spite of this, about once a year we have a customer seriously consider bringing
the bill printing and mailing process back in-house, ostensibly to save money.
Is it really cheaper to mail bills ourselves?
all factors are considered – CASS certification software
and ongoing maintenance, paper stock and toner or ink to print the bills, the
time involved in printing, bursting, folding, inserting, and packaging bills
for the Postal Service – I don’t believe it’s any cheaper to print your own bills
addition, many outsource printers combine all their mail for the day – yours
and any other utilities or businesses they may be mailing that day – to
maximize the postage discount. Postal discounts are based on the number of
pieces of mail being sent to the same 5-digit ZIP code, then to the 3-digit ZIP
prefix, if there aren’t enough pieces to qualify for the 5-digit ZIP discount.
For example, Raleigh’s
3-digit prefix is 276. You may have a few pieces being mailed to ZIP codes
starting with 276, but not enough pieces to qualify for a discount. If the
outsource company has mail from other mailers going to the Raleigh 276 prefix,
they are able to combine yours with the other mail to qualify for a better
discount. This simply isn’t an option if you are mailing your own bills, even
if you are using CASS certification software.
A little known fact
outsource printers have a postal service employee on-site to inspect outgoing
mail and insure that all USPS policies are being followed. In cases such as
this, mail from the outsource printer enters the mailstream directly without first
going to a regional facility.
This isn’t the case when
you mail your own bills. You must take your packaged mail to the local post
office. From there it most likely is sent to a regional facility for sorting
before it enters the mailstream. This generally adds at least a day to the time
it takes your customer to receive their utility bill in the mail.
Want to really save money?
As discussed in the last issue, a way
to offset the cost of mailing bills is to offer ebilling and encourage your customers to request ebills
rather than receiving a paper bill in the mail. For each customer who opts in
to ebilling, you save not only the cost of postage associated with mailing
their bill, but also the cost of the paper stock and envelopes.
To encourage ebilling, some
utilities offer incentives such as a one-time or monthly recurring credits on
the customer’s account.
Are you trying to decide
if you should move to outsourcing (or continue to outsource if you’re already
doing so)? If so, please give me a call at 919-232-2320 or e-mail me at email@example.com
to learn how a business review
could help inform your decision-making process.
I recently saw a listserv post inquiring about the pros and cons of moving from postcards to full page bills, as well as asking about the costs associated with making the switch. In the same vein, I know we have customers who have resisted transitioning from postcards to full-page bills due to the increased costs, primarily postage.
Postal rate increase
postage rate increase went into effect on January 27. You can see these new
rates here. Using these new rates, let’s
examine the difference in postage between postcards and full-page bills.
If you use an outsource printer,
they will perform the CASS certification and
presorting to qualify for the best possible discount. Under the new price
structure, automated presorted mail sorted to the 5-digit ZIP code now costs
$.383 per piece. This would include the majority of your bills that are mailed
to local addresses. Bills mailed to out-of-town addresses will be slightly
more, depending on how many are mailed to the same 3-digit ZIP prefix.
best rate for a postcard is $.257 per piece, but you have to be using CASS
certification software to be eligible for this rate. If you are just presorting
by ZIP code, without using CASS certification software, the rate is $.28 per
postcard. And if you’re not presorting at all, you’re paying the full rate of
$.35 per postcard.
For purposes of this illustration, let’s assume
your software prints postcard bills in ZIP code sequence and that’s the only presorting
you’re doing. Here is the comparison between postcards and first class postage:
Difference in price alone
The above illustration shows nearly a 27% increase in postage cost for switching from postcards to full-page bills. What this doesn’t take into account is the intangible benefit of being able to present more information on a full-page bill and being able to include a return envelope.
Most outsource printers include a window return envelope which allows your return address, with barcode, to show through the window. If your customer mails their payment, the inclusion of a bar-coded return address speeds the processing through the postal sorting facility over a hand-addressed envelope that must have a barcode manually applied.
In addition to the
intangibles, using an outsource printer results in very tangible labor savings
in your office. Your staff no longer needs to attend to a printer printing
bills or prepare the bills for mailing. This is all handled by the outsource
Another way to offset the
increased cost of first-class postage is to offer ebilling and encourage your
customers to request ebills rather than receiving a paper bill in the mail. For
each customer who opts in to ebilling, you save not only the cost of postage associated
with mailing their bill, but also the cost of the paper stock and envelopes.
If you can convince 27% of
your customer base to opt-in to ebilling, the switch from postcards to
full-page bills will result in no additional cost! Depending on the
demographics of your customer base, this percentage is not unreasonable.
Need help deciding?
Are you trying to decide if
moving to full-page bills or outsourcing your bill printing would be cost
effective for your utility? If so, please give me a call at 919-232-2320 or
e-mail me at firstname.lastname@example.org to learn how a business review could help inform your decision-making process.
From time to time, I get questions about how the ZIP+4 and DPC (Delivery Point Code, previously known as Delivery Point Barcode, or DPBC) are assigned.
A previous Utility Information Pipeline addressed (no pun intended!) mailing address quality. That issue described how to look up a ZIP+4 and the corresponding Delivery Point Code, but it didn’t describe them. An earlier issue explaining Intelligent Mail Barcodes touched briefly on how they are assigned, but didn’t go into great detail.
What does a ZIP+4 represent?
Here is an illustration using a map of a random street in Raleigh (chosen simply because it is laid out in a traditional block, not with curved streets and cul-de-sacs, like many neighborhoods):
Frank Street is in Raleigh ZIP code 27604.
For residential addresses, the ZIP+4 represents the odd or even side of a block. In this example, the ZIP+4 is 27604-2017 for odd side of the 500 block of Frank Street and 27604-2018 for the even side of the block.
What does the DPC represent?
As you can see from the map, mail sorted to the ZIP+4 includes multiple addresses. For example 27604-2017 includes the odd numbered addresses from 501 Frank Street through 511 Frank Street.
To improve upon this, the US Postal Service introduced the DPC which, when appended to the ZIP+4, creates a unique 11 digit number for every residential address. The DPC is the last two digits of the street number (or the post office box for PO Box addresses). Thus, 501 Frank Street becomes 27604-2017-01 and 503 Frank Street becomes 27604-2017-03, creating a unique numbering scheme for every address.
I’ve actually done a data matching project for a customer using this. We linked county tax information to their utility billing database using the 11 digit ZIP+4 and DPC as the initial link between addresses in the disparate systems.
Sometimes, when doing a sales presentation, I will ask if a utility prints payment barcodes on their bills. On more than a few occasions, I’ve had people confuse the postal barcode with a payment barcode.
What are the differences between the two? Let’s take a look…
Postal barcodes are the most common barcode found on utility bills. These barcodes, known as Intelligent Mail barcodes (IMb), are used by the Postal Service for sorting mail using high speed optical scanners. In order to receive any type of postal discount for your mailings, you must print the IMb on your mailpiece.
Placement of the IMb depends on the type of bills you print. For post card bills, the IMb can print either print immediately above or below the address block or in the lower right corner of the bill. If you print full page bills, either in-house or using an outsource printer, the IMb will print immediately above or below the address block, so it shows through the window envelope.
An IMb barcode is composed of four distinct symbols (tracking region only, ascending, descending and both ascending and descending) and looks like this:
Payment barcodes are used to expedite the process of entering payments. These barcodes generally encode at least the customer’s account number and amount due.
When entering payments in a system configured for processing barcodes, the user merely scans the barcode rather than keying in the customer’s account number. This can be used by cashiers handling walk-in payments or by a customer service representative entering mail payments in batches.
Payment barcodes generally look more like a traditional barcode (not unlike the UPC barcode used by most grocery stores) composed of narrow and wide bars of uniform height. Here is an example of a payment barcode:
If you have questions about printing bills, processing payments or any other part of your office operation, please give me a call at 919-232-2320 or e-mail me at email@example.com to learn how a business review could help your utility.
The TTWWADI syndrome isn’t found only in the failure to take advantage of new technologies. Often, antiquated ways of doing things become institutionalized in organizations to the point they are never questioned.
Sometimes, doing things the same way for years makes sense. But other times, when we stop to think about it, many practices – especially informal processes that have developed over time – no longer serve a useful purpose.
In forward thinking organizations, questioning why things are done a certain way isn’t chastised, it’s welcomed!
In forward thinking organizations, questioning why things are done a certain way isn’t chastised, it’s welcomed! If you do something a particular way with no real reason for continuing to do it that way, it behooves you to question why you’re still doing it.
Many times, those closest to a process are oblivious to how redundant or useless it has become. A knowledgeable, objective outsider observing and asking why things are done a particular way can lead to constructive discussions and improvements in how things are done.
Is it time to consider a business review?
Do you ever wonder if your office could be run more efficiently? Or would you just like confirmation that you’re doing things the right way?
Being somewhat nostalgic, it’s only natural, as we bid 2013 farewell, to look back at the year…
This issue marks the third anniversary of the Utility Information Pipeline. Readership continues to increase, by nearly 12% this year, as it surpassed 300 subscribers.
If you have co-workers or colleagues from other utilities who you feel would enjoy reading this newsletter, please take a minute and forward this to them.
And, on August 9 of this year, by blog reached a milestone with the 10,000th hit!
If you haven’t checked out my blog recently, I encourage you to do so. Each Utility Information Pipeline newsletter article is also posted to my blog as an archive. So if you’ve deleted an old newsletter e-mail that you wish you still had, try searching for it on my blog.
Most popular blog posts
For the second year in a row, convenience fees was the most popular blog post topic. This year, it was by a margin of more than two to one over the next most popular post. Here are the five most popular blog posts in terms of page views in 2013:
It wouldn’t be the New Year without something to look forward to! For 2014, I’m planning to conduct an update to the Utility Fee Survey that was originally published in 2012.
I’m also contemplating a makeover to my blog, so be sure to check back to see if I’ve decided to get creative and try something new!
After three years, topics to write about aren’t as easy to come up with as they were when I first started! If you have an idea or suggestion of a topic that you would like to learn more about, please give me a call at 919-232-2320 or e-mail me at firstname.lastname@example.org.
Happy New Year!
Wishing you and yours all the best for a healthy, happy, prosperous 2014!
I am the Senior Consultant with Edmunds GovTech | Logics in Raleigh, North Carolina. I have over 35 years experience developing and implementing utility billing and financial software and consulting with utilities and municipalities. My bi-weekly email newsletter draws from my experience in working with over 200 utilities and local governments to offer insight into how utilities can improve operations and better serve their customers. If you have a comment or a suggestion for a future email, please contact me by calling 919-673-4050 or sending an email to email@example.com