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Many companies performing the co-mingle process have little influence over the mail coming to them. And often, mail finishing from a press run, inserting process, or table-top ink-jet is provided to the co-mingle process without understanding the value and cost of the additional process.

Digital Co-mingle offers the ability to understand the overall value a mailpiece has in a single mailing or in a co-mingled mailing. Diagram A describes the typical process of mail flowing from data, through finishing and into co-mingling.

Diagram A (click to enlarge)

Diagram B demonstrates the process when driven from a complete analysis of all the data being presented.

Diagram B (click to enlarge)

The opportunity is identified; the value is realized in process and execution. With the Digital Co-mingle process you define data from different mailings with various rules. This allows playing digitally with the data, before creating the physical mail, to determine the optimum value and establish a plan for the manufacturing and presentation of mail for acceptance.

When an optimum plan is determined, the analysis allows you to set data flags in the data files used to drive the process. The data flags are used to select process methods through BCC software, and onto print and inserting or mail finishing processes. The output from finishing will result in finished mail trays receiving maximum value or mail designated for a co-mingling process for enhanced value.

The Digital Co-mingle process does not just consider 5-digit levels for finishing from an inserter. All levels provide opportunities. The analysis considers finishing a Mixed AADC piece at the inserter when it is determined that it remains as a Mixed AADC mailpiece in a co-mingle process.

You may have noticed mention of BCC in our process. We are working to enable a more integrated approach with BCC software that will allow more automation throughout the platform. In addition, the analysis tool creates data for pushing to NetSort. Overall, our Digital Co-mingle solution creates opportunities to move 90% or more mail into a one-pass process.

We look forward to sharing more innovation and upcoming capabilities in our solutions in the coming months.

• Site Sharing — For companies sharing mail or with multiple sites, NetSort now supports moving Full Service mail data. Site Sharing moves data from the site sharing to the site needing to process the mail. The data updates automatically.
• Sub Mailing — For companies processing single mailings having many drops, the Sub-Mailing function allows for sub-groups to be created with separate paperwork or Mail.dat for Full Service to be submitted for each drop. Upon completion of the mailing a complete set of documentation and Mail.dat is available.
• Reply Rides Free — This feature is available for mailers taking Full Service discounts. When set in the profile, the Full Service Mail.dat is created with the appropriate settings. The USPS validates after submission and a rebate is given back to the mail owner. Mail owners must be pre-qualified with the USPS to receive the rebate.
• Mail.dat 11-1 — This version is required to support Reply Rides Free. It is also becoming the industry standard. BBH and the USPS support Mail.dat versions 09-1 and 11-1.
• MASS Cycle N — Includes several improvements to address assignment. We are offering an upgrade license to MMT SABRE Prime from MMT SABRE that includes a new computer and camera that provides optimum addressing on our OCR platform.
• Uniqueness over 45-days for Full Service — Validates all Full Service unique IMB data across the 45 days mailed in your NetSort mailings. The 45-day period is based on the mail date set within NetSort for the mailing. After each mailing is done, and prior to generating the paperwork, mailers can check the accuracy of the Full Service data. Any duplicate IMbs found can be eliminated, downgraded to Basic Service, or accepted as-is.
• APEX Bin, Feeder, and LDU upgrade — Over the past few months we have made significant updates to the APEX sorter to improve mailpiece throughput. This has enabled companies using APEX or X-Class Bins to achieve significant improvement in mailpiece throughput and handling.

In addition, we will also have several other features coming in2011 that enable faster and more efficient processing. Some of the other things we are working on include more flexibility in how and when pallet placards are produced, as well as our new brand Digital Co-mingle.

The remote tray and pallet application provides connectivity to NetSort from other areas of your facility where pallets are finalized. The application can tie into your pallet scale so that the pallet weights can be captured. It also provides the ability to produce the placard on demand.

This can be accomplished by manually selecting the placard you want to produce from the menu, or by scanning a tray tag on the pallet to automatically print the placard. When the pallet is weighed, the weight is captured and provided back to NetSort for posting in Mail.dat and on the 8125 documents. This is an important addition for Standard Mail for freight planning logistics.

When drop shipping Standard Mail pallets with your freight provider, you will now be able to send an electronic Mail.dat file containing the pallet weights for each pallet. And using Full Service, you will get barcoded placards that can be scanned and tied back to the data for additional quality control.

For companies using Full Service, the USPS did relax other January 2, 2011 requirements.

Specifically, they delayed the penalty assessments. To date, BBH has over 100 companies capable of taking Full Service discounts with over 60 receiving the discounts in both First-Class and Standard Mail as of January 31, 2011. Our Professional Services team has engaged with many companies through this process, providing education and assistance with the Test Environment for Mailers (TEM) and Parallel processing requirements.

While we have been successful in working with our customers moving into Full Service, it was evident through MTAC and industry association discussions that the USPS, some vendors, and many companies were not well prepared to meet the new requirements and therefore the implementation date was delayed.

We continue to offer services and work with companies in reviewing and cleaning up potential compliance problems so that when the rules do go into effect our Full Service customers will not be at risk.

As we started 2011, we had barely recovered from the holidays and first of the year changes, when on January 12th the USPS announced a postage price increase that will take effect on April 17th. While an increase was anticipated in May, the April date simply accelerated the inevitable.

The increase impacts presort levels in First Class and Standard Mail categories, leaving First Class single-piece letters at $0.44. The First-Class letter increases affect each automation level, with 5-digit seeing an increase of $.005 per piece while the other levels will see an increase of $.008 per piece.

While the gap between single piece and 5-digit reduced, the new rates reward mailers that can achieve 5-digit discounts by increasing the gap between 3-digit and 5-digit.

An example impact is shown below showing postage increases $3,668.

* Click to enlarge

Similarly, First-Class flats will see postage improve by $.007 per piece for 5-digit, with postage for a 1 ounce piece going from $.38 to $.373 and will increase by $.005 per piece from $.542 to $547 for 3-digit, and $.002 per piece from $.603 to $.605 for ADC.

Standard Mail letters increased $.004 per piece across all levels for local entry, NDC increased $.005 per piece, and SCF increased $.004 per piece.

Using the same qualification data from the First Class example above, the cost for NDC drop shipment goes up by $2,513. The same counts for SCF only go up by $2,014. The $.001 additional savings on SCF results in $499 savings over NDC drop ship.

In Standard Mail flats, while the 5-digit and 3-digit increased, the ADC and mixed ADC decreased. In doing so, the gap between ADC and 5-digit increased by $.007 per piece for local entry while the ADC to 5-digit gap for NDC and SCF decreased by $.005 per piece.

Overall, the changes in Standard Mail flats encourage automation and this creates opportunities for co-mingling. Standard Mail flats and bundle-based system software supported by our NetSort software also offer the Full Service discount.

While the price change takes away some value in postage it does create incentives for mail owners to consider co-mingling in an effort to achieve the best discounts while also improving in-home delivery by creating better qualification to 5-digit.

With a number of market alternatives available to mail owners, postage costs have become a key negotiating point. Mail owners are now challenging the explanation of "postage is what it is." They are looking for the best options to manage postage costs in consideration of other services such as co-palletization, co-mingling and tracking to validate in-home dates.

The direct mail industry continues to increasingly rely upon targeted marketing programs. Customers who used to mail several million pieces in a single cell (batch) are now fracturing them into multiple offers to fewer prospects, often using a variety of media. While these targeted mailings can have higher response rates, they frequently result in lower efficiency with higher production and postage costs.

The effect of smaller cells on postage is twofold. Mail that formerly qualified at the optimum qualification discount is now moving into higher cost levels. Not only does this negatively impact the cost of qualified postage per piece, but it adversely affects delivery. With direct mail, smaller mailings cannot be accepted at a Network Distribution Center or Section Center Facility (SCF), and instead enter the mailstream at the local post office. The result: higher costs to the mailing service company and ultimately, to the mail owner.

Much of the industry has widely accepted the process of co-mingling smaller list mailings and cells using sophisticated high-speed sorters. Smaller jobs sent to a co-mingle department or outside presort bureau not only gained postage discounts by combining many smaller mailings, but also realized deeper penetration and faster delivery by achieving SCF entry.

The economic benefits of co-mingling are clear, and the challenge for mailers is how to determine the best value in a co-mingle environment—without adding complexity or cost. New software from BÖWE BELL + HOWELL helps mailers measure the impact of co-mingling on mailings using a variety of variables and can set thresholds based on operational factors. Plant managers can now quantify the benefits of co-mingling as they make strategic decisions on how to manage their operations.

Additionally, digital co-mingling provides mailers with the ability to apportion individual mailings to achieve larger mailings, with heavy concentrations of 5-digit automation qualified pieces, and thus benefit from the lift provided to the less-qualified pieces. This added benefit of digital co-mingling helps reduce the overall size of the mailing, limiting the amount of labor, equipment and time required to process the job while providing the maximum postage benefit per piece.

The postage savings of co-mingling has never been greater. Potential savings from co-mingling are up to $18 per thousand for local-entry mail and up to $43 per thousand for SCF-entered mail. Postage savings can yield $1 million or more for companies that mail millions of pieces annually.

Digital co-mingling tools become increasingly important to enable companies to identify, execute, and track their ability to achieve desired results and return on investment, while continuing to use mail as a viable communication channel for their customers.

The questions in the paper have been discussed many times in the media and elsewhere — but usually piecemeal, one topic at a time. In this paper, because they list virtually all of the key issues facing the USPS in one place, as well as alternatives, it adds depth and context to the topic: http://www.uspsoig.gov/foia_files/RARC-WP-11-001.pdf

In a related note, Senator Susan M. Collins has requested that the OIG conduct a review to determine the effects USPS Compliance Rules have on business mailers. If you would like to participate in this anonymous online survey, go to: http://survey.uspsoig.gov/cgi-bin/qwebcorporate.dll?idx=P9XUT7.

You can also go to a site they created for exchanging comments with mailers and OIG employees: http://auditprojects.uspsoig.gov/2011/01/25/congressional-request-senator-susan-m-collins-effects-usps-compliance-rules-have-on-mailers-11ro002ms000/

While these changes will not happen overnight, it is a good time to step back and assess where the presort industry can add more value in the future. There are several areas – however, clearly this will take new thinking and perhaps changes to existing business models. Priority one is achieving maximum discounts – e.g. 5-digit discounts for a large portion of your sorted mail volumes (First Class or Standard A). The First Class presort industry has already been transformed by one very large player to become an industry that has national large mailers and local mailers. In either case – the main value that the industry can add is to commingle mail volumes to achieve the highest 5-digit discount volumes that are possible.

Increasingly, mailers who handle non-local mailings need to work with partners to achieve these discount levels. Given the competitive threat of national networks and the USPS designating AADC and 3-digit sorting as optional – maximizing 5-digit is the best option for remaining competitive. To achieve this, presorters should look for local partners – data/manifest-prepared mailings or other presorters – to share mail in a manner that maximizes discounts.

BBH has implemented tools in our BCC and Sorting software offerings, and we continue to refine them to help mailers achieve these goals. Our vision is to create a connected set of offerings, from list processing or from meter-prepared mailings, which seamlessly connect to NetSort to enable mailers to achieve maximum 5-digit discounts. Unique IMbs are a foundational building block for achieving these goals and receiving USPS approvals for multi-site mail movement.

Beyond optimizing postage, the data-rich platform from IMb enables dramatically improved opportunities for customer service. Our postal software offerings enable significantly improved customer service – recently implemented features that improve transparency and feedback for your customers. Some of these features include the ability to import Mail.dat files from your clients, optimize sort schemes and report back based upon actual processing results.

It also includes mail tracking through the USPS IMb Confirm platform and the ability for your customers to access your NetSort server via the internet to check on job status. Some mailers are also beginning evaluate the sorting and delivery process. Mailpiece tracking from data (pre-print) throughout the document lifecycle is now readily available in the toolset that is part of our offerings. All of these items are examples of new services that you can provide to your clients.

** This article was originally published in the 2010 Q4 edition of the The Broadcast, BÖWE BELL + HOWELL’s sorting customer newsletter. If you would like to subscribe to the email list to receive these newsletters, please send an email to marketing@bowebellhowell.com.

5-digit discount spreads (vs. 3D) are rich in Standard Mail – particularly as a percentage of the overall discount. In Standard A, the migration from AADC or 3-digit to 5-digit typically not only involves presort savings, but also what can be a highly profitably drop-ship discount. Overall, the maximum discounts in standard mail are more on a percentage basis when measuring from mixed AADC to 5-digit due to the significant discounts that are associated with drop shipment.

Partnering with a transportation provider – and there are many in the industry – is a vital part of your Standard Mail program. The sweet spot for large comminglers is the incremental 5D / SCF discounts for the billions of mailpieces annually that are candidates for this added discount!

Other areas that have been a big focus for many during the past several months are implementing Intelligent Mail barcodes and Full Service discounts. While the added discounts are nice – particularly for First Class mail at $3 per thousand – it is now time to look beyond compliance toward a future where the IMb serves as a money-making platform for your business.

The USPS reaffirmed its commitment to the IMb program by continuing the discounts in the proposed rates. It is now clear that these discounts will be in effect through at least next year. Over the longer term, we expect full-service IMbs and the data-rich Mail.dat files that go with Full Service mailings to be part of the fabric of USPS. We expect that the discount structure will evolve to reflect this and that USPS will implement quality-based incentives based on the data-rich capabilities of the IMb. We also expect that there will be changes over the long term in the mailing process where IMbs are assigned.

** This article was originally published in the 2010 Q4 edition of the The Broadcast, BÖWE BELL + HOWELL’s sorting customer newsletter. If you would like to subscribe to the email list to receive these newsletters, please send an email to marketing@bowebellhowell.com.

So… where do we go from here?

When the USPS released their results last year on the year 2020 vision for mail volumes there was certainly cause for concern. Their forecast calls for continued declines in First Class Mail and stability of Standard Mail (Standard A) with a shift in volumes from non-targeted media (newspaper, magazines) to targeted or personalized direct mail. My fervent hope is that the First Class declines that were forecast will prove to be more conservative than what is ultimately experienced but the implication is clear – mailers and presort providers (in particular) need to explore new ways to grow revenues and reduce costs to increase profits.

The most welcome news was the recent decision by the USPS Postal Rate Commission to decline the USPS exigent rate increase thus bringing postage rate stability, at least in the near term. The PRC left the door open for the USPS to come back and ask again; whether for a lesser increase based on inflation (CPI) or another exigent increase – but this will not occur until later.

More importantly, the PRC reiterated what many in industry have been saying (including BBH as a member of the 21st Century Mailers Coalition), that Congress needs to act to move the over-funding that is still being held by U.S. Treasury back to the USPS.

The PRC retained yet another group of actuaries recently who confirmed that this over-funding is at least $50 billion. A win here would be the single biggest opportunity for the industry to maintain long-term rate stability.

Despite the uncertainty, the good news is that there are opportunities on the horizon. I suspect that presorters who have already dipped their toes into the commingling of Standard A or First Class manifest mailings are already seeing some signs of hope.

Mailers are renewing their emphasis to compete more effectively with the current industry overcapacity situation. With postage representing more than 50% of the document cost in most transactional mail environments and nearly 90% in some environments (particularly Standard A), obtaining the lowest possible postage costs is the number one priority for being competitive.

We estimate that today somewhere between 55-65% of automated First Class mail is mechanically sorted or commingled while only 15-25% of Standard A is commingled. Changes to the USPS payment platform – specifically the ability to pay out of multiple CAPS accounts even for commingled mailings (a requirement for many customers) is a key enabler for what we believe will be a significant increase in standard mail sorting. Over the next few years, we expect to see the 15%-25% of sorted volumes rise towards 50%. This equates to billions of additional mailpieces that are candidates for sorting.

Take note, today’s business models for Standard A sorting are significantly different than what you may have been familiar with. The VAR model, which was commonplace in the past for the sorting of metered mail, has been replaced with a model of transparent postage costs and negotiated service fees.

** This article was originally published in the 2010 Q4 edition of the The Broadcast, BÖWE BELL + HOWELL’s sorting customer newsletter. If you would like to subscribe to the email list to receive these newsletters, please send an email to marketing@bowebellhowell.com.

So, how can these tools be used for something more than trying to land your next job or finding out what your old high school friends are up to? There are many answers, and companies who are not at least getting started on planning how they can leverage the wide reach of social media tools are missing a huge opportunity to connect with potential customers, partners and future employees.

Some of the people we talk to understand how individuals and business to consumer (B2C) companies can tap into social media, but many are not yet convinced that there is also value for business to business (B2B) companies. Yet with the widespread adoption of social media, businesses have a compelling reason to begin building these tools into their overall communications strategies.

Our 2011 marketing plan calls for extensive use of social media channels. The type of information we’ll share will include everything from updates on our company, new products and services, to customer success stories and commentary on trends and opportunities in our industry.

Social media will not replace our use of traditional PR and marketing channels, but instead complement them and help us deliver information how and where people want to receive it. Some of our phase I uses includes a company channel on YouTube, this blog site, where our product and industry experts can discuss some of the latest trends and issues, and Twitter, for notifying our followers of BBH news. Our phase II plan will include using Facebook and LinkedIn for marketing and communicating with our followers.

A fun video to watch that shows just how fast social media is growing is here:

We encourage you to connect with us and share some of your ideas and success stories, and help us create an interesting and informative environment.