April 20 2007 03:35 PM

When I first heard of the new USPS Intelligent Mail 4-State barcode, I thought to myself "What a dumb idea - what if I don't live in one of those 4 states?  What is the Postal Service going to do about the other 46?


But seriously, this research began as a result of receiving a telephone call from a prospective customer. This gentleman runs a mailing house and was beginning his research for suitable replacements for his three aging line printers. Seems that he has a stable of machines ranging from 450 to 1400 lines per minute. He informed me that his line printers would need to be retired when the usage of the new 4-State barcode became mandatory for mail discounts, as his printers would not be capable of printing the new barcode.


I found this statement quite intriguing, quickly imagining some sort of exotic new 3-D bar code, maybe like a PDF-417 or something similar, and immediately began looking for additional information.   I was soon confused by the proliferation of acronyms associated with this - what do you expect when combining technology and governmental bureaucracies?  USPS has trademarked "Intelligent Mail" as its official, updated name for this barcode, under its trademarked "OneCode Vision," for the creation of a whole new generation of NAIUAs (New And Improved Updated Acronyms)!


The new bar code looks a lot like both the POSTNET and PLANET codes which we have all seen gracing our mailing labels. In fact, if you were to flip the PLANET CODE over, and stitch it back-to-back with the POSTNET code, it would look almost identical to the new Intelligent Mail bar code. That's a fitting analogy, as the new code combines the functionality of both predecessors as it encodes more information, while minimizing the amount of space used on the mailpiece. It actually expands the ability to track individual mailpieces, and it provides USPS customers with greater visibility into the mail stream. The 4-State name simply describes the 4 different sized vertical bars used to construct the barcode.  This symbology allows the encoding of 31 digits of information (3 times as much as the current POSTNET code). These digits will include ZIP code, tracking information unique to that specific mailpiece, and the ability to identify services wanted by business mailers (like Confirm and Address Change Services).  All of this information is jammed into a format that can easily be read by existing Postal Service sorters!


Having moved many times in my life, I was already somewhat familiar with USPS "Change of Address" forms as inputs to the Address Correction Requested services, but I had not heard of the "Confirm Service" before.  Being mostly on the receiving end of bulk mail, the thought of tracking each bulk business mailpiece with the precision of a Federal Express or a United Parcel Service never even entered my mind!  I could certainly see great potential in utilizing this "Destination  Confirm" service as a means to boost campaign response rates by timing follow-up email or telemarketing calls to coincide with in home direct mail delivery. My discovery of the "Origin Confirm" service, whereby I can track business reply responses to my direct mail campaign, got me to thinking about a plethora of ways that this service could be utilized to improve operational efficiencies, reduce costs, and improve customer service. Billing companies can better assess and improve their cash flow projections. Call centers and fulfillment houses can better predict required staffing levels. Now your credit card company can VERIFY that you did, in fact, put that payment in the mail at the proper time, and grant you a deserved reprieve from increasing your interest rate! 


While my head began swimming in visions of all the useful things that those 65 little vertical bars might be good for, I actually got rather excited about the glorious future of the new Intelligent Mail barcode.  When I realized that these functionalities of OneCode Address Correction Service and OneCode Confirm already exist under the auspices of the PLANET code, my balloon quickly deflated!  So what's the big deal about this new barcode anyway?  Sure, you can now track up to a BILLION pieces of mail with its 9 digit sequence code (as opposed to the mere million with PLANET).


One benefit of the Intelligent Mail barcode is that it can actually cut the amount of printing in the address area in half, when compared to a fully optioned mailpiece using POSTNET and PLANET codes and the 3 lines of data required for ACS services. The address blocks will look a lot cleaner since they will not be so cluttered.  Aesthetics aside, the consumable costs for ink or toner to address business mail will be cut in half by adopting the new code structure.  This is probably not a significant amount when viewed as a percentage of the overall cost of producing and mailing a piece.  But for the larger mailers (and those who specialize in only the addressing step), this can add up quickly!  Throughput and capacity on the addressing step can potentially double if you only have to print half as much data. There is significant value in that aspect for many!


A related benefit of this technology touted by the Postal Service, speaks to how it "increases mailpiece "real estate" by eliminating the need for multiple barcodes".  In the long term, this may prove to be the single biggest benefit to the business mailing community!  While there is always a benefit in shaving costs, from say $.01 per unit down to $.009 per unit, maybe the real upside opportunity lies in utilizing that "increased mailpiece real estate" to improve response rates!  Improving a response rate from .005 to .01 could mean a doubling of sales revenue, which is a pretty compelling argument for most mailers!


As Customer Relationship Management software (CRM) becomes more popular, and acceptance and usage of the internet continues to increase, more and more customer data is being captured every day.  The most successful marketers of today, have learned how to parlay data captured yesterday, turning it into tomorrows profits!


The first stage of direct mail may be characterized as the offset press era (where the only variable data was the address label itself).  Advances in the technology of line printers and envelope stuffers enabled us to expand the scope of variable data to personalize the letter and the offer. Laser printers now allow marketers the capability to vary not only the data, but to utilize variable images to further boost response rates.  


This new age of mass customization and CRM software allows extreme personalization to drive stellar response rates. Consider this example.  A young couple visits the baby furniture store to purchase a new crib for baby Johnny.  In conversation, the sales clerk learns that Johnny was born 2 days ago.  The transaction is concluded, and the data is entered into the CRM.  Fast forward ahead two years - Baby Johnny has probably outgrown the crib. The couple receives a direct mail piece from the baby furniture store, wishing Johnny a happy birthday.  This "birthday card" also features a picture of the very same model of baby crib that Johnny has been sleeping in, along with a special offer for a new, larger, children's bed!   Do you think that this couple might just be making another, larger purchase from this same merchant soon?


It no longer requires investment in a half million dollar digital color press to accomplish tasks like the above scenario. Recent product introductions have featured continuous form laser printers which can perform tasks like this for less than $15,000!


While the Intelligent Mail barcode does not become mandatory until 2009, I will have to call back that fellow with the three line printers, and explain how he can be increasing his profits today, by utilizing newfound mailpiece real estate for variable data AND variable image marketing!  At line printer price points, I'll bet he can't wait much longer!