My Two Cents on Offsetting Postal Rate Hikes


we have all had to come up with two extra cents to send a piece of mail. On a personal level, spending a couple pennies is not too much money for reliable mail delivery. However, this years 5.4 percent rate increase for U.S. Postal Service First-Class Mail greatly impacts those companies mailing invoices on a monthly basis as those few pennies now turn into a big budget expense.

The reality is mailers can expect to see higher postal rates next year as well. The congressional outcry for postal reform that generated the 2006 rate increase is likely to carry on for years. According to reports in the November 2005 issue of Mail Magazine, postal reform will leave an estimated $100 billion gap for the U.S. Postal Service to fill and postage dollars will be the filling.

To put this into perspective, if a company processes and mails 50,000 invoices per month, the postage costs alone will increase by $1,000 per month or $12,000 annually. So, what can a communications provider do to offset impending postage hikes?

Outsource Wisely.

Most service providers already know the value of outsourcing the billing process. Still, working with a bill presentment vendor will ensure maximum presort discounts and save a provider up to 10 cents per piece. The vendor should monitor the invoice production process and report any mail failing to qualify for discounts to the provider.

Scrub Those Databases.

The best way to secure maximum presort discounts is to have the most accurate database possible. In 2002, undeliverable mail cost the USPS more than $1 billion, and that number doubled for mailers who used undeliverable addresses. By cleansing the address database, providers limit their exposure to re-mailing invoices at a higher rate.

Go Electronic.

Electronic bill presentment and payment (EBPP) has not lived up entirely to its promise as adoption rates have remained below the anticipated 10 percent mark, according to Forrester Research. Use the postal increase as an opportunity to help drive adoption of EBPP. Signing customers up for EBPP solutions is a win-win proposition the provider saves money and the customer does as well.

Valuable Real Estate.

The invoice presents new opportunities for providers to defray the costs brought on by postal increases. Selling advertising space on the invoice or using a section to market products and services to existing customers actually can generate revenue. When it comes to balancing the expense of rising postage costs, providers should look to the invoice for help.

Ron Whaley, vice president of sales and marketing, OSG Billing Services, a provider of invoice presentment and distribution services focused on the communications industry.


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