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The Largest Mail Savings Opportunity - Outsourced Print and Mail Services

Postal Advocate Inc.
Postal Advocate Inc.
Postal Advocate Inc.President at Postal Advocate Inc.

Postal Advocate manages the mailing and shipping spends for some of the largest organizations in North America. 99% of medium to large organizations have limited to no visibility to their mail spends across the enterprise. This leads to overspending, lack of control, and lost funds. The largest category of this overspending is around mail that is outsourced to third parties. This webinar focused on ways to reduce your costs with outsourced print and mail services and how best to optimize this category. Items We Covered: 1. Gaining Visibility – The How To’s and Keys to Success 2. Optimize the Way You’re Sending Your Mail 3. Optimize Your Mail Service Providers

The Largest Mail Savings Opportunity - Outsourced Print and Mail Services

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The Largest Mail Savings Opportunity -
Outsourced Print and Mail Services
Background and Experience
Speaker: Adam Lewenberg
• President of Postal Advocate Inc.
– The only mail audit and recovery firm in the US and Canada
– Manage a portfolio of 160,000 pieces of mailing equipment for the largest
US companies.
– Speak and teach nationally on mail savings and industry trends.
• Former Industry Co Chair- Boston Postal Customer Council and Mail Systems
Management Association. 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’ largest accounts.
March 17, 2021 2
What We’ll Cover:
1. Gaining Visibility – The How To’s and Keys to Success
2. Optimize the Way You’re Sending Your Mail
3. Optimize Your Mail Service Providers
March 17, 2021 3
Overview
• In the US, most of the production mail is processed
through an outsourced mailer who has the staff,
equipment and expertise. This outsourcing happened
for the following reasons:
– USPS® rules got more difficult for automation discounts.
– Less mail expertise internally
– Improved levels of automation externally
Key Issues:
• Least understood category
• Lowest level of visibility
• Highest area of opportunity for overspending
March 17, 2021 4
Key Challenges with Outsourced Print and Mail Services
1) Lack of visibility
2) Variability in the rates paid for service fees and postage
3) Inconsistent level of detail provided on invoices
4) Lack of knowledge internally to leverage with suppliers
March 17, 2021 5
Lack of Visibility
The biggest issue is this category can be from
fragmented spends across multiple departments.
• Statement and transaction print documents –
Accounts Receivable
• Advertising based projects - Marketing
• Customer service information announcements –
Customer Service/Operations
• Internal staff mailings - Human Resources
Increased difficulty with large organizations with
multiple locations, business units, divisions and
departments.
March 17, 2021 6
Ad

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The Largest Mail Savings Opportunity - Outsourced Print and Mail Services

  • 1. The Largest Mail Savings Opportunity - Outsourced Print and Mail Services
  • 2. Background and Experience Speaker: Adam Lewenberg • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of 160,000 pieces of mailing equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Former Industry Co Chair- Boston Postal Customer Council and Mail Systems Management Association. 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’ largest accounts. March 17, 2021 2
  • 3. What We’ll Cover: 1. Gaining Visibility – The How To’s and Keys to Success 2. Optimize the Way You’re Sending Your Mail 3. Optimize Your Mail Service Providers March 17, 2021 3
  • 4. Overview • In the US, most of the production mail is processed through an outsourced mailer who has the staff, equipment and expertise. This outsourcing happened for the following reasons: – USPS® rules got more difficult for automation discounts. – Less mail expertise internally – Improved levels of automation externally Key Issues: • Least understood category • Lowest level of visibility • Highest area of opportunity for overspending March 17, 2021 4
  • 5. Key Challenges with Outsourced Print and Mail Services 1) Lack of visibility 2) Variability in the rates paid for service fees and postage 3) Inconsistent level of detail provided on invoices 4) Lack of knowledge internally to leverage with suppliers March 17, 2021 5
  • 6. Lack of Visibility The biggest issue is this category can be from fragmented spends across multiple departments. • Statement and transaction print documents – Accounts Receivable • Advertising based projects - Marketing • Customer service information announcements – Customer Service/Operations • Internal staff mailings - Human Resources Increased difficulty with large organizations with multiple locations, business units, divisions and departments. March 17, 2021 6
  • 7. Postal Advocate – Process to Gain Visibility • Start with Accounts Payable – Most outside mailings will have the postage funded by USPS permits that are paid directly vs. paying the mail service for the postage. Do a search of USPS spends and look for larger amounts that could be for outside mailing projects. • Reach out to the largest departments to see what service providers are being used. For instance: Accounts Receivable, Marketing, Customer Service and Human Resources • Get copies of invoices to see the detail on what is being charged. • Reach out to the vendors to see if they have web portals that can provide more detail. • Go to procurement to see if there are contracts in place with these vendors with defined rates. March 17, 2021 7
  • 8. Invoice Detail Issue • Every vendor provides different levels of detail on their invoices. Some charge at the job level while others break down each fee. • We recommend that you require vendors to provide the detail by fee so that you can understand what you are paying to compare the rates • If it is not on the invoice, request the detail on web portals or in emailed backup detail reports. March 17, 2021 8 By Job By Fee
  • 9. Service Fee Variability • You will find huge variations in what is charged from one service provider to another. These are the factors that have the greatest impact: – Was the job put out to bid or was in an add on project to an existing provider? – Does the vendor have a master service agreement for continual work at specific rates? – What is the quantity and frequency of the mailing? – What are the data processing charges? – What type of stock is used for paper and envelopes? – How is it printed – Type of printing technology and color or black and white? – How was the piece prepared and could it all be automated or was their hand work or high levels of personalization that was required? – How was it mailed and what level of postal automation was used? – What third party services were used for presorting, mail forwarding or shipping? – What was needed from the data besides mailing: • Emailing, texting or faxing • Data storage and web presentment • Because of the difficulties in comparing jobs, most organizations have little control or knowledge of best rates. March 17, 2021 9
  • 10. Mailing Categories Mailing Categories Description Cost High to Low 1-5 (5 being the highest) Material Paper, envelopes, Pre-printed stock. 3 Data Processing The cost to receive data files and turn it into its final version. 2 Mail Automation Processing the mail list through postal software to meet the USPS® requirements. 2 Printing Putting images onto paper 4 Mail Preparation Folding, Inserting, tabbing, inkjetting addresses, hand processing into final form. 4 Postage USPS costs to mail the item. This also includes Presort services. 5 Email The cost to divert the document to be emailed vs. printed. 2 Transportation Moving mail to the USPS or closer to its final destination to reduce postage costs. 1 Data Storage Image creation, storage and retrieval typically for backup or to have e- presentment. 3 Miscellaneous Other charges based on the specifics of your project. 1 March 17, 2021 10 We have developed a process that can simplify this by the following: • Gain access to the fee level detail for all invoices. • Log each line item to one of the categories above along with subcategories based on the types of services used. • Maintain the data over periods of time to be able to compare vendors and services. • Benchmark rates and use the data for further negotiations and vendor selections.
  • 11. Key Areas of Savings 1. Postage – Largest Area 2. Printing 3. Image Creation/Storage and Presentment March 17, 2021 11
  • 12. Postage – Largest Expense Area March 17, 2021 12 • First Class® Mail - Personalized in correspondence – Invoice, check, confirmation statement – 1 - 5 day delivery • Marketing Mail – Everyone getting the same message outside of basic personalization – Advertising, newsletter, giving request – 4 – 12 day delivery. • Need to push your service providers for the highest levels of automation. Mail Piece Examples First-Class Mail® Retail Single Piece First-Class Mail® Metered Single Piece Typical Presort Service - First- Class Mail® First-Class Mail® - Automation Marketing Mail® - Automation Marketing Mail® Non Profit- Automation 1 Ounce #10 Envelope $0.55 $0.51 $.428-.46 $.398-.45 $.259-.304 $.138-.183 3 Ounce Newsletter (6x9) $0.95 $0.91 $.428-.46 $.398-.45 $.259-.304 $.138-.183 8 Ounce Flat (9x12) $2.40 $2.40 $2.17-2.27 $1.86-2.17 $.70-.98 $.47-.75 Postcard $0.36 $0.36 $0.293 $.269-.285 n/a n/a Single Piece Rates Automation Mail with Barcodes
  • 13. Nuts and Bolts of Postal Discounting Methods for automation • Third Party Presort Service • Inhouse Software – One job at a time • Inhouse Software – Commingled jobs – Best discounts – typically only the largest shops provide. • Marketing Mail third party forwarding service • Marketing Mail internal transportation department forwarding directly March 17, 2021 13 From USPS Notice 123 Effective 1/24/21 First Class® Mail Marketing Mail™
  • 14. Printing • Second biggest cost area • Technology used can have a big impact on cost - Cut sheet, roll feed, laser, ink jet, color or monochrome. • What level of print suppression is used to move documents to email or web presentment? • Can jobs be presented together vs as independent jobs? • Are discounts offered for duplexing? • New virtual printers can allow you to send jobs from user’s desktops to a continuous workflow. Allows for lower volume print. March 17, 2021 14
  • 15. Data Management Huge costs can be in the way your data is managed. This could be in the following areas: – Accepting data files. – Formatting data to the vendors workflow. – Formatting the documents with your customer logic. – Mail Automation processing to comply with USPS requirements. – Email, fax or texting of your documents. – Image creation and storage of your files. – Web presentment of the stored images on custom portals. Client Example: – Sending invoices and paying $.004 to create backup images of each printed page. – Paying $.004 per image per month for every stored image. Stored images for 24 months. They have been using this service for 5 years and have 3,600,000 images stored. – Sending 75,000 invoices per month which was 150,000 images. • Monthly Image Creation = $600 • Monthly Image Storage = $14,400 • Total Annual Cost $180,000 or $.20 per invoice mailed! • With proper bidding this fee was cut in half and the storage model was changed to 18 months. Annual savings = $133,200 March 17, 2021 15
  • 16. Vendor Strategies We recommend running an RFP (Request for Proposal) to find the best rates and service levels for your mailings. • Build a defined template where it is easy to compare rates on the main mail expenses. • Include vendors that meet the following criteria: – Can support your customers geographic areas at the lowest costs: • If all mail is local – find a local or regional providers • If mail is nationwide, look for providers that are in the middle of the country or at desirable postal hubs that can reach the majority of the country in 2-3 day delivery. – Are close to a major presort center. – Are in low cost of living areas who can pass on the savings in rates. – Have the highest level of technology to support your needs. – Specialize in your main classes of mail or industry vertical – Example: Bank Statements – Have the value-added services you need. • Compare the responders and request references. • Review account management processes for customer service and issue resolution. • Look for discounts by consolidating higher volumes of mail into fewer suppliers. March 17, 2021 16 Year First Class® Mail Presort % Change Marketing Mail % Change 2020 36,246,494 -2.4% 64,180,125 -17.9% 2019 37,130,541 -1.9% 75,690,047 -2.1% 2018 37,833,487 -2.5% 77,305,661 -1.4% 2017 38,795,454 -3.0% 78,369,843 -3.3% 2016 39,943,145 -0.6% 80,929,933 1.0% 2015 40,174,244 0.0% 80,090,273 -0.4% 2014 40,193,317 -2.4% 80,374,260 -0.7% 2013 41,144,184 -3.4% 80,962,678 1.4% 2012 42,524,039 -4.6% 79,801,009 -6.1% 2011 44,494,498 -3.9% 84,691,971 2.6% 2010 46,225,386 -3.7% 82,524,693 -0.2% 2009 47,933,717 -8.3% 82,706,211 -19.8% 2008 51,935,871 3.8% 99,084,155 -4.5% 2007 49,978,441 0.2% 103,516,112 1.0% 2006 49,862,002 102,459,559 Data in Thousands From USPS REVENUE, PIECES, AND WEIGHT BY CLASSES OF MAIL AND SPECIAL SERVICES Reporting Mail declines leads to more competition
  • 17. Marketing Agencies and Consolidators There is a trend to use marketing agencies or consolidators for your Marketing/Promotional mail. They manage the creative and distribute the printing and mailing to service providers that they have vetted. • Potential issues: – Are you getting the best rates? – Are you getting any economies of scale or are they splitting the work among multiple providers? – Do you have any control over the mailings? – Do you have any visibility to the fees or is it aggregated on summary bills? – Are you assured that you are getting the best services available? • Solution: Use the Marketing Agencies for the creative; but manage the output through mail and print services that are controlled directly. – By combining mailings under one agreement, you can be assured that you are mailing at the lowest rates. – You can customize the service to what is needed from a mail, print and retention strategy. – You can get higher levels of vendor support due to the size and scope of your relationship. – Larger mailers have higher levels of automation that can provide lower postage rates, distributed print across facilities and can move mail closer to its final destination without using third parties to maintain control. March 17, 2021 17
  • 18. Manage the Future Relationship • Once the new service providers and rates are in place it is important to set up a process for managing the relationship including: – Vendor portal access to all mailings – Visibility to all invoices – Audit process to look for the following: • Billing errors where refunds are required. • Service failures where contracted refunds are available. • Expense areas that are above documented thresholds to work for reductions. • Budgeting around postage increases. – Quarterly review process that defines the changes and new strategies for the future. – Ongoing meetings to move enhancements forward. March 17, 2021 18
  • 19. Summary • Gain visibility to outsourced mailings (Most important step) • Audit the invoices to benchmark the service levels and fees. • Look for savings across all areas of spend. • Run an RFP to develop a master service agreement with fewer suppliers. • Set up continual future review to further optimize the category. • Record your results through your managed program – They will be larger than you expect! March 17, 2021 19
  • 20. Helping multi-location organizations streamline their mailing costs Over 150,000 pieces of equipment, managed by Postal Advocate Recovered over $20,000,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $63,000,000 IN CLIENT SAVINGS $1.9M 59% Average Client Savings Average Equipment Savings HOW WE DO IT • 220+ 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)
  • 22. 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