Postage Unwrapped:  Maximizing Postal Discounts and Avoiding Fees

By RCA Special Guest
Lenny Taylor, Director of Client Relations, OSG Billing Services

Any company that sends out monthly invoices or statements is well aware that the postage involved in these mailings can be over fifty percent of the total cost of printing and mailing. With continuous postage rate increases and stricter Move Update requirements, it grows increasingly difficult to keep postage costs down. The best possible strategy is to become intimately familiar with the USPS programs and make sure that you are not only avoiding any extra costs or fees, but also taking full advantage of all possible discounts.

Move Update Requirement
The USPS is getting serious about enforcing their Move Update requirements. Companies who send out mailings must update their database for customers that have moved and filed a “Change of Address” notification with the USPS in order to be eligible for presort discounts. Whereas in the past, a company would have 185 days to correct address records, as of November 2008, they have only 95 days to effectively make the update.  Another change is that this rule used to apply to only First Class mailings and now both First Class and Standard Class must comply.

In addition, the USPS will be using an internal compliance verification tool called MERLIN to impose a 30 percent tolerance rule for bulk mailings – this means that whether the mailing is one thousand pieces or one million, if MERLIN detects ten new addresses and just three of them have not been updated, that entire mailing fails. The mailer then has the choice to withdraw the mailing or lose the presort discount price, paying an additional seven to ten cents on every piece in the mailing.

It is essential for all companies to make sure that they are adhering to a USPS approved method of compliance. One option is to use ancillary endorsements; having mail pieces forwarded or sent back if the address is not correct, allowing the company those 95 days to properly update their records. The better choice is to work with an outsourcing company that offers NCOALink, a USPS proprietary system containing change-of-address information that is updated on a weekly basis. With access to this program, the company handling the mailing can automatically update change-of-address information during the printing process so no time is wasted on reprocessing mail. The invoices and statements then go directly into the mail stream to customers’ current address.

USPS Annual Rate Increase
On May 11, 2009 the next annual postage rate increase will go into effect, bringing the cost of a First Class letter to 44 cents per piece. Based on the Consumer Price Index, these increases no longer require “rate case” approval and typically impact all classes of mail. Going forward, yearly increases can be anticipated. While all companies should certainly be aware of and budget for the increase, there are other options that can help mitigate the impact of these increases.

Most importantly, companies should make sure that they are taking advantage of postal presort discounts. If they are not maximizing your presort discounts, they are sacrificing savings of between six to ten cents per piece.   

Another consideration for postage savings would be to redesign your invoice or statement to reduce the total number of pages per document, thereby reducing the weight. By utilizing duplex printing, switching from portrait to landscape layout or evaluating page break logic, it’s possible to reduce the number of pages significantly. Each additional ounce is approximately 13 cents!

Another way to mitigate postage as well as printing expenses is electronic bill payment and presentment (EBPP). Companies are turning more and more toward this alternative, as it reduces printing and postage costs internally, and also saves the cost of a stamp for their customers. The convenience and environmental aspects of this solution are favorable to many customers and the adoption rates are expected to continue to rise significantly in the next few years.

TransPromo marketing is the effective combination of a transactional document with a promotion or customer communication. Using the face of a bill or statement to deliver a targeted message to customers is not only cost-effective, but also has a much higher success rate than typical direct mail pieces. While a direct mail campaign may receive a 42% open rate (Direct Marketing Association), an invoice or statement commands an open rate of over 95%. Including envelope messaging or an insert to reinforce this message only increase the likelihood of the intended message getting through to the customer. Using customer data such as location, payment history or current services they subscribe to, a company can send personalized messages and employ one-to-one communication tactics. When a message or promotion is particularly relevant to a customer, they are more likely to read it and take action. The best part of a TransPromo campaign is that it is included in a mailing that is already being sent out; it alters the monthly invoice or statement from a cost to a revenue generator. Spend money, make money and increase customer loyalty – there is truly no down side to TransPromo marketing.

Know That The Check is in the Mail
The USPS offers another service worth using called Confirm®, which allows users to track both outbound and inbound mail pieces on an individual basis. A specific barcode is applied to each piece of mail, serving as a unique identifier that is then scanned at various postal facilities throughout the sortation and delivery process.

This service gives users the ability to track important or time-sensitive mail, such as direct mailings, catalogs, checks and statements and realize the benefits of knowing the exact location of each mail piece. Companies can improve the efficiency of their collection efforts by reducing the number and frequency of mailing collection letters, better forecast and manage cash flow, optimally staff call centers and verify that indeed, the check is in the mail. All scanned data is uploaded multiple times each day and customers have constant access to reports.
 
About OSG Billing Services
OSG Billing Services provides fast, accurate and dependable invoice presentment and distribution services. As a trusted partner, we advise customers on direct billing strategies to improve the overall quality of the invoice and increase customer satisfaction. With a proven-process for invoice design, set-up and production, we can get invoices into the consumers hands quickly and error-free. We guarantee it. The services we offer include: invoice consultation and design, error-free print and mail, targeted marketing programs, an automated document factory, online invoice management and electronic bill presentment and payment. These capabilities have made OSG Billing Services an award-winning direct billing provider. Visit www.osgbilling.com or call 1-888-EASY BILL.