This Ain t Your Grandma s Post Office Anymore A Primer on Discounted Mail

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1 Customized Postal Training Programs This Ain t Your Grandma s Post Office Anymore A Primer on Discounted Mail PowerPoint Presentation Note Pages Hosted by Guided by G. P. George Heinrich, PPhD CQMPS, PIG, CMQCS, OMG, CMDP June Proud to partner with the following organizations to provide specialized educational opportunities 2011 Postal 911 Inc.

2 Welcome to It Ain t Your Grandma s Post Office Anymore! Agenda Thoughts about marketing What s troubling the USPS? There s no excuse for not doing your homework From First Class to Blue Collar Yes, SizeDoesMatter! Is your mail DAA or DOA? What do those funny little lines do? Somebody actually want this mail back! The infamous Q and A session Nap time Some Thoughts About Marketing

3 Thoughts about Marketing Today s marketing efforts must be both personal and relevant Marketing has changed more in the past two years than in the previous 25 The recipient chooses what they want to hear When they want to hear it Interruptive marketing no longer works You must get the right message to the right person at the right time Multi channel marketing is becoming multi gration Thoughts about Marketing Part II Broadcast Media Radio and television Print Media Newspapers and magazines e mail Internet Marketing Social Media Twitter, Linked in, Facebook, etc., etc., etc. Direct Mail Which method is the most likely to be seen and touched? Thoughts about Marketing Part III Direct mail is not the only answer to successful marketing today It just may be the best for getting your message to the right person at the right time Target marketing Direct mail can be used d to di drive responses to other methods of communication PURLS, QR Codes, Microsoft tags If you are going to use the mail, you will need to understand how the USPS functions to get the most for your marketing dollar

4 Six day? Five day? Three day? So what s troubling the USPS? Meet Your Uncontrollable Business Partner The Behemoth known as the USPS Behemoth is defined as.. Something abnormally large and powerful In FY 2008 processed 202,700,000,000 pieces An average of 675 million pieces per day More individual pieces in one day than UPS and FedEx process in a three month period Volume in FY ,600,000,000 A decrease of 107 million pieces daily ( 16%) Revenues down by about $500,000,000 Paid out 5.5 billion to prefunded health care and 2.5 billion for adjusted workman s comp Net loss $8.5 billion

5 More Postal Facts The number of addresses in the U.S. increased by more than 700,000 in FY 2010 Now delivers mail to about 151 million addresses, six days a week Staffing reduced by over 40,000 Over 32,000 facilities More locations than Walmart, Target, Starbucks, Mc Donald s & Walgreens combined Cannot close offices without OK from Congress So what s troubling the USPS? How do they stop the bleeding? The USPS is considering reducing delivery of mail from six days to five days Savings of about $3 billion annually Would three day residential delivery work? Closing and consolidating operations Must stget Congressional blessing to do this Make postal services more convenient Kiosks in supermarkets and malls Ability to sell something other that stamps! I run an organization that generates over $70 billion in revenue per year and all I can sell is stamps Jack Potter Former Postmaster General This is also Your Uncontrollable Business Partner Tamiami Trl E, Ochopee FL (239) Mon Fri 10:00 12:00 1:00 4:30 Sat 10:15 11:

6 There is No Excuse for Not Doing Your Homeworkk Target Marketing Doing your due diligence when planning a marketing program is critical to its success Knowing who you want to receive your message will allow you to pick and choose from thousands of mailing lists to get the right names Start with the client file Determine the demographics of those names Research rental lists to find people will similar interests and needs Get references from the list company Target Marketing Design a piece that you think will seize the interest of the addressee Try to make it as personal as possible Too personal can double the postage costs! Begin with a small mailing Don t spend d your entire budget b d ton the first t mailing If possible run a test group and control group Track the results Continue to test, test, test Times and circumstances change. What worked today might not work tomorrow

7 Earning Postal Discounts Accurate Addressing Is the address deliverable? Does Charlie still live at 123 Main St? Adding Barcodes POSTNET or IMB Sorting the mail to get it as close to its final destination before the Postal Service must handle the individual pieces Transporting the mail closer to its destination Pieces compatible with automated equipment Following the Rules Whether mailed a retail or discounted rates, mail must be prepared following Postal regulations The DMM is the Bible 1862 Pages of rules and regulations On line at pe.usps.gov Subject to interpretation at mail acceptance Use the expertise of a professional direct mail service provider Swift Print Communications One Strange Regulation DMM Small Cold Blooded Animals Small, harmless, cold blooded animals (except snakes and turtles) that do not require food or water or attention during handling in the mail and that do not create sanitary problems or obnoxious odors ar able. (e.g., baby alligators and caimans not more than 20 inches long, bloodworms, earthworms, mealworms, salamanders, leeches, lizards, snails, and tadpoles)

8 The Professor s 7 P s Proper Prior Planning Prevents Production and d Postal Problems Mail In a Class By Itself From First Class to Blue Collar Classes of Mail All mailpieces fall into a specific class of mail based on content and service level Expedited Services First Class Mail Periodicals Standard Mail Package Services

9 Classes of Mail Expedited Services Express Mail USPS version of FedEx and UPS overnight delivery USPS was first! Delivered 365 days per year Including Sundays, Thanksgiving and Christmas for a fee Service Guarantee Automatically insured for $ Tracking via USPS web site Classes of Mail Expedited Services Priority Mail Generally delivered in two to three days No service guarantee Can be tracked if a special service is added First Class over 13 ounces becomes Priority Mail Receives some special ilhandling due to packaging Mailpiece must show Priority on address side Single piece rates only, no presort discount Flat rate envelope and boxes are available Same rate no matter how heavy or how far it mails Classes of Mail First Class Mail Required on specific types of mail Sealed against postal inspection Personal correspondence Bills and Account Statements Handwritten or typewritten material Business Reply Mail Usual delivery time two to five days Special rate for postcards

10 Classes of Mail Periodicals Special rate for magazines and newspapers that are published on a regular frequency Requires authorization from USPS to mail at these rates Very strict rules about advertising percentage Receives expedited processing, transportation and delivery Rate structure very complex Classes of Mail Standard Formerly known as Bulk Rate or the J word Usually used for advertising and mass communication Strict rules about preparation prior to acceptance by the USPS No service guarantee Heinrich s Law Classes of Mail Non Profit Standard Special sub class for authorized not for profit organizations Very strict rules about co op mailing, advertising and content The name and address of the authorized organization must appear on every mailpiece The organization must have USPS authorization to enter mail at each entry point

11 Classes of Mail Package Services For mailpieces weighing over 16 ounces Used frequently for merchandise Four sub classes Parcel Post Bound Printed Matter Media Mail Library Rate Presort rates available for large volumes Yes, Size does Matter Parcelsl Letters Flats How the Postal Service Processes Mail USPS process mail using three basic methods Manual Clerks do all the work Mechanical Clerks do some of the work Automated Clerks only feed and empty, the machine does all the other work How fast are these machines? Letters 36,000+ per hour 2 people Flats 17,000 per hour 3 people Parcels 6,000 per hour 4 to 6 people Compatibility with these machines impact both postage costs and delivery times

12 Lettersize Lettersize mail accounts for about 70% of all the mail processed These have the lowest postage rates Strict rules about size, address location and construction due to the speed of processing An really important regulation! The length of a lettersize piece is always the dimension parallel to the address Sometimes poor address placement can change the processing category These pieces are sometime called a Fletter Lettersize 6 1/8 Max 3 ½ Min 5 min 11 ½ Max Lettersize Template 3A

13 Fletter Example #1 Commercial STD Fletter Example #1 Commercial STD Current postage is between 11.4 and 23.2 more per piece Fletter Example #2 Non Profit

14 Fletter Example #2 Non Profit Current postage is between 7.3 and 19.7 more per piece Fletter Example #3 First Class Fletter Example First Class Current postage is between 4.5 and 34.3 more per piece

15 Postcards Postcards are still considered lettersize pieces Special rates and regulations for cards mailed at First Class rates only Minimum Size Maximum Size Height 3 1/2 Height 4 1/4 Length 5 Thickness.007 Length 6 Thickness.016 Stock must be light in color Need 4 from right edge to put barcode for automation rates Postcards Flats When a piece exceeds one or more of the maximum dimensions of a letter it becomes a flat Unless it exceeds the maximums for flats Must be rectangular in shape Uniformly thick Meet flexibility and rigidity standards Specific placement requirements for address Does not apply to First Class Mail

16 Flat Specifications 12 Max Minimum Thickness Maximum Thickness ¾ 6 1/8 Min 5 Min Automation Flats Only 6 min 11 1/2 min 15 Max Flat Addressing Standards For HORIZONTAL envelopes or polywrapped flats Address parallel to longest dimension Address must completely in left half or right half ABC Company 123 Main St Anytown US ABC Company 123 Main St Anytown US s s NAME ADDRESS CITY ST ZIP OR s s NAME ADDRESS CITY ST ZIP s s NAME ADDRESS CITY ST ZIP Flat Addressing Standards For UNWRAPPED flats with bound edge on RIGHT SIDE Address must be in top half of the flat When h address is parallel l to the short dimension it CANNOT read upside down s s NAME ADDRESS CITY ST ZIP s s NAME ADDRESS CITY ST ZIP Top Half s s NAME ADDRESS CITY ST ZIP s s NAME ADDRESS CITY ST ZIP Bound Edge s s NAME ADDRESS CITY ST ZIP Bottom Half

17 Parcels Mailpieces that do not qualify as letters or flats are considered Parcels Three different parcels categories based on their physical properties Machinable Irregular Outside No parcel can weigh more than 70 pounds The longest dimension is always the length Customized Market Mail Odd Shaped Mail sent Presort Standard rates Customized Market Mail Odd Shaped Mail sent Presort Standard rates

18 Customized Market Mail Odd Shaped Mail sent Presort Standard rates Must be delivered to destination Post Office 130 different offices in Denver service area 664 offices in Colorado and Wyoming Uses a special permit and markings Not usually cost t effective unless l being mailed locally Totally manual process through the USPS Quick Service Guide Section 705a Is your Mail DAA Deliverable as Addressed or DOA? Dead on Arrival Address Quality The Postal Service processes over 9.2 billion UAA pieces every year About 42 million people change their address each year That s about 85 changes per minute 24/7/365 Mailcan be considered undeliverablefor many different reasons Incomplete or inaccurate addresses Addressee moved and didn t notify the Postal Service about 20% of movers Forwarding order expired Address is vacant No mail receptacle

19 Undeliverable as Addressed Mail What happens to this mail is a very complex process based on the class of mail and endorsements printed on the piece First class Mail will be forwarded or returned free of charge Periodical Mail will be forwarded free of charge for sixty days Subscription periodicals must subscribe to Address Change Service which provides address updates electronically to publishers Standard Mail will be recycled unless instructions are provided on what to do with theundeliverable mail Move Update The Postal Service spends over 2 billion dollars a year to process UAA mail Postmaster General Potter has mandated a reduction in UAA mail by 2010 Addresses used on discounted mail must be updated within 95 days prior to mailing. NCOA link Address Change Service FastForward Ancillary Service Endorsements Alternate Methods First Class Only Move Update Compliance National Change of Address (NCOA) Database of address changes provided to the USPS by anyone who has moved About 40 million changes annually 20% of people who move will never tell the USPS Licenseescompare compare client data against NCOA database and identify moves linktm Date of move Type of move Family, Individual & Business Reason for non match Retention of old address?

20 Move Update Compliance Ancillary Service Endorsements Seems like a simple solution, but Strict guidelines to maintain compliance Different fees based on ASE used and class of outbound mail Does not comply l with ihmove Update requirement the first time used Changes must be Made within 95 days of next use Proof of updating retained for one year If not correct USPS can reject the mail Font size, clear space, location What Service Do You Want? Address Service Requested Change Service Requested Electronic Service Requested Forwarding Service Requested Does not meet Move Update Compliance Return Service Requested Temp Return Service Requested First Class mail only All the gory details in DMM How does the Postal Service Know? Mail entered through BMEU is sampled and verified on MERLIN The signature on the mailing statement certifies compliance During MERLIN process, addresses are checked against NCOA data to see if addressee has a move on file Mailings having less than 70% of the moves updated will be penalized Percentage increases to 75% in January

21 Barcodes & Automation What the h Heck H kdo thoseh Funny Little Lines Do? Why Barcode The Mail? To improve processing and delivery time The client wants you to The barcode looks really cool If you don t, the USPS will To Save Postage!!! Postal Barcodes The Postal Service has spent billions of dollars on automated equipment to assist with the processing of mail Over 500 million in 2009 Mail without a barcode costs 11 times more to process than mail with a barcode Currently 97% of lettersize and 93% of all flat size mail has a barcode printed on it About 70% of barcodes are applied before the Postal Service gets the mail

22 Barcodes A History The First Barcode One BC The 5 digit Barcode s s The POSTNET Barcode s s Barcodes A History 1996???? The Delivery Point Barcode S s 2008???? The Intelligent Mail Barcode Originally called the 4 State Barcode Mandatory for automation rates in???? Optional Full Service Began May 2009 Required on Reply Mail in???? TFDFADFFAATFDFADDATFFFTFDFTTDFTDATDADDDFDDTDTFTDDDFTDAFFDATFTFTAFD Intelligent Mail Barcode IMB This is next in barcoding mail? TDAFTDFADATFADTAFTDFAFTDFFDTATDFATDAFDTAFDTAFTTDDFFTTADTFATDAFATD This is a sample of the Intelligent Mail Barcode It holds 1000 times more information than the current DPBC barcode You can start using this technology now Mandatory for Full Service IMB Mandatory for Automation Rates????

23 IMB Part Deux The IMB consists of 31 digits represented by 65 bars There are 4 Unique Bars FATD Full F Ascender A Tracker T Descender D FAT D TDAFTDFADATFADTAFTDFAFTDFFDTATDFATDAFDTAFDTAFTTDDFFTTADTFATDAFATD TDAFTDFADATFADTAFTDFAFTDFFDTATDFATDAFDTAFDTAFTTDDFFTTADTFATDAFATD How the IMB Works An algorithm in the software will convert the numerical data to the string of alpha characters to print the barcode Less Than 10 Million Pieces Annually Barcode Service Mailer ID Serial Number Routing Code ID Type 9 Digits 6 Digits Delivery Information 2 Digits 3 Digits Low Volume Low Volume 0, 5, 9, 11 Digits Barcode ID 2 Digits Service Type 3 Digits Over 10 Million Pieces Annually Mailer ID 6 Digits High Volume Unique Serial Number 9 Digits High Volume Routing Code Delivery Information 0, 5, 9, 11 Digits The data in the barcode is not human readable The Barcode Planning Team Even More on How the IMB Works The IMB can be used for Automation Discounts Tracking mail as it s processed OneCode Confirm This is not a free service Automated Address Change Service OneCode ACS First Class 2 for first two notifications, then 8 Standard 5 for first two notifications, then

24 Barcodes on Reply Mail DMM section states ANY reply device included in an OUTBOUND AUTOMATION rate mailing must have a correct FIM and barcode No FIM, no barcode, no automation discount Parcel Barcodes USPS offers discount for pre barcoded machinable parcels GS1 128 is the primary font POSTNET can be used in certain instances Automation Automation refers to the discount offered when the mailer pre applies the barcode Mail qualifying for automation rates usually receives the greatest discounts Strict requirements for mailpiece specifications i and d barcode b d placement l are based on the processing category and class of mail

25 Automation Letters Lettersize pieces must use a delivery point barcode (DPBC) or an IMB Minimum thickness.009 except postcard size.007 Maximum weight 3.5 ounces Heavy Letter Mail Over 3 ounces Must be in envelopes with barcode in address block The length is always parallel to the address Pieces must meet the aspect ratio Most regulations due to speed of processing 36,000 pieces per hour That s 10 pieces per second Automation Letters Aspect Ratio Lettersize pieces must maintain the aspect ratio 1.3 to 2.5 Automation Letters Aspect Ratio

26 Automation Letters Tabbing Quick Service Guide 210b Paperweight and number of folds determines the correct number of tabs Tabs placed on bottom of mailpiece Must be able to absorb water based ink used in barcode clear l zone Should not be perforated Tabbing regulations are very confusing and misunderstood by both mailers and the acceptance Beginning in 2012, perforated tabs will not be allowed on folded self mailers or booklets Tabbing Self Mailers Tabbing Self Mailers

27 Automation Lettersize Booklets Automation compatible lettersize booklets have different specifications than other lettersize mailpieces DMM A booklet is defined as a mailpiece with a bound edge. Sheets must be fastened with at least two staples in the manufacturing fold (saddle stitched), perfect bound, pressed glued, or joined by another binding method that produces an end where pages are attached together Maximum weight 3 ounces Automation Lettersize Booklets Automation Flats Most flats will qualify for automation rates Minimum size 5 high x 6 long x.009 thick Maximum size 12 high x 15 long x ¾ thick Longest edge is always the length Must be rectangular in shape 1/8 rounded corners are acceptable Must maintain uniform thickness No more than ¼ between thinnest and thickest parts Do not measure 1 around perimeter Must meet flexibility and rigidity standards

28 Automation Flats Flexibility Standard Flat size pieces must be flexible Automation Flats Rigidity Standard Often called the Droop test Non Automation Mail Mail without barcodes pre applied is considered non automation mail This doesn t mean that the pieces won t be run on Postal Service equipment Letters without barcodes are called Machinable There is no such thing as a non auto letter Flats and Parcels without barcodes are called Non Auto The Postal Service will attempt to put a barcode on all non automation pieces

29 Non Automation Mail Mail without barcodes pre applied is considered non automation mail This doesn t mean that the pieces won t be run on Postal Service equipment Letters without barcodes are called Machinable There is no such thing as a non auto letter Flats and Parcels without barcodes are called Non Auto The Postal Service will attempt to put a barcode on all non automation pieces Non Machinable Letters When a lettersize mailpiece is not compatible with automated equipment it is considered non machinable Non machinable letters are not eligible for automation or machinable discounts Non machinable letters are sorted by hand These pieces are subject to a surcharge or higher rate First Class Surcharge 20 each Standard between 9.1 & 31.5 per piece Reply and Return Mail Somebody Wants This Back

30 Reply Mail Allows an easy method for customers to communicate with your business using the mail There are four basic types of reply mail Business Reply Mail (BRM) Addressee pays postage and handling fees Many rules, regulations and fees Courtesy Reply Mail (CRM) Sender pays postage when returning Meter Reply Mail (MRM) Addressee pays postage, no handling fees Permit Reply Mail (PRM) Addressee pays return postage at when outbound mail is entered Business Reply Mail Business Reply has very specific format elements that must appear on each piece All ink colors are acceptable as long as a 40% print contrast ratio is maintained Group Exercise Courtesy Reply Mail Courtesy Reply Mail is a pre printed reply device where recipient usually affixes the postage when mailed back CRM uses the FIM A No authorization or permit is required Pieces i should ldbe designed dfor processing i on automated equipment Preferred elements postage reminder delivery address return address area

31 Reply Mail General Rules Pieces larger than 4 ¼ x 6 must be.009 thick The minimum size for a Business Reply Label that is affixed to a piece of mail is 2 x 3 All reply devices enclosed in outbound mail must include a FIM and barcode to be eligible for automation i rates Domestic BRM may not be sent to foreign countries International Business Reply Mail (IBRS) information is available in the Int l Mail Manual or at pe.usps.gov The Good The Bad And The Ugly The true co$t of poor design Mailpiece Design Oop$ #1 Self Mailer not meeting aspect ratio

32 Mailpiece Design Oop$ #1 Self Mailer not meeting aspect ratio Piece did not qualify for automation rates Currently would mail at Non Machinable letter rates 300,000 total pieces mailed 240,000 at 5 digit i rate eachh 60,000 at 3 digit rate each Postage impact $47, Mailpiece Design Oop$ #2 Standard Fletter Mailpiece Design Oop$ #2 Standard Fletter

33 Mailpiece Design Oop$ #2 Standard Fletter Lettersize piece mailing as flat due to design and address placement Client chose to mail at Standard flat rates 217,000 pieces i mailed 174,000 at 5 digit rate each 43,000 at 3 digit rate each Postage impact $26, Client had mailed three times before learning that turning the address would have saved them a total of over $75, Mailpiece Design Oop$ #3 Self Mailer with vertical Fold Version A Fold at this end Mailpiece Design Oop$ #3 Self Mailer with Vertical Fold Version B Fold at this end

34 Mailpiece Design Oop$ #3 Vertical fold on trailing edge Piece is not eligible for automation rates DMM c Vertical fold on right edge Piece is 6 x 11 (lettersize) and could have mailed as an automation flat or a non machinable letter 475,000 total pieces mailed 380,000 at 5 digit rates 11.0 (flat) or 14.4 (non mach) 95,000 at 3 digit rates 17.1 (flat) or 21.9 (non mach) Postage Impact Flat $58, Non Machinable Letter $75, Mailpiece Design Oop$ #4 Use of wrong ancillary endorsement line Standard Flat 10 x 13 Booklet 3.4 Ounces Return Service Requested $1.44 Change Service Requested 50 Mailpiece Design Oop$ #5 Use of wrong ancillary endorsement line University sent out course catalog weighing over 9 ounces with Address Service Requested ancillary service endorsement Used a list not updated in 3 years Mild Mailed out 80, catalogs tl Had over 4,000 catalogs returned with address changes over one year old Cost of returned pieces Address Service Requested $5.57 each $22, Return Service Requested $2.41 each $9, Change Service Requested 50 $

35 More Oop$ s s Wilma Flintstone 1234 Boulder Dr Bedrock BC TDAFTDFADATFADTAFTDFAFTDFFDTATDFATDAFDTAFDTAFTTDDFFTTADTFATDAFATD s s More Oop$ More Oop$

36 More Oop$ More Oop$ More Oop$

37 Help! Please Help! I Know Someone is Out There! Postal Information Resources general information pe.usps.gov DMM and QSG on line ribbs.usps.gov detailed information Mailpiece Design Analyst (MDA) Business Mail Entry Unit Mailing Requirements Departments Domestic Mail Manual & Various Publications Trade Associations like PISTL or MFSA Your Rep at Swift Print Communications Postal Hotline or Parting Thoughts Direct mail works as part of a multi gration marketing program Understanding the rules and regulations will assist your customer in getting the most value for their postage dollar Let s put the FUN back in dysfunctional When things don t go quite right, there is usually a solution close at hand, just remember not to GO POSTAL! That s my job and I can prove it!

38 Thanx for your Attention and Happy Trails G. P. George Heinrich, PPhD CQMPS, PIG, CMQCS, OMG, CMDP Postal 911 PO Box 3096 Parker CO

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