The Berkshire Company Blog
When using mail to communicate with your customers, the address is the keystone – the lynchpin that holds together the content, creativity, production and delivery of documents. Keep your system running smoothly by formatting, updating and maintaining addresses as soon as the organization acquires the information.
Companies may attain addresses individually or as part of a list. A prospect or customer may initiate contact through the mail, by telephone or on a website. Or the company may receive a group of addresses - by purchasing a list, or receiving a batch update from a customer (e.g., an insurance company receives a list of employees). In both cases, the addresses should be validated for completeness and accuracy as soon as possible.
The United States Postal Service (“USPS”) has established standards for the proper formatting of addresses (Publication 28 - Postal Addressing Standards). Following the proper standards improves the deliverability of the mail, reduces the amount of return mail and allows for participation in postage discount programs. Companies can use USPS-certified software that puts addresses into the proper format and validates the correct ZIP Code information. The certification is known as the Coding Accuracy Support System or “CASS”.
For individual addresses, a company may choose to validate addresses in real-time or in a batch mode. To check individual addresses automatically, the company’s software bounces the address against a CASS-certified engine using an application programming interface (“API”). Many people who order on the internet have encountered this type of update. They enter an address on an order form and on the next screen, the address is presented in the correct USPS format with the full ZIP+4 code displayed. The API software may interface with CASS software installed locally or via an internet subscription (SaaS).
Using “real-time” correction reduces the numbers of address errors in a database. Postal coding software often makes changes to an address, like the street directional or unit designation. If the information is being entered by a customer service representative, they can confirm the change with the person during the call. If the person is entering information on a website, they’ll be able to validate the coded address.
If the systems don’t allow for an API interface, or if the company is receiving lists of new customers, then batch jobs checking all new addresses should be scheduled nightly. Not only does this practice ensure conformity with postal regulations, it exposes any errors as soon as possible. It also allows the company to start correcting those errors before any mailpieces are sent out – and returned as undeliverable.
For any customer or prospect lists received, the batch job should also include running the list against the National Change of Address (“NCOALink”) database. Using NCOALink is one method of being compliant with Move Update - matching the mailer's address records with change-of-address (“COA”) orders received and maintained by the USPS. There are four approved and two alternative Move Update methods. Mailers can meet the Move Update requirement in the following five ways:
On Friday, June 5, 2015, the United States Court of Appeals for the District of Columbia Circuit (“the Court”) issued their decision on the Exigent Rate increase approved by the Postal Regulatory Commission (“PRC”) in December, 2013. The decision answered petitions by the United States Postal Service (“USPS”) and mailing industry groups against the PRC’s 2013 order. The USPS argued that the PRC’s exigent rate approval didn’t go far enough, while the mailers argued that the PRC went too far. The Court issued a spilt decision.
In their December 24, 2013 ruling, the PRC found that the USPS experienced financial harm as a result of the Great Recession of 2008 – 2009, and was legally entitled to implement temporary price increases in excess of the CPI cap. The PRC denied the Postal Service’s request to make the increases permanent. It found allowing the increases to remain in effect indefinitely would be inconsistent with fundamental postal policies underlying the price cap.
The PRC determined that the USPS didn’t adequately break out losses due to electronic diversion from the losses due to the recession. The PRC analysis determined that the recession caused the loss of 25.3 billion pieces with a value of $2.8 billion. The exigent rate increase would stay in effect until the USPS recovers the $2.8 billion, with the additional requirement of reporting quarterly on revenues generated by the rate increase. The mailing industry expected the exigent rate increase to expire in late summer of 2015.
Appeals Case and Decision
In early 2014, the USPS and 20 mailing organizations petitioned the Court to review the PRC ruling. Although the petitioners were arguing for different decisions, the cases were consolidated, with oral arguments heard on September 29, 2014. All parties hoped for a ruling before the next rate case, but that was not to happen. The decision was issued 6 days after the new rates went into effect.
The arguments of the USPS centered on their calculations on the volumes lost due to the recession, and that the PRC “new normal” rule was arbitrary. The “new normal” concept means the economic disruption had ended, the rate of change on USPS volumes is positive, the USPS has the ability to predict or project volumes, and the USPS demonstrates the ability to adjust operations to the lower volumes. The Court ruled that the PRC was within its discretion in applying the “new normal” rule, and denied the USPS’s petition on that matter.
However, in determining the mail volumes lost, the PRC applied a “count once” rule. The example in the decision is a worker who was laid off has to cancel her cable and no longer pays that monthly bill. The PRC only counts that change as a difference of 12 pieces, limiting the loss to only the first year. The USPS argued that the change should be extended for as long as it takes the worker to get a new job.
The Court stated that the PRC could have used the “new normal” rule to better determine how long they should have counted lost mail. The “count once” rule was vacated and remanded the decision to the PRC “for proceedings consistent with this opinion.”
The Court denied the mailing organizations’ petition for review. With blunt language, the Court dismissed each of the arguments, including the claim that the PRC confused “correlation” and “causation” with their review of the data impacting the loss of mail volumes. The Court could “see no fatal error in the Commission’s analysis.”
Implications to Mailers
The Court’s decision supports the PRC’s approval of a temporary exigent rate case, while it dismisses the PRC’s calculations of the financial loss suffered by the USPS. This means that the exigent rates will expire, but the PRC will need to review their December 24, 2013 decision, and reassess the number of mail pieces lost and the financial impact of the lost postage.
The Court’s dismissal of the “count once” rule means that the PRC’s $2.8 billion loss estimate is too low. With the many economic variables that must be considered, it will probably be several weeks before the PRC issues a new decision. At this time, the PRC hasn’t indicated what steps they’ll take next. It’s likely that the PRC will extend the period of time the current exigent rate increase stays in effect, well past this coming August. That means mailers should plan on the current postage rates to stay in effect for the remainder of 2015.
In the 1990s, my favorite speaker at the National Postal Forum (NPF) was Paul Green. In addition to being a fellow Irish-American from Greater Boston, Paul shared my passion for the mailing industry. Most of all, Paul loved to talk about addresses – and their critical role in the print-mail process. No matter how well-designed, beautifully printed or efficiently created, unless a mailpiece gets delivered to the right recipient, it’s a waste of money.
Paul’s experience with addressing started much earlier. He worked for an insurance company that was one of the first adopters in using software update addresses. The goal was to review the computer database and validate that addresses were compliant with United States Postal Service (USPS) standards. Paul was so essential to the success of the project, the software company hired him.
At the NPF, Paul spoke about how to implement a good address hygiene program and reduce returned mail. He supplemented the numbers, regulations and acronyms with a style that approached evangelicalism. In fact, he started each class with, “In the beginning (pause), was the address.”
Paul may be retired, but his message remains valid. Having the correct mailing address is the keystone to a successful print-mail operation. And this is true whether we’re discussing transactional mail, advertising mail or parcels. To effectively communicate with your customers, you must have a professional address management program.
An effective address management program isn’t an isolated occurrence. Instead, it involves deploying tools and getting feedback throughout the customer communication process. The goal is to keep the customer interaction loop intact and continuous.
Maybe some people don’t see the opportunities of using physical mail, but they weren’t among the approximate 3,500 attendees at the National Postal Forum (NPF) last week in Anaheim, California. Whether it was vendors in the exhibit hall or presentations in the classrooms, people were bullish about the benefits and the future of physical mail. And leading the charge was the Postmaster General (PMG), Megan Brennan.
For the last several years, the principal message from the leadership of the United States Postal Service (USPS) centered on the gloomy outlook for mail volumes, the fiscal crisis created by Congress and the need to reduce mail service to 5-days-a-week delivery. That was not the case this year. PMG Brennan and her team focused on the positive side of the narrative, emphasizing that physical mail is complementary to electronic communication.
On May 31, 2015, the new postage rates go into effect, and mailers need to take action to be properly prepared for the new rates. For most companies, the first day of mailing under the new rates will be Monday, June 1, 2015.
As soon as possible, send an announcement to your customers. If you manage a corporate mail center, that means the departments you service. The notice should include an explanation of the new rates, and how the rates will impact your customers’ costs. If your department or company can help mitigate the expenses through better presort or changing classes of mail, this is the time to highlight those opportunities.
Also provide a chart on the new retail rates, and explain how the rates will impact personal mailings, such as bills. By providing this type of information, you reinforce your image as the expert on postal affairs, and that you add value to the process.
Meet with local USPS representatives, including the acceptance unit. Review the changes with the new postal statements, including electronic submission. If possible, meet with the Business Mail Acceptance unit manager or supervisor. Ensure that everyone is on the same page with any changes.
Talk to postage meter and software vendors. Include your programmers on the call, to make sure they understand when and how the updates will be delivered, how to properly install the updates, and how to test the changes. Establish a phone tree for reporting and resolving any problems with the installation.
Schedule training for your employees about the new rates. Review the new rates and forms for every category of mail your shop produces. Go over the update schedule for the meters and software, discussing any potential impact to production. Lastly, cover the actions the department will take directly before and after the new rates go into effect.
Prepare to implement all the changes at the end of the day on either May 29 (Monday through Friday operations) or May 30 (Monday through Saturday operations). Download and install meter and software updates. Post reminders around your mail center about the new rates. This includes putting printed notices at the meters, the inserters and the customer service desk. For corporate mail centers, also post reminders at internal mail stops. Replace all internal and postage statement forms.
On Monday, June 1, send out another notice to your internal and external customers about the rate change. At the daily huddle with your employees, remind them about the changes and answer any last-minute questions. Inspect every meter to make sure the settings are correct, and review the testing the programmers completed on the software updates. Conduct additional quality control checks throughout the day.
If possible, have a manager or supervisor accompany the mail to the post office at the end of the day. Rate cases are a significant change for everyone involved, and there may be confusion. Have someone with your mail who is authorized to resolve any problems and answer any questions.
To assist mailers with these changes, The Berkshire Company has published a new e-book, “Preparing Your Mail Operation for the U.S. Postal Service 2015 Rate Increase”. This free resource, which includes an implementation checklist, is designed to help managers ensure a successful transition to the new postal rates.
A new Postmaster General (PMG), new postage rate increases, and a new reporting system. Taken alone, any of these three topics would be reason enough to attend this year’s National Postal Forum (NPF), May 17-20, 2015, in Anaheim, California. With all 3 events occurring within months of each other, attendance should be mandatory for business mailers.
PMG Megan Brennan is taking charge of the United States Postal Service (USPS) during a time of uncertainty. The “Network Optimization” program begun under her predecessor has produced mixed results. Expenses have decreased, but so have service levels. Mailers are seeing unprecedented delivery delays across the country. Congress has still failed to take up any bills to reform the disastrous impact of the Postal Accountability and Enhancement Act of 2006. The U.S. Senate hasn’t confirmed any of President Obama’s nominees to the USPS Board of Governors for the last 5 years.
In her first few months in office, PMG Brennan has already begun to make changes. The closures of many processing plants have been delayed. The senior leadership team has seen the first of several needed departures. There seems to be more outreach to the mailing community.
On Monday, May 18, 2015, Postmaster General Brennan will deliver the keynote address to the NPF attendees. We’re hopeful that she will address the issues facing the USPS and mailers with concrete ideas, and not platitudes or “marketing-speak”. We also look forward to the opportunity to ask questions of her and her leadership team. And receive straight answers.
In addition to getting the chance to meet with vendors at the exhibit hall, there will be many new classes and sessions for attendees. We’re planning to learn more about the metrics, the Mailer Scorecard (and potential fines and penalties), mailers’ groups working together, and the migration to Internet-based production. A few specific classes that stand out are: Measuring ROI of Multi-Channel Direct Mail on Sunday morning, PCC + MTAC = Gr8 Synergy on Monday, and Cloud 101 on Wednesday.
Mark Fallon, President of The Berkshire Company, will be presenting 4 classes:
"There are three kinds of lies: lies, damned lies, and statistics." – attributed to Benjamin Disraeli
The U.S. Postal Service’s Office of the Inspector General (USPS OIG) recently released a report entitled, “Declines in Postal Service Mail Volume Vary Widely Across the U.S.”. It’s unclear how much expense and effort was spent producing the report – a report with a misleading title, flawed data analysis and an ineffectual conclusion.
The title suggests the OIG has studied all mail volumes. In fact, the study only focuses on one small category of mail – Single Piece First Class Mail (FCM). These are the individual pieces of stamped mail given to the USPS by individuals and small businesses. Most of that mail is business related – invoices to customers, notices, bill payments, applications, etc. A small portion are letters and personal correspondence.
What’s important to note is that Single Piece FCM represents only about 14% of all mail volumes (Source: USPS: A Decade of Facts and Figures). The remaining 86% of the mail is composed of transactional documents (bills and statements) from companies to their customers, advertising mail (Standard Mail), media mail, periodicals and parcels. The volumes for transactional documents and Standard Mail have been fairly level the last 3 years, or experienced small growth. Those are the areas that the USPS and the USPS OIG need to focus their efforts.
The data collection methodology for this report is flawed. The report is supposed to show changes in the use of mail by geographic area. As pointed out by the website postalnews.com, the report fails to take into account the USPS facilities that have been closed or expanded in the last several years. That means that mail that used to be processed in one area has now been moved to another. Because of this change where the USPS processes mail, the OIG analysis shows that the volumes in the area where I currently live has declined by 96%, and where I used to live the mail has increased by 128%! That would be shocking, if it was true.
In the report, the OIG added a footnote that states “These areas may have data issues or may have experienced significant changes to mail processing operations.” In reality, most of the country has experienced changes to mail processing operations as part of the USPS Network Optimization initiative. Once these data discrepancies were noticed, the researchers should have stopped and found a better method of measurement.
The stunning conclusion of this flawed study: “More research is likely needed to explain why these trends in mail use exist and how they are evolving.” That’s right, the research concludes what’s really needed is more research.
I couldn’t agree more. Except this time, the study should be conducted by someone who understands the true nature of mail, includes the larger categories of mail, and doesn’t use flawed data.
Focusing on Single Piece FCM is a distraction from the real issues facing the USPS. Business mailers produce the overwhelming majority of mail processed by the USPS. Most of that mail has the Full Service Intelligent Mail Barcode (IMb), which allows for piece-level tracking from point of entry to the delivery unit. That data, with proper analysis, would provide useful information for the USPS and their customers – businesses and individuals – as they deal with the issues of today, and plan for a successful future with mail.
“No one sends important documents through the mail anymore.”
“First Class Mail is disappearing.”
“'Snail Mail' is an anachronism is the ‘Age of the Internet’.”
We hear these phrases, or ones that are very similar, on almost every consulting engagement that involves inbound mail. Of course, these opinions are normally from people who don’t work with many physical documents (e.g., IT professionals) or people who are far removed from the daily workflow (e.g., executives). It then becomes part of our assignment to educate everyone on the importance and impact of physical mail on their business.
Of course, there are some truths in these statements. Many documents are sent via email or other electronic transfer methods. The volumes of First Class Mail arriving at businesses have declined. And any mail being delivered by a dawdling terrestrial mollusk probably isn’t that important.
However, the letters, flats and packages arriving at corporate mail centers each day are important. For many customers, the only communication they have with their vendors is through the mail. Companies must develop policies and strategies to service those customers. A sound strategy that includes:
A successful operation is built around people, process and technology. In print and mail operations, the equipment used to process inbound and outbound documents is becoming faster, more accurate and more expensive. Upgrading your systems will mean a significant investment in dollars and other resources.
In past posts, we’ve encouraged the use of a Requests for Proposals (RFP) for major purchases. Companies can use the RFP to fully explain their existing situation and challenges, as well as the goals to be met with the new technology. We recommend that our clients provide as much detail as possible about their current operation – volumes, file formats, processing times, paper types, information technology infrastructure, etc. If possible, give vendors physical samples of the “typical” documents in their final form.
As with RFPs for outsourcing, most companies have standard questions from the purchasing, procurement or legal departments. In addition to those questions and pricing information, here are 20 questions you should ask when purchasing equipment:
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