postal rate freeze

Direct Marketing

USPS Announces No Rate Increases: How that Affects You

By Mike Porter, President, Print/Mail Consultants

lettersThe USPS recently announced there would be no postage rate increases in 2010 for market-dominant mail. This includes First-Class and Standard mail as well as periodicals. I think this was a good move. A postage increase now might have spurred an acceleration of mail moving to non-USPS delivery channels. That’s still happening, but hopefully at a pace that will allow the Postal Service to adjust and adapt.

Did the postage rate freeze announcement cause you to re-think your short-term mailing strategies?

It certainly gives mailers a little more breathing room. But don’t get too comfortable. There are changes coming. A significant price increase probably would have accelerated the decline in mail volumes, but holding the line on postage for the next year isn’t likely to reverse the migration to alternative communication channels that is already underway.

Just as the USPS has had to anticipate a scenario of shrinking volume, mailers should be planning now for a world in which the measure of their success is changing. Going forward, the emphasis will be on the effectiveness of each mailpiece instead of how many units can be produced at the lowest cost.

Cost and productivity will still be important, of course. But making sure every mailpiece contributes to the overall goals of the organization will be more prominent. And your volumes may decrease, making the remaining mail even more valuable.

Did You Plan on Paying More for Postage?
Chances are good you already budgeted for a postal increase, probably somewhere in the neighborhood of three to four percent, maybe more. Even though it is tempting to save that money now that you know rates will be stable, I recommend that you invest some of those budgeted funds in upgrading your operations.

Using more dollars for postage would have had absolutely no effect on the value of the service you provide to your in-house or outside customers. Why not take some of that money and use it more strategically?

One of the best ways to do that is to spend a little on an analysis and improvement project. You should do this first – before you start to make capital investments in hardware and software.

Here’s why.

There is waste in your operation. Even after the gut-wrenching decisions you’ve made over the last year to comply with corporate cost-cutting directives, there is still more to do. Sometimes lots more. I have yet to visit a document operations center where we did not recognize an opportunity to lower costs, raise productivity, or both.

Decreasing waste and streamlining the workflow can result in a reduction or even the elimination of a planned investment in other areas. If you can improve your throughput in the finishing department, for instance, perhaps you can get by with a relatively inexpensive upgrade to your inserting equipment instead of a replacement.

That is why you should do a comprehensive analysis first. Funds are limited. Make sure that you get the maximum benefit from what you spend, not just a quicker way to do the wrong things.

The Savings Are Not so Obvious
Most document centers already reduced staff, eliminated travel, froze wages, and cut training to make their budget numbers.

But a document operation that has been around for any length of time has plenty of other savings opportunities hidden in the work they do every day. The trouble is that those opportunities are hard to recognize from the inside. And even if you do discover them, they are tough to fix on your own. The solutions often require the cooperation and consent of multiple departments. The competitive environment in most companies and the lack of influence that the print and mail center management has over other departments make progress extremely difficult or politically unwise. No one wants to make enemies or risk their jobs in an economy like this!

Put Some of that Money to Work for You!
Document Operations managers often tell us they can’t meet the needs of their organizations without upgrading their hardware or software. Eliminating waste in one part of your workflow frees up money that can be used to beef up other parts that allow you to meet the communications requirements of your customers. The money you need may already be there – you just have to find it!

Maybe you’ll want to do matching. You can invest your discovered savings in cameras for your inserters. Or perhaps you’ve seen the value of intelligent mail and need get some help to develop processes to take advantage of some IMB features. Save some money by optimizing your existing operation and use those funds to acquire expert help to develop your new capabilities.

Think about the direction in which your operation must travel over the next two years in order to be successful without increasing mail volumes and make a plan to get there. Spending some already budgeted money on your own operation instead of on postage may be just the opening you need to take the first step.

Mike Porter is an expert in Print and Mail operations and President of Print/Mail Consultants, an independent project management firm that helps companies nationwide be more productive, adapt to changing requirements, and lower costs in their document operations. For more information on training, coaching, or getting your projects done, visit www.printmailconsultants.com or email Mike directly at mporter@printmailconsultants.com.

From Mailing Systems Technology. Click here for a direct link.

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