Do you know the finished cost of an individual mail piece produced by your organization?
Not many organizations do. This is understandable given how many costs go into producing a piece of mail, from paper and printing, to labor and equipment, to postage.
On top of these basic costs, there are also many “hidden costs” that can drive up your expenditures on mail production. Understanding these costs is essential for any organization looking to reduce their mailing spend.
So what are these hidden costs and how can you save on them?
Manual labor is a big one, accounting for 10-15% of the finished cost of a mail piece. The challenge with manual labor is that it is highly variable and difficult to apportion, making it hard to know where to look for savings. Any process that can be automated offers a chance to achieve greater cost certainty and greater savings.
The USPS is in the process of implementing sweeping changes to their rates and service levels, all of which have the potential to drive up your mailing costs. In some cases, the actual postage costs have gone up, leading to a direct increase in the cost of a finished piece. Less obvious increases stem from the closure of processing facilities, which have the potential to increase indirect costs, like transportation, since many will have to transport (i.e. truck) their mail further away, to have it processed. Understanding the full impact of the USPS changes on your mailing operation is essential to avoiding increased mail costs.
A host of hidden costs creep in when you lack proper visibility into your mailing operations. These may include: overpaying for proof of mailing services, overpaying for customer service calls to find out the status of mail pieces, reprints or re-mailing of items when you aren’t sure they were sent, and finally, failing to meet customer SLAs. Mail tracking technologies can come to the rescue here, providing firm answers and insights into inefficient processes.
Uncovering hidden mailing costs may take some time, and yet it is essential for cost reduction: if you can’t see it, you can’t save it!