Escaping the Black Hole of the USPS

The new date for general availability of the United States Postal Service’s new Intelligent Mail Barcode is May 1. The mandatory date for compliance is not until 2011. And although the USPS is driving this upgrade for its own performance and reporting purposes, it may make business sense to adopt the new barcode sooner rather than later.

Sometime next month, the USPS is expected to announce incentives for businesses to begin using the new barcode system. And by this fall, the new coding will be required in order to get the maximum discounts on postal rates. However, there are other advantages, said Kevin Conti, director of Communications Intelligence at Pitney Bowes Business Insight, the new name for the combined Pitney Bowes MapInfo / Pitney Bowes Group 1 Software business units announced today, January 28.

The barcode in use today, for the most part, provides a single bit of information about a piece of mail: the destination. The new barcode will provide much more data and will be traceable throughout the mail system. For businesses with high-volume mailings, especially those with return envelopes filled with checks, this data can be quite valuable.

“The typical telecom mail piece is of extraordinarily high value because it is key to getting paid and because it contains a lot of high-value information to the customer,” Conti said. And while telecoms and utilities have a relatively low unsuccessful mail rate (between 1 to 3 percent), they send a lot of mail and a big number of times a small number is still a big number.”

Returned mail is a $2 billion a year problem, Conti said. Six billion pieces of mail were discarded last year because they were undeliverable and 1.6 billion got the Elvis Presley treatment and were returned to sender.

To understand what business value there might be in the ability to track mail, Conti said service providers should ask themselves one question — and ask it of each department: If you knew where your mail piece was, both inbound and outbound, at any moment, what business problems would that solve?

Here are some answers he has heard from early adopters of the technology. Marketing groups can identify individuals and groups of individuals who did not receive promotional mailers and can resend or reach out in other ways. The legal team can protect the company against lawsuits for disconnects by debunking claims that mail was not received. Finance departments can predict cash flow by tracking payments through the mail. They also can waive late fees for people who mailed their bills on time, but were victims of slow mail delivery. Also, customer service representatives can be equipped with knowledge about both promotions and payment status.

Tracking payment also can help save service providers the cost and frustration of disconnecting a customer for nonpayment only to reconnect them a day later when the check arrives.

“If you’re looking at $25 to disconnect and you can reduce the number of disconnects by 15 percent, you could be looking at seven-digit savings,” Conti said.