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::Table of
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a r t i c l e
What’s UP? The Price of Postage & Shipping!Understanding the cost of shipping while increasing your ROI
Over the years the price of postage increased by over 5% with some products in the double digits. They will be increasing again in May/June of 2011. See Postal Companion's newest issue for proposed U.S.P.S. pricing on my LINK Page.
You should be asking yourself the
question:
At most, you might tell your finance officer to raise the budget by a certain percentage for next year - again. Instead of doing that, there is a proactive approach you can take to keep the rates in check. This approach can keep the rates from climbing while decreasing cost and increasing the efficiency of your communications.
With over 600,000 employees strong, the United States Postal Service, as well as other International Postal Services, has major expenses just like any other company. And other companies are increasing the cost of their services as well. Did you know that when the price of Gas goes up one cent, it costs the Untied States Postal Service millions of dollars? When the cost of Electricity goes up one kilowatt, it costs the Postal Service millions. When the price of Oil, Print Copy and Office Equipment and Supplies such as fax machines, paper, etc. goes up, it costs the Postal Service – you guessed it - millions. What do you think the tragic event of 911 did to the Postal Service Costs? Millions? Wrong. BILLIONS.
What people don’t realize is that they have the power to help the Postal Service keep their costs down so that they don’t have to keep raising the price of the stamp. U.S. Postal Service employees and other major shipping carriers are not looking at individual letters and packages as they did years ago. The machinery used now is really “High Tech” stuff. These machines cost millions of dollars to run and maintain. Should they be there? They certainly should. New machinery is installed in U.S. Postal Service locations daily to keep up with the billions of pieces of mail and packages that flow through the system.
Your customer contract is in there, your order forms are in there, the products your customer ordered via the Internet are in there and your letter to Grandma is in there somewhere to.
How are you handling that? What are you doing to ensure timely and efficient deliverability?
Machines have your mail flying past a camera at around nine letters per second – much faster than the human eye can calculate and sort. If your handwriting is not legible, you misplaced an Alpha or Numeric in the address block or didn’t place an address in the proper position on the envelope; it cannot be sorted by human or machine. But before you blame the Postal Service, look at it this way.
Do you expect the phone company to connect you to the correct line when you don’t dial the numbers in the correct sequence? Why then would you expect the Postal Service to deliver your mail to the correct locations if you didn’t include the proper information and follow a defined designed format?
To understand how you can keep costs down, you should first understand the process. Most likely your letter begins its journey in your mailbox where it is picked up by a carrier and driven to the local Post Office miles away from your home or business. From there, it is put on a truck and taken to the nearest Sectional Center Facility. It is sorted, scanned and given address “Fast Forward” or “Encoded” service. From this sorting process, it is placed on a truck, train or plane and taken to the recipient’s Post Office, placed in their high tech sorting equipment and then driven to the local Post Office for more sorting. It is then delivered right to their door or desk. And what if that person no longer lives or works at that location or you put the wrong address on it? It is brought back to the Postal Service and returned to the sender in the reverse order at no additional charge, all for 37 cents. Looking at it this way, the United States Postal Service is still the best deal in town.
So what can we do to keep the Postal Service from raising their prices?
What they’ve been trying to tell major mailers for years: Automate your mail. Automating your mail not only moves your mail from Point A to Point B timely and efficiently, thereby decreasing Postal manpower and keeping their costs down, but also increases your company’s profitability. The phone companies, credit card companies and major utilities do this. And like clockwork, lucky you, you receive your bills timely and efficiently.
The secret to deliverability and profitability in the mail center is taking just a few simple steps. I Guarantee that if you implement these simple, but important procedures, three major improvements will take place.
My meaning of "ROI" as it pertains to mail.
¨ Reduce Undeliverable Mail ⇨ Less money spent on resending mail ⇨ Duplicates reduced, you don't look silly sending someone 2 or 3 of the same offer. ⇨ Reduction of Customer Service calls
¨ Optimize PROFITS ⇨ Float time of Cash in the Bank ⇨ More orders from customers ⇨ Happier employees
¨ Improve Deliverability ⇨ Timeliness ⇨ Accuracy ⇨ Efficiency
When your written communications and packages are delivered in a timely manner, your company can look forward to profitability and success.
What can you do to achieve ROI (Return On your Investment)?
Make sure the U.S.P.S. has analyzed the following information.
* Database Hygiene * Mail Design * Automation
Let’s break these down one at a time.
* Database Hygiene Ø What is the importance about having a clean database?
The most Important aspect of mailing and shipping for any company is having a clean database because your database is the backbone of your mailing and shipping process; and controls the cost of your Mailing & Shipping programs, incoming, outgoing and returns. Anything, which has to do with written communication or the shipping of a product, revolves around the address of a customer.
You might be asking:
Ø How do I clean this data? Ø What will a clean database do?
There is an abundance of resources available for database cleanup. CASS (Coding Accuracy Support System) Certified software programs are available for purchase from various mailing vendors. In addition, there are United States Postal Service licensed CASS and NCOA, (National Change Of Address), service bureaus that are hungry to help you clean up your data. Each one will negotiate with you as to the cost and services that they champion.
A clean database is the platform for launching your most effective cost saving programs. A clean database ensures increased deliverability. A properly scrubbed database will delete your duplicate addresses and fix information that had been keyed in incorrectly.
The maintenance of the database, however, is up to you. You should clean a database at a frequency that meets your mailing habits. The more you mail and ship, the more frequently it needs to be cleaned up. Think of it as an oil change for your car. You need a well-oiled machine for high performance.
* Mail Design Ø Why can’t I design the envelope or label the way I want?
After you have scrubbed your database nice and clean, it’s time to work on the design of the mailing and shipping labels, envelopes, or forms. Some of the easiest inefficiencies to correct are the mail piece designs themselves.
The envelopes, labels, and forms
need to be examined. The best way to ensure that your mail piece or label
conforms to the rules and regulations set by the United States Postal Service
is to pass them by the MDA (Mail Design Analyst) at your local
The rules and regulations imposed by the Mail Design Analyst are in place to make your mail readable by the OCR’s (Optical Character Readers) and the PostNet Barcode readers used in the Post Office.
Invite your envelope or forms manufacturer partners to work with you to create an envelope or form that fits this criterion. If anyone should understand your communications business objectives when it comes to mail, it should be those representatives who sell you their forms and envelopes. If they don’t have this kind of knowledge, I would suggest having them meet with the Mail Design analyst so that they can better understand how to serve you and your needs or search further for a company that is proactive with Postal Rules and Regulations.
Proper addressing has 4 basic rules. (A Fifth rule for foreign addresses)
1. ALL CAPS 2. NO PUNCTUATION 3. LEFT JUSTIFIED MARGINS 4. ZIP CODES 5. Foreign Mail (Country Name in ALL CAPITAL LETTERS on BOTTOM Line OF THE ADDRESS)
Window Envelopes: The only information that should be showing through your window envelope is the address. Any other information is called “NOISE”. NOISE IS BAD!
Do the Tap Test
When designing an envelope or label, the creative must understand that their designs are sometimes interpreted as noise. These departments must bend to the rules of proper addressing if no barcodes are used (see Automation). When noise exists around an address and it is not bar-coded, you are in trouble. Trouble means inefficient service, inefficiency means bad delivery and no discounts, no discounts mean higher costs and less profit.
* Automation Ø What is Automation?
In a word, it is "Barcode". Barcodes are the most important printed component to efficiency and savings. These binary marks represent a complete address. A Delivery Point Barcode represents the address including the directional, suffixes and prefixes along with the suite, floor, room or PO Box and zip+4 codes.
Make sure you have an eleven-digit barcode. (DO NOT PRINT BARCODES IF YOU DON’T HAVE THE ZIP+4) Having your database clean and up to date, using the proper addressing formula, and having the address in the proper format, will ensure that the barcode is correct. If barcodes are used, the OCR’s (Optical Character Readers) are not used, the mail piece or package will go directly to the barcode readers.
This is good news for marketing and design people who are hired for their creativity in branding because it gives them more area on the mail piece to work with.
If the information is correct and up to date, you will receive an AUTOMATION DISCOUNT. The best way to achieve this is by using U.S.P.S. Certified In-house Software or by using a Certified Licensed Presort Bureau.
The price of postage might be increasing, but so will your ROI if you:
⇨ Clean up your databases as often as possible
⇨ Design your mail piece or shipping label using basic postal rules & regulations
⇨ Automate your mail by using an 11 digit Postnet bar-code
Your Communication Efficiencies will be Increased Your Costs will be Reduced Thereby Increasing your Return On Investments, Profits and your Company’s Success
HINT: For more information regarding mailing and shipping concerns and hints visit: www.usps.com
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*Pricing & Solutions change daily, check with your mailing and shipping companies for most up-to-date processes & pricing. |
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with
your window envelope. It's important that after you have placed your contents
in the envelope that when you tap the envelope to the bottom, then flip it
and tap it to the top, then to one side and the other that only the address
shows through the window and that all of the address be able to be read. 
