So You Want to Be a Mailing Services Provider

Once upon a time, adding mailing services to your printing company’s business mix was pretty simple. Known as lettershop services, mailing operations included affixing address labels; sorting mail into bundles of addresses going to the same place (such as a ZIP code or a state); securing the bundles with rubber bands, adding colored stickers to the first mail piece in the bundle, putting the bundles in trays, and taking the trays and a hand-completed form to the post office. We trained our bindery workers to sort and bundle mail, and had on-call workers (often retirees) to assist with big jobs.

Then in 1996 everything changed. The USPS began its transition to automated mail processing, and mail preparation by mailing services providers changed from predominantly handwork to tasks requiring computer skills and equipment to print addresses and barcodes and to affix wafer seals. Some lettershops didn’t make the transition and ceased business; some equipment vendors did, too.

Concurrently with the shift in the mailing industry, printers have been transitioning production departments from analog to digital. Today’s prepress department is fully digital, digital printing is as viable as offset, and variable data software is affordable and relatively easy to learn. Gather all this together, and there is a growing interest among printers to also become mailing services providers.

So what does it take to add mailing services to your print shop today? A much different set of skills than it did 20 years ago.

The Mailing Department of Today

The center of activity for the mailing department in today’s print shop is no longer the bindery. Instead, it’s database management – the mailing industry equivalent of prepress. And the first investment isn’t equipment, it’s software and a PC to run it on. Think of equipping your database department as you would prepress – emphasize professional grade software, tools to fix badly-constructed files, and programs for output.

Professional grade software means real mail list management software that incorporates address standardization and postal coding. It also has other features like duplicate detection and the ability to produce required USPS reports. Using Excel or Access for mail list management is like using Word or Microsoft Publisher for document creation. If you intend to be a mailing services provider, make the investment in real mail list management software and in the training to learn how to use it.

Many customers maintain their own mailing lists. That means a mailing services provider will need software to troubleshoot and fix customer files. The two most common problems with mail lists are structure (the fields that make up each individual record) and content (how each individual field is populated).

A file may have too few or too many fields, or the fields may not be the right size. And a poorly structured mail list invites content problems. If there is no field in which to enter the name of a foreign country, it will either be left out or entered where it doesn’t belong (for example, in a ZIP code field). While this solves the immediate problem for the person doing data entry, it creates a problem for your database manager who must prepare the list so the address elements will print correctly on the mail piece.

Since printing an address while you are printing the mail piece itself is a variable data printing application, you will need software that controls both the document and the mail list. If you are printing more than one document on a sheet (an 8x5" post card on an 8.5x11" sheet, for example) the software will need a feature called interleaving to keep the addresses in correct presort order.

Generally speaking, the cost of a suite of software programs for mailing services is more than a corresponding suite for prepress and is roughly comparable in complexity of use. This means an investment in staff training and a period of low productivity until the person becomes proficient. The time it takes to become proficient may be longer than expected if there is not enough volume to keep the worker active daily on mail lists.

Equipment

Besides a computer, the database department will need a high quality postage scale to weigh mail pieces. Accurate weight is required for presorting and to complete the USPS Statement of Mailing. A micrometer is also a useful tool.

Basic lettershop services include addressing the mail piece, tabbing folded self mailers, inserting and sealing envelopes, affixing postage via meter, preparing for bulk mail entry and delivery to the USPS. New and used tabletop and floor model equipment are all available.

Mailing equipment is analogous to bindery equipment, requiring similar floor space and worker skills to operate. But if a printing company does not have enough volume to run the equipment daily, then subcontracting the work to an outside lettershop may be a better option. You’ll save floor space, worker training, and the cost of acquiring equipment. And as mail volume has fallen, lettershops may have excess capacity to fill, with the benefit of faster turnaround times and lower minimum charges.

Fixed Cost of Providing Mailing Services

An often overlooked cost of providing mailing services is the ongoing fees for permits and USPS compliance. Setting aside the initial cost, here is what you can expect annually:

• USPS permits: A $195 annual fee for permission to mail with permit imprint. A separate permit is required for each post office facility where mail is entered.
• CASS/DPV updates: Six-times-a-year updates of the USPS database of deliverable addresses; required to mail at discounted postage rates. Available through mail list management software vendors, fees begin at about $1,100 annually, depending on the vendor.
• Move update compliance: Comparison of customer mail list to USPS National Change of Address database; required to mail at discounted postage rates. Available from mail list management software vendors and other service providers. Fees are $1 per thousand records with a minimum (usually $40), or unlimited service for a year for a flat fee (starting at $1,100; some vendors combine this with CASS/DPV update service).

Other Considerations

Besides understanding the mechanics of mail list preparation and operating equipment, a mailing services provider owes customers a thorough knowledge of USPS requirements to qualify for discounted postage rates.

• CSRs need to guide customers through decisions that impact the effectiveness of the mail piece, from the target audience to the specification of the mail piece itself. They must understand how mail moves well enough to help customers decide what class of postage is most appropriate for the job. They must be able to manage customers so the mail list, PAF form, and postage deposit are received on schedule without either jeopardizing the requested mail date or creating a production emergency in the shop.
• Designers must know the physical characteristics of the categories of mail, the size and location of the mail panel, and where indicia can be placed.
• The production team needs to maintain the production schedule so the requested mail date is always met.
• The owner needs to stay current on changing postal regulations and requirements and adjust internal procedures accordingly. The owner must be prepared to take over from CSRs to calm upset customers for perceived lapses in shop performance or for problems caused by the USPS.

If you want to be a mailing services provider:

• Commit to maintaining the high standards of professionalism of those you are joining;
• Understand the resources – money, staff, and time – that are required to gain proficiency; and
• Consider seeking a partner rather than doing it yourself if that means you’ll provide better services to your customers.

Nancy DeDiemar is the president of Printing Resources of Southern California, a quick print shop in Upland, CA, offering printing, copying, electronic prepress, and mailing services. Nancy is the co-publisher of Printips (www.printips.com), a newsletter subscription service for printers. Contact her at [email protected].