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How Large Organizations Can Save On Mailing Fleet Costs

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Presenting strategies you can use in your organization to dramatically reduce mailing equipment costs, eliminate fees, recover lost postage and create visibility across the enterprise.

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How Large Organizations Can Save On Mailing Fleet Costs

  1. 1. How Large Organizations Can Save on Mailing Fleet Costs
  2. 2. Adam Lewenberg - Background and Experience • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of 85,000 pieces of mailing equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Industry Co Chair- Boston Postal Customer Council/Mail Systems Management Association member. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 17 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nations top accounts. • Not affiliated with any mailing vendor - Unbiased advice. September 20, 2017 2
  3. 3. What We’re Covering 1. Challenges – The challenges organizations with large mailing fleets face 2. Visibility and Analysis – How gaining a thorough understanding of this complex category will save time, reduce costs and increase efficiency across your fleet 3. Equipment Savings Process – The process to reduce mailing equipment costs without compromising vendor quality or service 4. Eliminating Vendor Fees/Overcharges – Steps to finding mailing vendor fees and overcharges 5. Lost Postage Recovery – Tracking down lost postage for closed locations, mergers and dormant accounts 6. Developing an Equipment Purchasing Strategy 7. How We Can Help - Best-in-Class Tools – Complete visibility to spend using the most innovative tools, resources available along with on-going maintenance and support September 20, 2017 3
  4. 4. 4 Challenges of Managing Fleet Mailing Assets Areas for improvement Multiple postage accounts to fund and maintain Difficult to assess needs or requirements No centralized oversight No control of rogue spend Resources or Time to Execute No published pricing for comparison Poor Visibility Inconsistent prices for similar equipment Unclear invoices Connecting Devices to the Network
  5. 5. Challenges With Mailing Equipment Purchasing 1. Huge price variances for similar models at different locations across your fleet September 20, 2017 5 Example: Model Pricing Variance Model Quantity Low High Average High/Low Ratio Total Expense Total if all at Low Rate Model A 9 $348 $701 $459 2.0 $4,133 $3,132 Model B 36 $345 $1,573 $801 4.6 $28,839 $12,420 Model C 26 $427 $2,063 $1,296 4.8 $33,703 $11,102 Model D 13 $1,427 $2,760 $2,019 1.9 $26,250 $18,551 Model E 26 $1,524 $4,467 $2,666 2.9 $69,325 $39,624 Model F 5 $3,251 $6,276 $5,352 1.9 $26,764 $16,255 Model G 5 $7,848 $9,931 $8,931 1.3 $44,655 $39,240 Total 120 $233,669 $140,324 Potential Savings $93,345
  6. 6. September 20, 2017 6 2. Expired or non existent Master Service Agreement 3. Lack of visibility to postage spends and usage levels. Companies buying the wrong levels of equipment. In many cases spending more on equipment than postage/usage. Spend Ratios Postage Range # of Sites Equipment Spend Postage Spend Spend Ratio >$12,000 per year 2 $26,600 $63,500 0.42 $1200-12,000 per year 64 $189,054 $155,441 1.22 <$1,200 per year 76 $120,291 $41,890 2.87 Challenges With Mailing Equipment Purchasing Main Cause – Reliance on mailing vendor to work with the locations to define requirements combined with declining mail volumes.
  7. 7. September 20, 2017 7 Challenges With Mailing Equipment Purchasing 4. Vendor inventory reporting is infrequent, unavailable and confusing 5. Lease portfolios with varying end dates often going into evergreen statuses. Lease Renewal Dates Lease Expiration Year # of Sites Value 2013 or Before 19 $28,404 2014 9 $12,198 2015 34 $62,193 2016 26 $54,455 2017 19 $30,795 2018-20 22 $35,691 Total 129 $223,736 68% of your leases are coming up over the next year.
  8. 8. Equipment Savings Process September 20, 2017 8 Optimized Mailing Fleet Asset Management 1. Gain visibility to your equipment and spends. 2. Validate questionable charges. 3. Negotiate enterprise pricing and terms. 4. Work with locations on equipment changes. 5. Eliminate fees and overcharges 6. Maintain postage balances and claim lost funds. 7. Continual review to ensure savings. This process leads to 30-70% savings!
  9. 9. Analysis and Visibility • Get reports from your vendors that list: – Account Numbers (Install, Lease, Prepaid and Advance Postage) – Lease Information – Rate, Term, End of Lease, Items covered. – Meter rentals and maintenance agreements. – Model, serial number and description of every item. • Go to accounts payable and pull spend reports from the main mail vendors and USPS. • Enter your account numbers on the vendor websites. • Monitor your inventory, invoices and postage balances online (Recommended to do this monthly). • Find all active locations with equipment. • Set up a schedule for continual review. September 20, 2017 9
  10. 10. Eliminating Vendor Fees/Overcharges • Pay bills on time. • Look at each invoice and validate all chargeable items. • Cancel vendor equipment insurance. • Terminate chargeable loyalty programs. • Make sure postage refill and advance charges are included or monitored. September 20, 2017 10 Postage Refill Fees - Rentals $0-20 each Postage Advance Fees Included or up to 1% of the Advance Postage Advance Late Fees 0-15% of the Advance Postage Advance Finance Charges 15% or higher APR Overlimit Credit Charge Varies by Vendor Annual Fee Rewards Program Varies by Vendor Lease Late Fees Varies by Vendor and Lease Value Insurance - Leases Only Varies by Vendor and Lease Value - Automatic enrollment unless proof insurance is provided. Mailing System Fees We find companies paying tens of thousands in fees and overcharges that can be recovered or eliminated for the future. Postal Advocate Avoidable Fees and Overcharges Savings Stats 4266 Transactions - $5,473,438 Typical Vendor Overcharges Invoices notgiving national accountdiscounts. Meter, maintenanceand ratechangecharges when included on a lease. Bills for equipmentfromclosed sites. Resetand advancepostagefees thatshould beincluded. Loyalty points thatgo undredeemed or cashed in for personal use.
  11. 11. Lost Postage Recovery • We have found over $2,460,000 in lost postage sitting in dormant postage accounts. Plus over 27,000 transactions turned over to the states. This happens because: – Offices close, merge or just turn in their meters. – The money is expensed once sent in for postage. – The advance account is used when funds sit idle in the prepaid. • Steps to find money. – Find account numbers of your current and past meters. – Enter these account numbers online on the vendors website to see if any data is available. – Contact your meter vendor to validate funds available. – Check the unclaimed funds databases to see if funds were turned in. Postal Advocate can research these funds and help you get them returned. September 20, 2017 11
  12. 12. Developing an Equipment Purchasing Strategy • Use national spend to negotiate better rates. • Consider running a bid between the main mailing vendors. (Pitney Bowes, Neopost, FP, Stamps.com) • Negotiate Master Service Agreement and Terms. • Define the order process inside your organization. – Purchase vs. lease vs. rental? – How are the equipment needs defined? – Where are approvals done? – How can the policies be enforced? September 20, 2017 12 How Postal Advocate Can Help We can pull this spend together for the US and Canada. We have bid templates ready that we have used to negotiated for the largest mailing fleets. We can add and review terms to protect you for the future. We can guide you through your options. Postal Advocate will work with your locations to show options and help implement changes. Postal Advocate will manage this process to ensure rules are being followed.
  13. 13. How Postal Advocate Can Help • We can work with all vendor’s data and can build this visibility. • We maintain this data in our enterpriseAdvocate System and provide you access. • We update this data monthly. • We use this data to drive savings through your portfolio. September 20, 2017 13
  14. 14. Enterprise Advocate – Multi Location System - Dashboard September 20, 2017 14 The data above is for demonstrative purposes only. Data does not represent true spends and costs.
  15. 15. Enterprise Advocate – Multi Location System - Dashboard September 20, 2017 15 Highlights • Simple access to all mail spends. • Visibility to fees and savings. • All account numbers are stored in one place. • Simple to drill down to an individual location or invoice. The data above is for demonstrative purposes only. Data does not represent true spends and costs. Spend Ratio What are we spending on the equipment compared to the postage used.
  16. 16. Enterprise Advocate – Location View September 20, 2017 16
  17. 17. Validate Equipment Spends with Locations We typically find 5-15% of a mailing fleet is not needed and can be returned. • Bills often sent to accounts payable with limited review. • Locations not surveyed about the equipment at the site. • Little understanding of the equipment listed on bills and reports. • Vendors have little incentive to validate suspect equipment because of lost revenue. • Equipment may be sitting in storage with charges accruing. September 20, 2017 17 Criteria for Search: • Meters not filled for over 6 months. • Expired leases. • Maintenance and meter rentals. • Equipment over 5 years old. • Folders, inserters, openers, shipping and tracking systems.
  18. 18. Postal Advocate Validation Process September 20, 2017 18 1. Find suspect equipment and charges. 2. Contact the location to validate needs. (See below). 3. Implement changes and cancellations.
  19. 19. Renewal Process • Who works with the locations to define the needs and provide options? (Vendor, staff) • What review process is set up to make sure it is the right solution? • How do you protect against: – Evergreen clauses – Remaining balances – Unauthorized lease extensions – Unneeded equipment or wrongly sized models – Locations not getting national account discounts • Who follows up with each location to make sure new equipment is set up and the old equipment was removed? September 20, 2017 19
  20. 20. Postal Advocate Equipment Renewal Process September 20, 2017 20 Step 1: Customized Renewal Email Implement renewals, terminations and new equipment needs. Analyze current pricing and terms. Set Standardized equipment rates and updated MSA’s. Document all new equipment, savings and notes. Work with locations to define needs and show options. 1 2 3 4 5 Postal Advocate Equipment Savings Stats Savings Type # of Transactions Total Savings % of Savings Equip Savings: New 358 804,045$ Equip Savings: Renewal 4113 26,403,748$ Equip Savings: Terminate 2375 1,928,986$ Total 6846 29,136,779$ 60%
  21. 21. Customized Renewal Email September 20, 2017 21 Detailed Location Information Company Defined Purchasing Process. Compare Current Equipment and Costs to new options. Detailed description on all equipment. Web, PDF and Video links for more information.
  22. 22. Step 2: Equipment Change Request Form September 20, 2017 22
  23. 23. Step 3: Equipment Ordered Validation with Instructions September 20, 2017 23
  24. 24. Step 4: Client Validates Completed Request September 20, 2017 24
  25. 25. Helping multi-location organizations streamline their mailing costs Over 85,000 pieces of equipment, managed by Postal Advocate Recovered over $7,994,875 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $32,000,000 IN CLIENT SAVINGS $893K 60% Average Client Savings Average Equipment Savings HOW WE DO IT • 240+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit www.postaladvocate.com or call (888)977-MAIL(6245)
  26. 26. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit www.postaladvocate.com or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT
  27. 27. Free No Obligation Mailing Fleet Analysis • Completed in 2-3 weeks • Outlines, spend and specific savings opportunities • Minimal client involvement September 20, 2017 28 Savings Summary Locations Meter Rentals Maintenance Agreements On Call Maintenance Lease Total Postage Spend Ratio 0.00 Item Current 2015 2016 2017 Savings Combined Savings Equipment Costs Avoidable Fees (Late Fees, Finance Charges, Equip Insurance, Loyalty Plans) Contract Violations (Supply, maintenance, meter discounts, overcharges) Lost Postage Funds (Meter Accounts) Lost USPS Permit Funds Total $0 $0 $0 $0 $0 $0
  28. 28. Fleet Cost Savings Process September 20, 2017 29 Summary Optimized Mailing Fleet Asset Management 1. Gain visibility to your equipment and spends. 2. Validate questionable charges. 3. Negotiate enterprise pricing and terms. 4. Work with locations on equipment changes. 5. Eliminate fees and overcharges 6. Maintain postage balances and claim lost funds. 7. Continual review to ensure savings. This process leads to 30-70% savings!
  29. 29. Contact info: (20pt) September 20, 2017 30 Questions? Contact: Adam Lewenberg - President 888-977-MAIL X 501 adam.lewenberg@postaladvocate.com

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