Weighing Your Options, Part 2 of 3
By Lloyd M. Moss, Group 1 Software
A Pitney Bowes Company

Mail sortation is one of the three processes necessary to earn postage discounts. Pre-canceled stamps, by meter imprint or with permit imprint, can be used to pay for postage on presorted mailings.  In parts 2 and 3 of this series, we’ll examine those pre-cancel methods, which are the most cost-effective and most frequently used evidencing options for business mailers. This week, let’s focus on permit imprint. 

Production mailers are authorized to mail without affixing postage if they have a Permit Imprint Advance Deposit Account. A permit imprint indicia must appear on each mail piece to indicate postage has been paid. Funds to cover postage must be deposited into the mailer's Permit Imprint Advance Deposit Account either prior to or at the time of a mailing.  Larger volume mailers can also link their permits to bank accounts using the USPS CAPS program.  This program allows funds to be transferred automatically from the mailer's bank account into their permit to cover postage expense at the time of mailing.  Permit imprint indicia can be used for First-Class Mail®, Priority Mail®, Standard Mail® and Package Services. Mailings must be deposited at a Bulk Mail Acceptance Unit (BMAU) or the mailer needs to establish an in-house Detached Mail Unit (DMT) to verify and accept the mail.

Benefits of Permit: Simplicity

Using permit imprint to pay for postage allows mailers to pre-print the permit imprint indicia on their envelopes to eliminate the need for postage meters and supplies. When using envelopes with pre-printed permit imprint indicia “in-line,” the production workflow can be simplified since the mailer doesn’t have to worry about metering mail at different rates for different presort discounts, as was true before the advent of the Reset-On-The-Fly™ feature for meters.

Under some circumstances it’s best to print the permit imprint indicia at the time of production rather than using envelopes with preprinted permit imprint indicia. In-line indicia printing eliminates the need for managing inventories of preprinted envelopes and allows mailing dates to be printed as part of the indicia, an important feature for a number of industries. The technology is now available to do this reliably and quickly enough to meet the needs of high volume production lines without complicating the production workflow.

Permit Imprint Indicia mail is usually limited to identical piece weight mail.  Permit payment of non-identical piece weight mail is possible only under the USPS Optional Procedure (OP), Alternate Mailing Procedure (AMS) or Manifest Mailing System (MMS) programs.  Optional Procedure and Alternate Mailing Procedure programs are very highly specialized; for more information on them you can read DMM 705.30 and 705.40.  However, the Manifest Mailing System (MMS) has broader applications, and we’ll examine MMS later in this installment.

Permit Mail’s Management Issues

The greatest weakness of permit mail is that it’s often difficult for mailers to manage. If mailers aren’t printing the permit imprint indicia “in-line” as the mail is produced, and if they use multiple permits, maintaining and managing envelopes with pre-printed indicia can be cost prohibitive. In addition, the USPS requires mailers to maintain separate permits at each post office where they will be depositing mail.

But an even more glaring problem is that using the permit imprint option does not incorporate the security features and benefits associated with the Information Based Indicia (IBI) technology being advocated by the USPS. Unless postage is being paid for via the CAPS program, mailers must fully fund the correct permit in advance of the mailing.  If they underestimate their postage needs, their mailing might be held up until the balance is deposited into the permit account. And, in some cases, the USPS will return the entire mail run to the mailer - thereby interrupting both their mail stream and cash flow.

The Manifest Option

For mailers that have large, ZIP Code™ dense mailings of non-identical piece weight mail, most notably in the telecommunications and utility industries, a permit imprint with a manifest is an attractive postage evidencing option. The manifest option combines the discounting of presort with the ease of workflow offered by permit payment.

Manifests, in combination with information printed on each piece of mail, can be used to document non-identical weight mail pieces.  It allows the USPS to verify these mailings and accept payment by permit.  In this way, manifests are used both to provide evidence of postage payment and to achieve postal discounts.  Again, this method is most popular with companies that have large, ZIP Code™ dense mailings of non-identical piece weight mail; unless ZIP Code™ densities are high, doing machine-based presort of non-identical weight mail can earn much better postage discounts. If the mailer processes a large number of mail pieces spread out across many mailings each day, using an MLOCR sorter in-house to commingle these mailings is the best processing method.

The major barrier to manifesting is obtaining accurate information on mail-piece characteristics, a factor that has historically reduced the number of mailers for whom manifesting is the best solution. The cost of obtaining this data must be figured into the overall picture. In addition, the USPS requires mailers using manifesting to implement quality control procedures (documented in PUB 401, chapter 3) that will often impact the workflow and productivity of the mailing operation.

For this reason, Pitney Bowes developed a Net Manifesting solution on the DFWorks® platform that builds a more accurate, USPS-compliant manifest based on the actual results of production. Mail runs from several inserters can be combined into one manifest for additional postage savings due to greater postal densities. The DFWorks® GUI creates the manifest, enabling the user to select only desired trays and “model” the manifest and postage costs if desired. The DFWorks® Postal Manifesting module can adjust the postage paid for mail pieces that are damaged in the inserting process. These pieces are later reprinted and subsequently mailed.

Model manifests can be created prior to closing out the mailing. Depending on damage repair and reprint procedures, this can help determine if it’s advantageous to manually repair and replace pieces that were damaged or removed during the insertion process. Spoiled pieces that aren’t included in the manifest and postal calculation or the supporting documentation allow the USPS to accept and audit the submitted trays of mail. This capability saves postage and meets all USPS requirements for taking the appropriate postage discounts. 
 
When mailers use both the DFWorks® Manifesting and Postage Accounting modules, it’s possible to create consolidated postage reports for all posted mail, regardless of postage evidencing methodology. Unlike other manifesting solutions, DFWorks® Postal Manifesting is a component of a comprehensive mail management software suite that allows mailers to address many of the production and financial management challenges involved with producing mail.

Weighing Your Options, Part 3 of 3
By Lloyd M. Moss, Group 1 Software
A Pitney Bowes Company

In the first two installments of this series, we reviewed the USPS’ Digital Meter Migration program, discussed the three steps necessary to achieve postage discounts, and examined permit imprint and permit imprint with manifest as postage evidencing options. In this conclusion, let’s focus on another popular and cost-effective option – digital metering – and discuss applying mailers’ unique business models to postage evidencing solutions.

When doing machine-based presorting the most cost-effective and reliable method of evidencing is to use a postage meter to affix postage to your mail at a rate based on the weight of the piece. When the multiple line optical character reader (MLOCR) is able to determine the best rate at which postage should be paid, the mailer pays the difference between the rate at which the mail was metered versus the mailing’s actual postage rate as determined by the sorter.

If either the total piece volume or number of mailings is too low to provide a good return on investment on the MLOCR, providing this mail to a presort service bureau like PSI Group will yield the maximum savings both in postage and labor.  Doing machine based-sorting, either in-house or outsourced can also simplify the mailer’s workflow to yield substantial labor savings.

Digital Metered-Mail: A “Must Read”

In the past, decisions about postage evidencing were made based on broad business needs: although some of the larger telecoms and utilities used a permit solution, most transactional mailers processing mission-critical bills and statements depended on the flexibility and reliability of the metering process. Over time, the meter indicia itself has come to signal to recipients that a particular mail piece was important and a “must read” and, as a result, mail with meter indicia tends to have a higher “open rate” than mail with permit indicia.

In contrast, direct mailers have been willing to sacrifice open rates for low cost mass production printing and the easy workflow of bulk rate processing. But technology is changing this, with print on demand (POD) and “intelligent” inserting solutions challenging long-held assumptions about how to reach prospects most cost effectively. Added value such as color and variable data enable greater personalization, which leads in turn to high open rates.

New technology, such as the DM Infinity™ Digital Mailing System, makes metering on demand direct mail a more viable option for marketers. Cleaner, more easily-read, information-rich meter indicia increase open rates and the timeliness of direct mail pieces and have subsequently led many direct mailers to add more digital postage meters to their technology mix. As the USPS adds programs like mail tracking and “date certain” delivery to standard mail, direct mailers will find even greater value in metering their mail. In addition, Pitney Bowes worked closely with the USPS in the development of the DM Infinity™ Digital Mailing System to ensure it was a secure IBI- (Information Based Indicia-) compliant meter to safeguard company funds and protect branding.

The speed, ability to meter mixed weight mail on a single DM Infinity™ model, reliability, extremely low jam rate and low cost per impression changes the metering paradigm.  A single DM Infinity™ meter can cost-effectively apply postage to high-volume mail runs that in previous years would almost always have been processed as permit imprint mail. The mailer also benefits from the high open rate enjoyed by metered mail. 

The Power of Personalized Mail

For most brand-conscious companies, the image that the company presents to clients is part of a broader customer communication management strategy. The ability to control the appearance of the meter indicia supports such a strategy.
 
A professional, clean-looking mail piece is likely to be the first impression a customer has of a brand. A poorly produced piece of mail can send the wrong impression, eroding customer confidence. Worse, a piece with the wrong or outdated customer information or with the wrong document inside could cost that customer’s business.

The DM Infinity™ Digital Mailing System gives production mailers of every type and in every industry new opportunities to quickly personalize mail pieces -- with the Reset-On-The-Fly™ feature for meters -- with postal inscriptions, endorsements or customized messages that make their mail stand out as a “must-open” mail piece. Service bureaus can differentiate themselves by adding value to their clients’ communications by personalizing mail with company logos, specific vertical market messages or other information that further increases open rates. 

Choosing the Right Postage Evidencing Solution

Whether a mailer’s business model supports permit payment of identical piece weight mail, manifesting non-identical piece weight mail, digital metering or any combination of the above, it is important that implementation does not complicate or slow its production process.  Loss of productivity can easily offset the savings earned through postal discounts.  Having the flexibility to produce permit imprint or metered mail without changing the production process and managing large inventories of envelopes with pre-printed indicia will improve rather than degrade productivity. 

Pitney Bowes offers a wide range of postage evidencing solutions. Pitney Bowes SmartMailer and Group 1’s MailStream Plus® solutions can handle virtually any presort software need.  If a barrier to manifesting is obtaining more accurate information on the mail-piece characteristics, Pitney Bowes offers StreamWeaver® print stream management software.  Pitney Bowes also offers Olympus® II MLOCR sorters that sort both outbound and inbound mail pieces.  PSI Group, another Pitney Bowes company, provides presort services to many organizations in the United States. 

Moreover, Pitney Bowes Global Financial Services (GFS) offers programs to help mailers get the most value for their money. In addition, a seamless interface to DFWorks Postage Accounting and Funds Management helps customers monitor postage spending and mailing trends, allowing them to set necessary budgets and/or limits, and automate refills. Pitney Bowes offers the greatest variety of technology and services to meet all of these needs, no matter how large or small your business may be.

An 86-Year Legacy of Excellence

The two major reasons that the USPS is driving towards digital compliance are (1) security of funds and (2) the need for IBI. Mailers should ask themselves which method provides the best solution for reducing costs overall, has the best funds security for postal dollars, and coheres to the future goals of the USPS to track mail and reduce costs.

Pitney Bowes is a brand that is virtually synonymous with postage evidencing and innovative mailing solutions. Our commitment to the mailing industry goes far beyond that of any other organization. We provide the world’s most comprehensive suite of mailstream software, hardware, services and solutions to help companies manage their flow of mail, documents and packages to improve communications. We have developed a complete postage payment solution suite that includes permit and manifesting solutions.

In business, the best course of action is often a flexible course of action: as business objectives change, tactics must change with them. Different types of mail serve different business needs. Vendors that advocate a single postage evidencing methodology – or that can only support a single method – cannot adequately meet changing needs.  Among leading postal vendors, only Pitney Bowes has made the investments in technology and research needed to develop a suite of solutions designed to meet the needs of virtually every mailer.