In an increasingly digitized world, the print and mail space is all about finding efficiency. As the demand for certain analog marketing methods, such as printing and direct mail, decrease in lieu of digital marketing, service providers in this space have developed strategies such as undergoing digital transformation themselves or curtailing their ineffective services. Even so, many service providers continue the vital practice of postal optimization to ensure effective postal pricing for themselves and their customers.
Procurement, in pursuing the best opportunities for their company, should consider postage price in evaluating the cost model of their print and mail vendors. Because of the cost-savings potential of the postal optimization program for each prospective vendor, procurement managers must evaluate and maximize the postal discount opportunity. By leveraging a print and mail service provider's ability to provide postal and routing discounts through their relationship with the United States Postal Service (USPS), companies can produce savings across all their different letter-type specifications.
One essential method in postal optimization is through data hygiene. By eliminating incorrect addresses or duplicate information, postage cost can decrease with waste reduction and sustainability. These errors include incorrect demographic information, human error, and mistaken addressee identities. Fortunately, service providers could correlate the mailing addresses to the National Change of Address (NCOA). The USPS maintains this database that is updated whenever an individual or business submits a change of address within the past four years. Therefore, cross-referencing against this database could be a potential cost-savings opportunity.
Another method for significant savings is if the post office does not have to do the work to sort the mail pieces. Print and mail service providers have the capability of presorting, or grouping mail by zip code, to achieve this result. With presorting, all mail pieces include an Intelligent Mail barcode (IMB), a 65-bar USPS code used to sort and track. Service providers that can provide full-service IMB services could denote postal optimization cost savings through their electronic postage statements and efficiency in sorting and tracking mail pieces. Moreover, the tracking capability can offer visibility into the labeling, sorting, and organization of the requested mail pieces throughout the process, ensuring quality and proper postal rates. Print and mail service providers also adopt a Coding Accuracy Support System (CASS) solution to validate and certify each mailing address. This solution can populate the mailing addresses with additional information such as the last four digits of a zip code that denotes the delivery route of that mail piece or even a two-digit code that specifies the mailbox for that address. However, presorting discounts must also meet the stringent USPS standards for realized discounts such as letters, postcards, and flats with proper label and documentation.
Additionally, the USPS rewards postage discounts proportional to the volume of presorted mail pieces. As you presort more individual mail piece, the discount provides cost savings while ensuring the same level of service in delivery time. The USPS set different volume thresholds to hit depending on the type of mailpiece (e.g. first-class mail, marketing mail, etc.). The downside is that it requires additional expenses to process and presort the mail pieces; print and mail service providers have sustainable and comprehensive presorting abilities that could warrant external presorting services, providing a reasonable return on investment.
Print and mail service providers commonly use a mechanical sorting process called commingling that reduces costs by arranging mail by their proper postal tier. This mode of postal optimization is facilitated by combining a company's mail pieces with those of other companies to receive postal discounts. Through the combined volume of mail sorted by zip code, these mail pieces receive a reduced cost from the USPS. This is a popular means to reduce the effect of the annual postal rate increase.
Service providers could also use co-palletization. This is another sorting method, but co-palletization can specify mail to their respective Sectional Central Facility (SCF) rather than simply their corresponding Network Distribution Center (NDC). This logic reduces the sorting process for the USPS, resulting in discounted postal rates. This combination of mail pieces is similar to commingling, but unlike commingling, this involves trays of mail on pallets rather than simply mail pieces on trays. In comparison, print and mail vendors are likely to provide a faster delivery time than through commingling at a reduced postal discount rate considering the lower level of qualification on each mail piece.
Lastly, another method used is drop-shipping. This is the actual transportation of mail on private carriers to deliver the mail pieces to a USPS facility closer to its final destination. Drop-shipping is very dependent on the geographical location of your mailing needs, the location of your addressees, and the availability of both USPS and the private carriers. Depending on the fulfillment capabilities of the print and mail service provider, this could be a sustainable service that can lower the overall cost of the mail piece.