Different types of mail serve divergent needs.

Mailers must look to their unique business model

to choose the 'right' option for postage evidencing

To ensure that the stream of revenue-producing mail flows without interruption - and is produced and mailed at the lowest possible cost - production mailers must gain a full understanding of their business needs and how today's solutions can meet them.

With mailers evaluating postage evidencing options in the midst of Phase III of the USPS' Digital Meter Migration mandate, this two-part series examines the most frequently used and cost-effective postage evidencing options for business mailers - permit imprints and digital metering - and discusses the optimal applications for each. Part I, published last month, provided an overview of the situation and discussed the strengths and weaknesses of permit imprint postage evidencing.

Solutions for Non-Identical Weight Mail: The Manifest and the Meter

In business, the best course of action is often a flexible course of action: as business objectives change, tactics must change with them. Different types of mail serve different business needs. It's important that postage evidencing solutions - so critical to presort mailing processes - address the mailer's business model and provide the flexibility to adapt to future change.

As we pointed out last month, mail sorting options include using presort software to sort the mail and document how it should be placed in containers, doing machine mail sorting with an in-house multiple line optical character reader (MLOCR) that can read the address printed on the mail piece, or outsourcing to a presort services company. We also noted that permit imprint mail is ideally suited to identical piece weight mail. But for variable piece weight mail, the manifest option for presort and digital metering for machine-based sorting provide a superior alternative.

For mailers that have large, ZIP Code-dense mailings of non-identical piece weight mail, most notably in the telecommunications and utilities industries, a permit imprint with a manifest combines the discounting of presort with the ease of workflow offered by permit payment. Manifests, combined with information printed on each piece of mail, document non-identical weight mail pieces and enable the USPS to verify these mailings and accept payment by permit. In this way, manifests can both provide evidence of postage payment and achieve postal discounts.

Unless ZIP Code densities are high, a machine-based presort of non-identical weight mail can earn a mailer much better postage discounts. If the mailer processes a large number of pieces spread out across many mailings each day, using an MLOCR sorter in-house to commingle these mailings is the best processing method.

The major barrier to manifesting is obtaining accurate (and somewhat costly) information on mail-piece characteristics. In addition, the USPS requires mailers who use manifesting to implement quality control procedures that can impact the workflow and productivity of the mailing operation. These factors helped to drive the creation of postal manifesting software solutions, such as the Pitney Bowes DFWorks tracking solution platform, that builds a more accurate, USPS-compliant manifest based on the actual results of production. This manifesting solution is a component of a comprehensive mail management software suite that allows mailers to address many of the production and financial management challenges involved with producing mail.

The Reliability, Cost-Effectiveness and Power of Digital Metering

When doing machine-based presorting the most cost-effective and reliable method of evidencing is to use a postage meter to affix postage to your mail at a rate based on the weight of the piece. When the MLOCR is able to determine the best rate at which postage should be paid, the mailer pays the difference between the rate at which the mail was metered versus the mailing's actual postage rate as determined by the sorter.

If either the total piece volume or number of mailings is too low to provide a good return on investment on the MLOCR, outsourcing to a presort service bureau will yield savings both in postage and labor. Doing machine based-sorting, whether in-house or outsourced, can also simplify the mailer's workflow to yield substantial labor savings.

In the past, decisions about postage evidencing were made based on the broad needs of the mailer's business. For example, while some of the larger telecoms and utilities use permit mail, most transactional mailers processing mission critical bills and statements depended on the flexibility and reliability of the metering process.

Over time, this has given mail with meter indicia a high status for recipients compared to permit mail. The meter indicia itself has come to signal that a particular mail piece is important and a "must read." As a result, mail with meter indicia tends to have a higher "open rate" than mail with permit indicia. This created a conundrum for direct mailers, who had been willing to sacrifice open rates for low cost mass production printing and the easy workflow of bulk rate processing.

But now direct mailers have a "win/win" option: print on demand (POD) and "intelligent" inserting solutions that challenge long-held assumptions about how to reach prospects most cost effectively. Added value such as color and variable data enable greater personalization, which leads in turn to high open rates. New technology such as the DM Infinity Digital Mailing System makes metering-on-demand direct mail a more viable option. As the USPS adds programs like mail tracking and "date certain" delivery to standard mail, direct mailers will find even greater value in metering their mail.

First impressions are often critical, and a poorly produced piece of mail can send the wrong impression, derail recruit efforts and erode customer confidence. Even worse, a piece with the wrong or outdated customer information or with the wrong document inside could cost that customer's business.

Professional-looking, accurate and personalized mail is a critical part of many companies' Customer Communication Management (CCM) strategy. The ability to quickly personalize mail pieces with postal inscriptions, endorsements or customized messages makes mail stand out as a "must-open" piece. Service bureaus are adding more value to customers by personalizing mail pieces with company logos, specific vertical market messages or other inscriptions that further increase open rates.

Summary: Link Postal Evidencing With Business Objectives

Whether a mailer's business model supports permit payment of identical piece weight mail, manifesting non-identical piece weight mail, digital metering or any combination of the above, it's important that implementing these solutions be done without complicating or slowing the production process. Loss of productivity can easily offset the savings earned through postal discounts. Having the flexibility to produce permit imprint or metered mail without changing your production process and managing large inventories of envelopes with pre-printed indicia will improve rather than degrade productivity.

The two major reasons that the USPS is driving towards digital compliance are security of funds and the need for Information Based Indicia (IBI), a new type of postal imprint designed to provide the most secure means of postage evidencing. Mailers should ask themselves which method provides the best solution for reducing costs overall, has the best funds security for postal dollars, coheres to the future goals of the USPS to track mail and reduce costs - and addresses their business's evolving requirements. Then they should turn to solutions providers who give them the flexibility - and the multiple solutions ­- that address their dynamic environment.

Lloyd M. Moss is director of postal affairs and presort solutions for Group 1 Software, a Pitney Bowes company. For more information, please call 301-731-2300 or visit www.g1.com.

DFWorks, DM Infinity, Pitney Bowes, Reset-On-The-Fly are trademarks of Pitney Bowes Inc. All other trademarks are property of the respective owners.