Trends in Print and Mail

Last year, I wrote a letter to my United States Senators (Elizabeth Warren and Edward Markey) about the need for the Senate to confirm President Obama’s nominees to the U.S. Postal Service (“USPS”) Board of Governors. Senator Warren’s staff didn’t think that my letter warranted a response. One of Senator Markey’s aides called my office to share the senator’s support for this issue. He believed that some of the nominees would be confirmed during the “lame duck” session after the elections.

None of the nominees were confirmed. In fact, no votes were taken on the Senate floor.

The situation has only gotten worse. Due to term expirations, the Board of Governors was no longer going to have enough members to constitute a quorum for votes. Last December, using an astute parliamentary procedure, the Board of Governors created a “Temporary Emergency Committee” of the remaining governors. The committee would have all the powers of the entire Board until enough members were confirmed to reconstitute a regular quorum.

And the Senate continues not to act. The Committee on Homeland Security held hearings and confirmed the nominees in July. But there have been no votes on the Senate floor.

This December, two more governors – Ellen Williams and Louis J. Giuliano – will have to leave the Board. Their terms actually ended last year, and they’re currently in the “holdover year”. That will leave only one appointed governor on the Board. One.

It’s clear my letters didn’t have the impact needed to cause the Senate to confirm the appointees. We need more letters. We can’t rely on union leaders or industry lobbyists to raise this issue. We need to take action as individual voters and constituents.

There are over 500,000 employees of the USPS, and 8 million people who work in the mailing industry. If we each take the time to send a letter to our United States Senators, they will have to respond. If you don’t know how to contact your senator, you can find it on the Senate directory. Of course, if you mail the letter to their local office in your state, it will have even more impact.

Below is a template for the letter. Copy, paste, print and post. Add some personal comments of your own. If you can afford the extra $0.49, send a copy to your local newspaper or television station. Engage the media in our cause.

Together, we can demonstrate the power of mail and the importance of the U.S. Postal Service.

At Graph Expo in Chicago this week, I’ve had the opportunity to see some amazing technology – color inkjet printers producing output cheaper than black and white devices, software that integrates physical and digital messaging, and hundreds of finishing devices that will cut, perf, bind, insert and palletize your finished product.

The show demonstrates that print is still a vibrant market and method of communication. But if you’re focused only on production speeds and cost-per-piece, instead of adding value, then you’re headed in the wrong direction. You need to devote your attention to reviewing the entire process - not just the printed document.

Until recently, print was the preferred means of information distribution. Other methods – fax, diskettes, file transfer, and e-mail were considered alternatives to print, but paper was still the standard. Due to the proliferation of Internet usage and improvements in technology, print is now only one of many options – and there is no standard.

This doesn’t mean it’s time to panic, or to throw out those printers and inserters just yet. It does mean you have to widen your sphere of influence from one step in document production – like print/mail – to being involved with the entire document process.

For many operation managers, this requires moving out of the “comfort zone” of paper, hardware and scheduling, and into the worlds of marketing, databases and information technology. IT and marketing professionals need to learn about the new capabilities available in print/mail, and forge cross-departmental relationships. These new hybrid organizations will work together to develop comprehensive solutions to document processing challenges.

At The Berkshire Company, we call this approach Total Process Management. Not to be confused with TQM, Total Process Management isn’t a methodology to define your procedures. Rather, it’s a business philosophy that emphasizes an awareness of the entire process cycle – those elements that take place before activity begins, the activity itself, and the expected results of that activity.

For example, when mailing statements, you may focus on the pieces processed per hour. However, the entire cycle of the document should be considered. In a typical billing operation, the cycle includes:

Using software certified by the US Postal Service (USPS), like the Coding Accuracy Support System (CASS) and NCOALink, companies can format and update their customers’ addresses. To take the next step, mailers have access to additional USPS tools to improve address quality, including the Address Element Correction (AEC) and Address Change Service (ACS) programs.

Mailers may have pieces that were delivered by the USPS, however the addresses don’t generate a Delivery Point Validation (DPV) when run through CASS software. That means the mailer is foregoing postal discounts and is unable to take advantage of all the Full Service IMb benefits. The best USPS programs for this situation are AEC and AEC II.

AEC is best described as “CASS Plus”. With input from the mailing industry, the USPS developed specialized programs that break down the elements of the address, and perform a series of evaluations and comparisons. Through these logarithms, the AEC software is able to add missing elements and correct many errors that commercial software can’t resolve.

For the tougher addresses, mailers can request the AEC II service. Under this program, the addresses are sent to the local USPS delivery unit for resolution. The USPS is then able to tap into their proprietary "Delivery Force Knowledge" system. In other words, they ask the letter carriers responsible for that address for their help. That’s right, a human being with actual knowledge of the problem address – not software – corrects the list.

For unidentified moves, mailers should consider the Address Change Service (ACS) program. With ACS, if an address on a mailpiece is incorrect, the USPS sends the mailer an electronic file with the change of address or other reasons for non-delivery. To participate, the mailer needs to enroll and then modify their address block or mailing label. When the modified pieces are processed by the USPS on the Postal Automation Redirection System (PARS) or Computerized Forwarding System, an ACS notification is generated. The notifications are forwarded to the National Customer Support Center, and then consolidated into a file for the mailer.

There are 4 different methods for implementing ACS:

One aspect of effective address management that needs to be considered is establishing and following a production process with high integrity. In other words, there are controls in place that make sure the correct document goes into the correct envelope with the correct address. Accuracy during production impacts address management by reducing volumes of return mail and ensuring accuracy in postal documentation.

Most return mail received by companies is caused by address issues. The address may be incomplete, incorrect or the recipient may have moved. Many of those issues may be avoided using software to clean addresses when they’re entered into the system, on a regular schedule or directly before print.

Mail may also be returned because of errors in the production process. Smeared ink may make the address illegible. Improper folds can cause the address to not appear in the envelopes’ window. Double-stuffs can change the order of pages – or even worse – insert someone else’s information into the wrong envelope.

Accurate management of the print and mail stream determines the correctness of the documentation filed with the US Postal Service (USPS). Damaged pieces must be removed from the “Mail.dat” file. Postage due amounts, potentially including discount qualifications, need to be recalculated. Under the new Mailers Scorecard Program, all of this will now be tracked by the USPS.

There are different methods of implementing a high-integrity production system. Common characteristics of the best systems include:

+ Read More

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.

Background

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.