Recent postage rate increase adds more expenses for your business

By Harry Herget, syntelllc.com

When the Postal Regulatory Commission rejected a proposed two-cent hike for First-Class postage in October 2010, many businesses breathed a sigh of relief. The cost to mail notices would not be going up by nearly 5%.



But business will almost certainly be impacted by another postage increase that has gone relatively unnoticed. While the rate for single-piece, one-ounce First-Class letters will remain the same, on April 17 the rate for each additional ounce increased 1.7% from 17 to 20 cents. For businesses that mail high volumes of customer notifications – everything from marketing and billing information to legal notices – mail weighing more than one ounce can make up a sizeable – and now costly – portion of the mailstream.



Bringing efficiency to traditional mail

Businesses produce thousands of documents each day, many of which are still being mailed. This can add up to a huge expense, especially as postage rates increase.



The USPS sets specific postage rates and there is a wide range of rates available, from first-class to third-class. The postal service encourages businesses to take advantage of discounts available to mailings that meet minimum volume numbers, are barcoded to eliminate manual sorting and are a standard size to ensure a hassle-free trip through the processing center.



By automating this process and verifying addresses for deliverability through the USPS CASS database (Coding Accuracy Support System), businesses can reduce postage by nearly 25%. Manifesting provides additional savings by eliminating the need to purchase and maintain a meter and supplies as well as employee time operating the equipment. Manifesting is one of the best methods to optimize traditional print-to-mail channels.



Embracing electronic communication channels

Lifestyles are changing every day, and they’re being shaped by new technologies. Consumers are quickly embracing electronic communication channels, such as email, and businesses must keep up with the changing times.



Consider a new concept – the “Inevitable Mailroom” – a method that leverages online communication as well as traditional channels to maximize operational efficiencies as well as improve customer satisfaction. It’s “inevitable” because as the transmission of data continues to evolve into electronic format, growth in business-to-consumer digital communications – whether read on a computer or handheld device – is inevitable.



The Inevitable Mailroom concept facilitates document production and delivery by providing businesses with all available delivery channels from print-to-mail to e-Delivery. It optimizes this process by combining automation with electronic distribution channels. As communication evolves, businesses must disseminate information in different ways based on customer preference to ensure customer satisfaction and loyalty. Ignoring one channel over the other will result in either falling behind the rise of electronic communications or paying too much for the remaining volume of printed mail.



With the Inevitable Mailroom concept, e-Delivery is possible, enabling the user to send customer documents through lower cost channels such as online and mobile. Not only is this more cost effective, it can also build customer loyalty by disseminating information in different ways based on customer preference.



Many businesses may view the mailroom as a “cost center” and mistakenly exempt it from efficiency reviews; however, the Inevitable Mailroom concept plays an important role in optimizing efficiencies. Case studies have shown that by leveraging online communication and traditional channels to maximize operational efficiencies, mailrooms are at least 50% more efficient than a traditional mailroom. Some companies are realizing cost savings of as much as $100,000 per year, because less money is spent on documents and more resources can be focused on income streams.



One measure of efficiency is the number of employees needed to run operational support. A benefit of embracing automation in the mailroom is that fewer staff are needed to manually print, stuff, sort and mail materials, such as marketing collateral. This also presents substantial, hard dollar savings in postage, paper, labor, equipment and supplies.



Critical to sustaining competitiveness, businesses must continuously seek to improve efficiencies and save costs. Failure to do so could result in loss of business.



As postage rates increase, will your business be spending more money on mailings? Your mailroom should be a model of efficiency and functionality, and leveraging technology as well as embracing electronic communication channels can significantly reduce costs.



Harry Herget is co-founder and director of marketing for Jonesboro, Ark.-based SynTel, LLC (syntelllc.com).