Saving on Postal Communications White Paper


Published on

This white paper from highlights how schools and universities can take advantage of developments in postal products and services to cut costs, improve productivity and manage mail processes more effectively.

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Saving on Postal Communications White Paper

  1. 1. Savings inPostal CommunicationsA White Paper from NeopostHow schools and universities can take advantage of developmentsin postal products and services to: Cut Costs Improve Productivity Communicate more effectively Manage mail process©2012 Neopost Page 1
  2. 2. Savings in Postal Communications | White PaperIntroductionEvery year public sector organisations spend more than £650million on transactional and ad hoc mailings1. Despite growinguse of electronic messaging, Government departments, councils,hospitals, further education and schools depend on effective postalcommunications to raise revenue, deliver efficient public services andinteract with the public. In higher education it is increasingly importantto keep in contact with alumni.Trusted, flexible and reliable, printed mail is far and away the mostinclusive medium and the most effective way to reach all members For importantof the community. But it is increasingly important to utlise all media messages,channels. people stillEmail and SMS messaging have roles to play in simplifying certaintasks, such as reminders about doctors appointments. But for value theimportant messages, people still value the security of a physical letter security ofthat can be kept in a filing cabinet or fixed to a notice board. a physicalValue for money letterRoyal Mail research2 shows that people prefer electroniccommunications to be offered as an option alongside hard copy mailrather than as a substitute for it. Its analysis of bank customers foundthat 73% would feel inconveniencedif they no longer received paperstatements.In the same study, 70% ofrespondents said they were morelikely to notice advertising onpaper documents, demonstratingthe opportunities public sectororganisations have to makemore productive use of bills andstatements, as well as maintainingregular communications.As organisations place moreweight on value for money andeffectiveness, printed mail will remain an important component of anintegrated communications strategy, alongside digital media.1. Source: The Government Procurement Service (GPS),2. Royal Mail 2010, comprising research by Brahm, GFK FRS and Quadrangle.Page 2 ©2012 Neopost
  3. 3. Savings in Postal Communications | White Paper Investment in communications The importance of postal communications to the public sector is reflected in its annual expenditure on correspondence, bulk mailings, Postage Paid and other postal services. According to the Government Procurement Service (GPS), the public sector spends in excess of £650 million per annum on physical post. CCG (£257m) Local Authorities (£201m) Health (£79m) Others Education (£30m) (£83m) GPS states that smarter procurement could cut these costs bySmarter between 9% and 30%.procurementcan cut costs Improving Your Return on Investmentby 9-30% Savings are not just the product of better buying practices. Liberalisation of the postal market and the development of sophisticated hardware and software solutions, including digital mailrooms and integrated communication systems that unify electronic and physical mail, deliver efficiencies in other areas including: • postal costs; • employee productivity; • communications effectiveness; and • process management. Organisations that assess, monitor and manage mail volumes and workflows can take advantage of recent developments to eliminate waste and unnecessary expenditure. This is true of primary schools, colleges and universities, as well as large government departments and local authorities.©2012 Neopost Page 3
  4. 4. Savings in Postal Communications | White PaperRoyal Mail PricingLiberalisation of the postal market since 2004 has been the catalystfor smarter procurement by: a) opening up the industry to alternativeproviders; and b) giving Royal Mail more freedom to change how mailis priced.The latter has had two significant consequences: • he launch of Pricing in Proportion (PiP) in 2006, which introduced t the concept of differential pricing based on an items size; and • reater divergence between the prices of stamps and metered g (franked) mail, with further discounts if mail is presented in a way that streamlines handling in mail processing centres. This requires accurate address details, correct formatting and pre-sortation.These changes mean that it now pays even those with very smallmail volumes to consider how they prepare and pay for postalcommunications. Franking is anTake franking for example. Metered mail users currently save at least16p on every 1st class letter and 19p on every 2nd class letter sent, economicalmaking franking an economical option for a housing association or option fordental surgery sending as few as 5 letters a day. organisationsCouncil offices, hospitals and Government departments with greatermailing volumes can cut costs further by taking advantage of bulk sending asdiscounts offered by Royal Mail and other postal providers fortransactional mail prepared and addressed in a way that meets sorting few asrequirements, and for bulk mailings of 500 items or more. As a result, 5 itemsorganisations that send between 500 and 25,000 letters per mailing cansave an additional 16% to 23.5% on the cost of franked mail. a dayNew solutions and services offer further scope to economise. Examplesinclude: • lternative mail providers, such as UK Mail and TNT Post, that a typically offer savings in the region of 20%; • ybrid mail solutions that route letters from the users desktop h PC to an outsourced processing facility for printing, insertion and despatch for less than the cost of a second class stamp; and • oftware solutions that enable customers to opt out of hard copy s mailings in favour of electronic communications.In order to make the most of thesepossibilities, managers should implementa comprehensive review of mailingprocesses involving: an audit of mailusage; quick wins for instant savings; thedevelopment of a short-to-medium termstrategy; and the identification of long-term structural changes.Page 4 ©2012 Neopost
  5. 5. Savings in Postal Communications | White Paper How to plan your mail strategy Phase 1 Identify Your Mail Usage The first step is to establish how your organisation uses mail services and how this relates to specific service requirements. In looking to establish this link, it is important to address a number of key questions: Auditing • Where are your main points of despatch? • How many items of mail are you sending? • What postal products and services are you using? • What is the level of undelivered mail? • Is postal activity centralised or localised? • re there any statutory or policy requirements you are obliged to meet? A • What is your incoming mail volume? • ow many employees are involved in processing incoming and H outgoing post? Strategy • Do you have an integrated communications strategy? • What are you trying to achieve with your postal activity? • hat is the key objective for postal communications – speed or W predictability? • Do you have the buy-in of senior management to effect change? • Can incoming post be captured and distributed digitally? • Is security a priority? Phase 2 Introduce Quick Wins Implementing quick wins that can enhance efficiency or deliver cost savings is a good way to achieve buy-in from senior management. Here are examples of simple steps that deliver impressive results:Switch to ACTION SAVINGsecond class Reduce First Class Mail output 30%post and (switch to 2nd class, with 85% delivered next day)save 30% Improve presentation of mail items 12.8% (ensure correct address details and format) Take advantage of Pricing in Proportion 37.5% (only use DL or C5 envelopes) Pre-sort mail (where possible) 4.8% - 16.8% Reduce or stop the use of Special Delivery Services Reduce or eliminate the use of PO Boxes Introduce competition to your mail service providers©2012 Neopost Page 5
  6. 6. Savings in Postal Communications | White PaperPhase 3Short To Medium TermIn the short-to-medium term you will need to address strategicconsiderations that will impact how you communicate internally and withthe outside world. Ensure address • evelop an integrated communications strategy: Are you using the D correct media for your target audiences? databases • dentify the most economical means of communicating internally and I are accurate with customers or other stakeholders. Options include email, SMS messaging, telephone or direct marketing. to eliminate • Switch to web-based services, where legally permissible. wasted mailings • xamine the effectiveness of bulk mailings. E • utomate manual tasks such as opening mail, collating content or A filling envelopes. • Review contract management processes: be proactive, not reactive. • raw on the knowledge and expertise of your suppliers to find out D about solutions. • ationalise mail despatch and delivery points and create a R centralised operation. • entralise management and budgetary control for postal C services. • mprove forecasting so that you can take advantage of more I cost-efficient postal products with longer delivery times. • ggregate postal volumes across departments in order to A maximise postal discounts. • xplore the options and possibilities offered by hybrid mail E solutions. • urchasing or leasing mail equipment through compliant P framework agreements gives access to best value terms and reduced administration.Phase 4Structural ChangeIn the longer term, you will need to address structural considerationsincluding the role of postal communications within your organisation andyour obligations in respect of them. Where statutory, policy or legislativerequirements are in place, consider whether they can be challenged or re-written to take account of the competitive landscape and the introductionof new solutions.Consider, too, whether you can achieve greater efficiency by consolidatingmail handling across different departments, for example by collatingcorrespondence from different departments to the same addresseeor combining outgoing mail to maximise the benefits of discountingprogrammes offered by postal service providers. Are there any practical,legal or organisational obstacles to prevent you from doing this?Page 6 ©2012 Neopost
  7. 7. Savings in Postal Communications | White Paper Conclusion The need for educational institutions to economise has never been greater. In the 2010 Spending Review, Chancellor George Osborne announced cuts of £81 billion over the next four years, including cuts to departmental budgets of 19% and a 7.1% reduction in grants to local councils. As public sector managers attempt to maintain service levels with much reduced budgets they are having to scrutinise every aspect of their operations, including the mailroom, where greater competition, new mailing solutions and the on-going transition to digital processes offer new opportunities to streamline processes. By analysing short, medium and long-term mailing needs and changing mailroom practices to eliminate waste and maximise the opportunities for savings, public sector organisations of all sizes can cut the cost of postal communications and improve efficiency. What Next? To help the further and higher education sectors to identify where efficiencies can be made, Neopost is offering customers free audits of their postal communications processes. Please contact or call us on 01708 714576. About Neopost Neopost is the UK’s and Europe’s number one supplier of mailing solutions. Our products and services are sold in more than 90 countries and in 2011 we recorded sales of €1 billion. With expertise in traditional and digital communications, Neopost supplies the most technologically advanced solutions for franking, folding/inserting, addressing, logistics management and traceability, plus a full range of services, including consultancy, maintenance and financing solutions. We are the only manufacturer from the postal solutions industry to have served local authority purchasing consortia, central government and the wider public sector on successive framework agreements for fifteen consecutive years. Neopost is an approved supplier to Pro5, a partnership of the five largest local authority professional buying organisations in the UK (CBC, ESPO, NEPO, WMS, YPO) with a joint spending power of £2 billion per annum. To find out more, please visit©2012 Neopost Page 7
  8. 8. Savings in Postal Communications | White PaperNeopost HouseSouth StreetRomfordEssexRM1 2ARTel: +44 (0) 1708 714576Fax: +44 (0) 1708 8 ©2012 Neopost