Performance. Time is money, and the time it takes for your lockbox service to process and post remittance checks can cost thousands of dollars in interest revenue. By monitoring the flow of payments from the time they leave your customers’ hands to the time revenue is posted to your account, you can identify potential gaps in the process and take the necessary corrective action.

Collect More Effectively. With precise knowledge of when customer remittances enter the postal system, you can eliminate excuses (“the check is in the mail”) and prioritize who and who not to contact—saving five dollars or more for every call you can avert. You can also suppress production of unnecessary dunning notices, which leads to big savings.

The new Intelligent Mail® barcode is required under postal regulations in order to qualify for the lowest postal rates, but the value outside of the mailroom is even greater. Bridging the gap between the mailroom and critical business operations, solutions such as MAIL360TM and AuraTM software turn barcode data into actionable information. If you have other ideas on how this new event-based intelligence can drive business results, please add to the conversation!

What’s next for the USPS?

Published on November 3, 2009 in Innovation, Postal Pricing and USPS Compliance. 5 Comments Tags: , , , , , , .

On September 30th, Congress approved legislation that gave the United States Postal Service a one-year reprieve on its obligations to pre-fund retiree healthcare benefits—averting a potential crisis as the USPS did not have the cash on hand to make this payment. (As noted previously, no other federal agency is subject to this requirement.)

With fiscal year 2009 in the books, the USPS now turns its attention to 2010—and the outlook for postal profits remains bleak. Addressing the National Press Club last month, Postmaster General John Potter remarked:

Without a big change in the way we’re required to do business, we’re likely looking at a deficit of more than $5 billion dollars—for years to come. This is a critical public policy issue.

We’ve commented previously on the various efforts the USPS has taken in light of their current budget challenge. And you have to give them a lot of credit. This past year, like a lot of companies, they stepped up their cost cutting, trimming $6 billion from their expenses and cutting almost 115 million work hours. All while service and customer satisfaction reached record highs.

One also has to agree that mail still ranks as a critical communication vehicle that connects businesses with their customers. Even with the recession, the USPS delivered 176 billion pieces of mail last year and generated over $68 billion in revenue—sales figures that most companies would envy.

The problem, according to Potter, is that the business model created to support the mail simply doesn’t work anymore and changes are necessary.  We agree.

So as we ask “what’s next” for the USPS, it is likely that you can expect changes to fall into a few categories: operational, legislative, marketing and innovation. 

  • Operational. We expect postal officials to continue their work to create a more effective, more streamlined organization.  Technology and process re-engineering will continue to play an important in role in cost reduction.
  • Legislative. The Mailers Council—a coalition of corporations, nonprofit organizations and mailing associations—has a vested interest in effective, low-cost postal service.  So it’s not surprising that they’ve published a white paper calling for new laws that would allow the USPS to compete more effectively.  Among their recommendations: making it easier for the Postal Service to reduce its head count, close unneeded facilities and consolidate its retail network. They also propose changing the pre-funding schedule for retiree health benefits. Plus, they would also like to see a study on whether five-day-a-week delivery makes sense. Some would argue that these are the same benefits enjoyed by other companies—the freedom to make well-informed business decisions—and clearly the USPS would welcome these legislative changes.
  • Marketing. In recent months, we have seen the USPS employ marketing tactics that are common for most businesses, but new for postal officials. The ‘Summer Sale’ and the current First-Class Mail incentive program provided mailers with good reason to mail more – a concept that may be continued if talk about a “Winter Sale” holds true. The USPS is also looking to maximize the value of the 37,000 retail outlets known as “Post Offices” by expanding the breadth of products and services offered at these locations.
  • Innovation. From its roots in ancient Persia where relay messengers delivered mail on horseback, to today’s barcodes, priority services and e-notifications, the postal industry has demonstrated an ability to reinvent itself over its 4,000-year history.  So it was refreshing that PMG Potter did not conclude his speech at the National Press Club by discussing how to get through another year. Instead, he talked about taking a fresh look at the future of the Postal Service and its role in serving America—examining what the Postal Service will look like 7, 10 and 15 years from now.

Potter spoke of establishing a public dialogue about the future of the Postal Service – and we invite you to be a part of it.  What do you want the USPS to do next? When you think ten years down the road, how might the Postal Service add value to your business?  We welcome your thoughts.

The Impact of Returned Mail

Published on September 23, 2009 in Move Update and USPS Compliance. 0 Comments

This month, we interview Mike Cooper from Pitney Bowes Business Insight.  Over the past year, Mike has met with organizations across the country, gaining first-hand insights on how returned mail can impact bottom line results.

Who should be concerned about return mail?  It’s a problem that affects every organization. In the US, 2.5% of First-Class Mail is returned every month.  In Canada, it can be as high as 4% – 5%.  And we’re talking about important customer communications, such as bills and checks.

It touches so many customers, why do these problems linger? Most organizations we visit have traditionally looked at return mail from the perspective of the mail room.  Mail is returned, corrected, resent.  People calculate what it cost to resend mail then just assume it’s a necessary cost of doing business.  They assume that the mail room costs are the only impact. 

But the impact goes beyond the mail room? Absolutely. The bulk of the costs associated with returned mail are incurred outside the mailroom. The fact that returned mail impacts so many departments, though, can make it difficult to quantify.  Five percent of incoming cash could be delayed for a month or longer, which has a huge impact on borrowing and cash flow.  Call centers will spend $5 to $20 contacting customers by phone to follow-up on bills and checks that were never received.  We’ve even uncovered insurance companies that were losing customers worth $500 sales because they simply lost contact with them.  And these are just a few examples. 

Given that it might take 40 days or more for the physical piece to actually be returned, it’s a reoccurring problem, too.  In many companies we’ve studied, nearly half of the returned mail had already been returned at least once before – but unless you make process changes, you just can’t deal with the problem in a timely manner.  In a large organization, the total cost or returned mail can quickly reach the mid-seven figures.

How can a company like Pitney Bowes Business Insight help? With our expertise, we can investigate the problem of returned mail across departments and identify what improvements could provide the quickest financial gain for our clients.  There are ways to shorten cycle times and reduce handling costs.  These steps will lower the incidence of returned mail overall.  After an investigation, we know enough to make specific process recommendations; and under our new business model, we will make those changes and guarantee our results.

What are some areas where improvements can be made? First, you want to eliminate the physical handling of returned mail.  It’s slow, expensive and prone to error – so you need to understand which functions could be handled electronically.  Secondly, the USPS offers a number of technologies that help organizations identify problems and deal with them sooner, and we help our clients leverage processes and technologies more effectively.

What advice would you give mailer today? In many companies, the sheer size and scope of the returned mail problem can be daunting – and some use that as an excuse to avoid taking action.  In actuality, given the budget pressures that everyone faces these days, the size and scope of this opportunity should be the reason why it should become a high priority initiative.  Some companies have literally saved millions by addressing this head on.

If you are interested in learning more about how you can overcome the problems and costs associated with returned mail, contact your PBBI representative.

Address updates in the cloud

Published on September 22, 2009 in Move Update, PBBI Solutions and USPS Compliance. 0 Comments Tags: , , , , , , .

On Demand and Software as a Service (SaaS) offerings have become more prevalent because users don’t need to deal with installation, deployment and maintenance.  These affordable, pay-as-you-go models provide global accessibility and broad functionality.

Given the heightened focus around USPS Move Update compliance, it should not surprise you to learn that we now offer a hosted version of our popular Pitney Bowes Business Insight address update solutions. 

The VeriMoveTM Access Move Update® Service helps you capture move updates in real time, so you can step up to USPS regulations, avoid costly penalties and better connect with your customers and prospects.  Unlike upload or email services, the VeriMoveTM Access desktop client handles all network processing tasks and provides active job status information.  Just set up your job, submit your jobs and obtain the updated lists you need to automate change-of-address processing, maximize postage discounts and contact customers.

As noted here previously, the USPS will implement a new process on January 4, 2010 to determine whether or not additional postage is required on all presorted First-Class and Standard Class mailings.   If you’re looking for cost-efficient ways to comply with USPS regulations, we now offer a free trial version of VeriMove AccessTM.  Contact me at Cynthia.Williams@pb.com and we’ll be happy to set that up for your organization.

Mailers prepare for January 4, 2010 – with much at stake today.

Published on September 11, 2009 in Move Update and USPS Compliance. 0 Comments Tags: , , , , , , .

As the new Global Portfolio Director for Communications Intelligence, I am continuously impressed by the way you, our customers, juggle corporate demands with the communication needs of customers and prospects. Having joined Pitney Bowes Business Insight from the industry, I can certainly relate!

On top of that, together we must also support a broad range of USPS initiatives designed to improve the overall flow of mail. Recently, postal officials announced their long-awaited plan on how they will be dealing with move update compliance.

Undeliverable mail costs the US Postal Service over $1.6 Billion a year, and mailers who contribute to this problem will soon be expected to pick up more of the tab.

Postal officials have implemented a new Performance Based Verification system to monitor compliance with the Move Update standards that took effect back in November 2008.  The verification processes utilizes the PostalOne! and MERLIN systems to evaluate whether mailers have updated and changed addresses according to postal rules.

I wanted to take the opportunity to call your attention to January 4, 2010, the date on which this approach will be used at the point of mail acceptance to determine whether additional postage is required. Mailers who wish to avoid these unexpected costs must be able to certify that their mail was prepared using an approved Move Update method-but the time to act is now.  (To learn more about solutions, tips, webinars and resources, visit our move verification page.)

You should also read the new PBBI white paper-The Truth About Move Update- which recaps the new standards, details the penalties you may expect, and provides insights into the impact that effective address change management can have on your organization.  When you download this paper today, you can learn about best-in-class solutions and the next steps necessary to ensure there are no surprises down the road. 

At Pitney Bowes Business Insight, my team and I will be here to provide the up-to-date news, practical tips and strategies, and cost-effective technologies you need to meet the demands of your company, customers and postal compliance.  I am glad to be the newest addition to the team and look forward to meeting and serving you in the months ahead.

Mailers ‘get’ the business of mail

Published on August 27, 2009 in USPS Compliance. 2 Comments Tags: , , , , , , .

At this month’s MTAC meeting, I had the chance to speak with mailers about the actions being taken and proposed by the Postal Service in light of their current budget challenge.

Now the Mailer’s Technical Advisory Committee certainly attracts organizations who have a vested interest in the future of mail, including corporations, service bureaus and industry players like Pitney Bowes.  But what struck me the most as we listened to a series of reports, updates and strategies – people are thinking about the USPS as a business.

Perhaps the recent economic turndown, in which many industries experienced cutbacks and shortfalls, has led to more understanding ears. But as postal officials take steps to make sure no stone or pebble goes unturned – you could see heads nodding.  Everyone seems to get that we’re talking about an entity with revenues and costs and at the end of the day, it all has to work.  Let me share some of initiatives that came up…

Flats Sequencing Systems

The USPS is looking to be more flexible. Originally, the USPS planned to roll out new equipment so they could automatically put flats in walk sequence, a move that could save carriers two hours a day and millions of dollars. Now, flats volume is down 14% this year (on top of an 11% decline last year) and planned sites no longer have the density to justify these football-field sized systems. While the roll-out is still moving ahead, the USPS is redirecting when and where these systems will be installed.

Network Distribution Centers

Postal officials are also re-looking their core distribution model.  The biggest change is the conversion of Bulk Mail Centers (BMC’s) to Network Distribution Centers (NDC’s), which reworks decades-old logistics and workflow to leverage more efficient centralized distribution centers.  Moving from BMCs to NDCs will save $300 million.

HR22

While some of the changes appear to be accounting adjustments, they greatly impact cash flow, which is essential for payroll and day-to-day operations.  One of the most critical initiatives is H.R. 22, now in Congress, which would allow the USPS to pay for healthcare benefits for current retirees out of its Retiree Health Benefit Fund – which currently hovers around $32 million – instead of its operating budget. If passed, it would save the USPS an average of $3.5 billion per year over the next eight years.

5 Day Delivery

The proposal that is garnering the most press these days involves a move to five day delivery.  Eliminating Saturday delivery (the most likely choice) would save the USPS nearly $3.2 billion. Clearly, there are issues and obstacles involved – but none of the mailers who heard these updates went into panic mode.  In some ways, there was a sober understanding that business is business.  Under the current plans, Post Office would remain open, delivery to PO Boxes would continue, and remittance mail would be available via PP Boxes and Caller Service.   Approvals from Congress, the PRC and affected unions would all be required, so stay tuned.

This covers just a few of the dozens of programs discussed (we’ll cover Move Update and the Intelligent Mail® barcode in separate posts), but hopefully this will give you a flavor of what’s in store.  Interestingly, with improvements and work hour reductions equivalent to 60,000 full time positions, the existing efforts have already generated year-to-date savings of $5.9 billion – with 96.3% of all First-Class Mail reaching its final destination in three days or less.

If you have any questions about these planned initiatives, jot a note in the comments below.  Meanwhile, we’ll continue to keep you posted.

Postal inspectors targeting business mailers

Published on August 24, 2009 in Address Quality, Move Update and USPS Compliance. 0 Comments Tags: , , , .

At our user’s conference in June, a number of mailers mentioned that they had recently been contacted by USPS postal inspectors. The topic of these conversations quickly turned to compliance, and agents wanted to review how these companies met USPS move update and address quality requirements.

This initiative was also described in a new white paper from Venable, one of the top business law firms in the U.S.  Venable reports that the Postal Service is looking to collect more postage on mail that has already been delivered by identifying violations of Move Update requirements. In certain cases, investigators “seek evidence that the mailer entered improper mailings knowingly or intentionally,” actions that could trigger a costly claim under the False Claims Act. 

Some mailers welcome this action. After all, if you are going through the effort to comply with USPS requirements while others are taking the discounts without doing all of the work, what’s fair is fair.

Other mailers are concerned.  Even if there is no malicious intent, some companies simply do not do a great job with move update compliance-and a postal audit could result in penalties.

All mailers should be prepared.  Your company could be targeted for an inspection simply because you receive returned mail (which narrows it down to everyone).  First of all, you need to make sure your mail processing teams understand the USPS requirements.  Secondly, that you adhere to these requirements on every mailing-and document your processes.  And, just as important, that you take steps to close the loop and update records once you’ve been advised of an address change.  (To learn more, feel free to contact your Pitney Bowes representative.)

If you are contacted by a postal inspector, you should treat this inquiry seriously.  As postal inspectors are federal law enforcement agents, you should contact you corporate counsel immediately.  The potential financial exposure for a national mailer could easily be in the millions.