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The ROI of the Intelligent Mail® Barcode (IMB): Look in the Mirror, Not at the USPS
By: Paul Abdool
In November 2009, new USPS discounts will be applied if you implement the Intelligent Mail® barcode (IMB) full-service option. If you haven’t heard the announcement, don’t worry, you didn’t miss much. Essentially, your organization could experience an additional $0.001 (Standard Mail) to $0.003 (First-Class Mail) of savings per mail piece over today’s discounts, if you’re already maximizing your potential discounts.
That being said, it is not time to be critical of the USPS’ discounting policy. It is time to look closely at your organization or your customer’s organization to discover the true Return on Investment (ROI) of the IMB. The benefits of the IMB far outweigh the fractions of a penny per mail piece that are visible above the surface. The real savings, efficiencies and ROI can be gained by exploiting the IMB to the fullest.
First of all, it is critical to recognize that documents are part of an overall document lifecycle that does not end once the document is inducted into the mailstream. Secondly, one must also realize that mail pieces are the culmination of input from various sources within the document ecosystem, which includes various departments within a company and are subject to many external forces as well.
With those fundamentals established let us think about business critical documents like invoices and statements as well as their close cousins, dunning letters and cancellation notices. These documents are subject to external forces from government agencies such as the Securities and Exchange Commission (SEC) or the Board of Governors of the Federal Reserve System, as well as the USPS.
There are also many stakeholders within an organization that are concerned about the whereabouts of the documents and how that affects their business. The Finance department and the CFO are concerned that the document contains all of the information their customers need to stimulate an action such as paying their bill while keeping in mind that the accounts receivable department will have to deal with the inbound portion of the document when it is returned. The Marketing team wants to ensure that they are maximizing their print budgets. To do so, they need to track and measure how well they are doing.
Another department that is concerned about the document’s ‘well-being’ is Customer Service. The customer service representatives (CSRs) are responsible for fielding the inbound inquiries about documents. Good document infrastructures with integrations to customer-relationship management systems have given CSRs the ability to ‘see’ what the customer is seeing but their managers have never really known exactly when the customer would see the documents or if the documents were ever really received in the first place.
In addition, the Security and Audit department, the Legal department, the IT department and a few other significant players like the CEO also want assurance that the documents are where they should be and if they are not, they would like to have an answer as to why. And who has to answer this question today? The Mail Center Manager only has costly ways to confirm the document is in the mail or can estimate the delivery status by using the estimated delivery standards of the USPS and if they are really savvy a few control documents seeded in each of their mailings.
For these reasons the IMB’s ROI needs to be measured differently to really express its value to the entire organization. Companies need to look beyond the postal rate and review their own enterprise’s business requirements and processes to unlock the true ROI that the IMB can provide.
Now let’s start where we should always start—with the client. From the client’s perspective, they simply expect an accurate, clear document that is received on time. They also want an easy way to contact you if necessary and if they do contact you they want someone on the other end to know them and their current status. With the IMB in place on their documents, tracking of the outgoing document and the incoming document is possible. How does this ‘simple little barcode’ translate into ROI?
The following are some line items that could show up in the ROI model:
| Department |
Savings or Revenue Item |
Annual Savings |
| Legal / Security and Compliance |
Certificates of Mailing reduction |
$54,000 |
| Marketing |
Return Mail (UAA) reductions |
$8,640 |
| Business Units |
Document Production & Postage (UAA) reductions |
$141,360 |
| Customer Service - Call Center |
Inbound call labor reduction |
$45,000 |
| Customer Service - Call Center |
Outbound collections call reduction |
$64,500 |
| Total |
|
$313,500 |
Legal / Security and Compliance - $54,000
o A mailer producing 2,000 of each of the following documents in an insurance policy cancellation cycle - Renewal, Late and Cancellation notices - per month requiring proof of mailing or Confirm® services, could realize an additional annual savings of $54,000 through improved address accuracy and by taking advantage of the free OneCode ACS®
- $54,000 = 2,000 envelopes returned x $0.75 per Certificate of Mailing (from the USPS) x 12 months x 3 document types (Renewal, Late and Cancellation notices)
o In cases where the proof of delivery of a document is critical, companies like to have the confirmation from the USPS on record showing the date that the document was delivered to the customer and the address it was delivered to. The IMB will reduce the delivery confirmation costs with the free OneCode ACS® (full-service provides unlimited for First-Class, 30 days for Standard).
o Free Start-the-Clock – is the date the mail piece was determined to have entered the USPS network, also called Day Zero. Mailers that comply with the Full-service IMB will receive information online and an automated data exchange.
o Another by-product is overall mail piece volume reduction.
Marketing – $8,640
o A mailer producing 20,000 marketing pieces per month, could realize an additional annual savings of $8,640 through improved address accuracy
- $8,640 = 2,400 envelopes returned x 30% addresses updated before mailing x $1.001 to produce each piece (document production and postage) x 12 months
o Undeliverable as Addressed (UAA) mail is very costly. Mailing economics discussions often focus on postage and the failure to receive automation discounts when addresses are inaccurate, incomplete, or not current. However, when an address is undeliverable, the entire mail piece becomes a sunk cost. Therefore, business mailers must consider the total cost of producing and mailing the piece. Approximately 44 million Americans (17% of the population) file changes of address with the USPS every year. In addition, 2.3 million U.S. businesses file changes of address annually2.
Business Units – $141,360
o A mailer producing 200,000 envelopes per month, could realize an additional annual savings of $141,360
- $141,360 = 200,000 envelopes x 5.89%3 returned as Undeliverable As Addressed (UAA) x $1.00 to produce each piece (document production and postage) x 12 months
o Once again, the free USPS OneCode ACS® service will allow mailers to achieve significant cost savings.
o Business units will also now be able to track mailings from production to the client’s mailbox, which will allow the department to manage an overall multi-faceted media approach to campaigns.
Customer Service (Call Center) - $109,500
o A mailer producing 200,000 marketing pieces per month, with an inbound call center cost of $300,000 per year could realize an additional annual savings of $45,000 through reduced labor costs from outbound document tracking
- $45,000 = $300,000 call center cost x 15% labor saving
o Knowing precisely when documents are delivered to customers means that call centers can be right-sized for the expected inbound call volume.
o A mailer than has an outbound collections call center volume of 1,000 calls per day could save an additional $64,500 per year using inbound document tracking
- $64,500 = 1,000 outbound calls day x $5.00 per call x 258 business days x 5% reduction in calls
o Calling customers about late payments is expensive and irritates customers. Once the IMB has been implemented to track return documents, CSRs can be more efficient. If a return document has already been mailed in by a customer, but not yet received and/or processed, an outgoing call can be avoided since your organization knows the “check is in the mail”. On the other side of the coin, when a problem customer says the “check is in the mail”, you will know whether this is true or not while on the phone call, resulting in more accurate first call resolutions.
There is a lot to consider and many technicalities associated with an IMB implementation. If everyone is ready, including the USPS, the IMB theoretically should save the USPS and companies that utilize the services of the USPS everyday millions of dollars annually. So think of this as the ‘Y2K of Mail’ that has an impact on your document ecosystem and your company’s bottom line. Get prepared now and don’t be the 1 in 4 companies who do nothing until it starts costing them money. Be proactive and make or save money now—the ROI is in the mirror. Reflect on that.
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Paul Abdool is the Practice Manager for the Production Print and Mail Practice Group within the Consulting Services division of IKON Office Solutions. Prior to joining IKON, he was with KUBRA, Pitney Bowes’ DMT Division and early in his 12 year document industry career, he sold envelopes. Paul earned his BBA from Wilfrid Laurier University in Canada. He is the Chairman of the Board of Xplor International and the President of Xplor Canada. Paul was recently appointed to EDSF’s Scholarship Committee. He has also earned his EDP Certification from Xplor International and his ECMS certification from AIIM.
1 Conservative cost to produce a document (composition, paper, printing, insertion, labor, fuel, postage). Some pundits have this number up to $2.75 per piece.
2 USPS Web sites: www.usps.com and http://ribbs.usps.gov
3 Source: 5.89% of mail volume is returned per mailing - Intelligent Mail and Address Quality - Delivery Statistics – Office of the Inspector General
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