"You Can Save your Customers Big Bucks with Bulk-Mail Discounts"
[Column #23, 11/96]

Just when you thought you had a handle on postal regulations, the United States Postal Service (USPS) goes and changes them again. Classification reform is what they're calling it, but it's more like a classification revolution. And automation is the driving force behind it.

In July 1996, the USPS introduced sweeping changes in domestic mail standards to "encourage, manage, and benefit from automated mail, to improve mailflow and to focus processing activities at a redesigned matrix of node facilities." Basically, this means that the more mail can be processed utilizing automation the greater the savings to mailers.

For instance, the difference between nonautomation and automation rates for a basic letter-size piece is 26¢ as opposed to 18¢. Obviously, the savings can be dramatic if you multiply that 8¢ by a mailing of a thousand or million pieces.

Here's proof. A printer recently came to my company with half a million postcards to mail. He had printed the postcards after submitting a low bid against a handful of other Baltimore-area printers. The postcards looked great, but he had not applied the same attention to his understanding of postal discounts. Neither had his customer, who had cut him a $100,000 check for postage, based on simply multiplying the standard 20¢ cost of mailing one postcard by half a million. We used special computer software to analyze his mailing. It showed that, with various discounts, we could save him about $40,000 on postage.

The point is that many mailing facilities are content to take the easy road, rather than take an active role to work with customers to devise money-saving strategies. To make sure we stay current with USPS changes and our customers stay informed, we routinely send sales and production staff to USPS workshops and we conduct regular seminars for customers.

New terms and conditions. The USPS calls these changes revisions in nomenclature. They have been made in every single category of the USPS's Domestic Mail Manual (DMM), from addressing through rates and fees. Briefly, third-class mail is now called Standard Mail. Second-class mail is now called Periodicals, Regular and Preferred. Third- and fourth-class mail has merged into Standard Mail.

Mail preparation and sortation requirements are exceedingly complex, there's even a definition for what constitutes a full letter tray versus a less than full letter tray! In general, if you expect to enjoy a discount, you have to abide by stringent rules. Font size and dimensions of the name and address block, how a piece of mail is folded and sealed, and whether or not letter trays are banded with plastic all determine eligibility for discounts. Also, placement of barcodes and the amount of clear area ("quiet zone") at either end must meet exact requirements.

Addressing discounts. Since the USPS goal is to encourage mailers to prepare their mail so it can be automatically processed, the most significant changes that can affect savings deal with addressing, mail preparation and sortation. While the changes are too numerous to go into much detail here, there are some specific issues of which you should be aware.

To receive an automated mail discount, every piece must be 100% automated. The old requirement was 85%. Accurate and complete addressing is essential. To take full advantage of new automation discounts, correct copy layout and accurate (and complete) zipcoding plus barcoding is required. In other words, you must not only include the correct five-plus-four digit zipcode, you must also include a barcode that contains this same information plus a special two-digit delivery point code.

Obviously, meeting these requirements can mean a lot of work cleaning up mailing lists on the part of clients and their mail houses. (Unfortunately, that's why many still choose to continue to do business the old way.) However, a knowledgeable mailing operation can make the transition much less painful.

Mail preparation and sortation discounts. Generally, whatever you do to save the postal service from doing it, earns discounts. Proper presortation of mailings is key to realizing significant savings.

Since we routinely handle large mailing projects, my company has invested in computer software that is certified by the USPS. This software helps us qualify mailings for any applicable postal discounts. It also performs a variety of other important tasks.

First, it helps us analyze a mailing job and determine which discounts will apply to it. The software automatically sorts labeling information, and while it's at it, it corrects addresses against a database of valid street numbers and zip codes. Finally, the software creates ready-to-print barcodes for each address. When it's done, it prints out a complete audit trail for submission to the USPS. Each of these steps qualifies a job for discounts.

Shipping discounts. As stated above, another USPS goal is to centralize processing activities in designated "node" facilities. This means substantial discounts are given mailers who deliver directly to these centers.

Many larger mailing facilities, such as Bindagraphics, are certified by the USPS to ship directly to these node processing facilities. The USPS periodically sends out inspectors to check our postage scales and mail preparation systems to make sure we are complying with regulations and that our weighing equipment is correctly calibrated.

This certification enables us to drop ship directly to USPS sectional bulk mail distribution centers throughout the country, which can save a large mailer hundreds of thousands of dollars. Again, most smaller mail houses are unable or unwilling to provide such service.

We recently saved a large cataloger $45,000 when we informed him of the substantial savings he'd receive by having us deliver his catalogs directly to regional bulk mail centers. Not only was he unaware of the discount, the mailing house that had been handling the mailings for years didn't know about it either.

The new USPS regulations can not only provide substantial savings, they're also designed to expedite processing, which means that product gets delivered faster. It behooves you to find a mailing facility that stays current with USPS regulations and has the equipment and expertise to help you take advantage of postal discounts. The savings can be considerable.