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Thousands of SMEs overspend on mailing costs. By following simple, smart mailing practices, every small business can take the dollars off the envelope and onto the bottom line. Streamlining your mailstream can save both time and money.

With a slowing economy, consumer sentiment dropping and an uncertain year ahead, businesses are increasingly looking for ways to cut costs and ride out tough financial times. SMEs that have not looked to their postage costs and implemented smart mail practices are losing out on a potential pool of more than $3billion in savings, a figure that would go a long way to ensuring the future of many operations.

Opportunities to save on postage are often overlooked. Recently released figures demonstrate that the 3,500 SMEs that work with Pitney Bowes Australia’s solutions (with between one and 99 employees) to implement smart mail practices through using licensed postage meters and mailing solutions are saving, on average, $1,500 annually.

How postage discounts work
Australia Post offers discounts to customers that help them with their automation. Correctly addressed, barcoded and metered mail is handled with maximum speed and efficiency benefitting both Australia Post and the customer. The discounts offered are significant to any business, but particularly small businesses, where cashflow is crucial. The average cost saving across all postage discount breaks for small letters (up to 250g) for a business is 20.5 percent. For the 3,500 SMEs in the know, this adds up to almost $5.2 million annually.

These postal discounts offer a unique benefit to businesses – they are a viable cost-saving option for the sole operator right through to the largest enterprise. Implementing the systems and technology needed to gain the savings available to SMBs is quick, simple and affordable.

Initiatives include: consolidating mail processes, barcoding and validating addresses, using postage meters and reducing the size of envelopes or using standard business envelopes where possible. For the sole operator this would mean renting a postage meter, a small, standalone piece of equipment, not much larger than a desktop printer and automatically applying postage to your own mail. The monthly payments on renting an entry-level machine can be as low as $36 dollars and can be factored into a business plan, which greatly assists budgeting, forecasting and cashflow.

Pitney Bowes finances its own equipment directly so it is able to be far more flexible in the financing arrangements it makes. Paperwork is minimal and straightforward, completed quickly and with as much ease as possible.

Time and cost efficiencies

There are many other benefits to small businesses that implement smart practices. Metering your own mail saves time gathering up all the items to be mailed, getting to the post office, waiting in lines, and missing valuable calls enabling you to focus on your actual business. Metered mail can be simply posted in the local post box and looks more professional to the recipient, as you can incorporate your own logo into the stamp that is applied to the envelope.

Additionally, using a postage meter means that you will be kept abreast of any changes in mail rates and making sure that you are receiving the maximum discounts available. Meters are security protected with pin numbers and spending can be tracked to individuals or departments enabling you to keep track of your postage expenses.

Benefits of direct mail

Mail is an important part of how companies market their services to customers and is a proven part of their overall communications strategy. Australian business is increasingly realising the benefits of employing direct mail, in tandem with electronic messaging technologies, to improve the effectiveness of its customer communications. In 2007/2008, Australia Post recorded a 9.4 percent increase in the volume of direct mail it delivered.

When talking about direct mail, it is important to clarify that we are talking about mail that is addressed to an individual and is relevant to the recipient. Australian pharmacy brand Amcal recently celebrated the second anniversary of its customer loyalty program, Amcal Club. In a recent direct mail campaign targeting 200,000 loyalty club members, Amcal pharmacies recorded an increase in sales of 36 percent that can be directly attributed to those members mailed during the promotion. Amcal stated that outside mainstream media, direct mail is certainly the quickest way to reach its consumers.

According to Australian Direct Marketing Association (ADMA) research, 89 percent of people who receive personally addressed mail actually read it. This presents a strong case when you consider that opening an item of mail is only the beginning of the interaction between that form of communication and the recipient.

Recent independent Australia Post-sponsored research revealed personalised mail was still the most preferred way of receiving communication from businesses with which customers had an existing relationship. Mail is still the only medium companies can use to interact with all five senses, and is one of the only ways marketers can physically interact with the market. Mail can be very powerful when managed in a strategic way.

Postage discounts and smart mail practices are not something only accessible by large businesses. A sole operator working from a spare room right through to a larger business are equally able to access savings and improve the appearance, function and effectiveness of their business communications through very simple steps. Smart mail practices do not cost a small fortune to set up, are straightforward and easy to implement and run, and are completely flexible and accountable.

Streamline your mailstream

1. Consolidate your mail processes
By consolidating the mail you send each day and sending it out in batches, businesses can access mail privileges from Australia Post and reduce the cost of their postage. If you have 300 letters to send out, do it at the same time, and achieve discounts though Australia Post.

2. Barcode all mail and validate addresses

By barcoding and validating their mail, companies can access mailing discounts and minimise their returned mail, which costs businesses approximately $2 per returned mail item.

3. Use small envelopes where possible
Postage rates are based on both weight and size. By simply folding a piece of A4 paper so it fits into a standard size envelope instead of an A4 envelope, you can halve your postage costs.

4. Maximize use of envelope weight allowances

Businesses can reduce the overall cost of their mail by making sure the contents of their letters are weight sensitive. By simply printing a document double-sided, as opposed to using single sheets, you can save money.

5. Maximize the contents of your envelope
Try to combine information and maximise your 250g basic rate weight allowance. If you have two messages that can be combined and sent in one envelope, instead of two independent processes, you will halve your cost.

6. Deploy postage meters in your business
Sending mail through postage meters is an easy way to access the savings on offer from Australia Post. A postage meter is a device that processes your mail, weighing it and applying the postage cost automatically.

7. Use all of the above
All of the suggestions above can save a business money, but combined they can dramatically reduce postal costs and put money back in the pocket of businesses and increase the effectively manage communication costs.

Why do I need a Postage Meter?

Avoid the hassle of going to the post pffice. Having a meter means postage is available 24/7.

Save Money on Postage
Meters and scales tell you exactly how much postage you need for any type of mailing. Never waste money by over-stamping.

Be More Productive
Spend time doing more important things for your business like preparing invoices and finishing payroll instead of driving to the post office for stamps.

Postage Tailored to Your Needs
With several postage meter and scale options, you have the solution that’s right for your business based on the amount of mail you send.

Flexible, Trackable

Several employees or different areas of your business can use the same meter but you can track the postage expense by person or department.

Be in the know on rate changes and discounts

We’ll notify you of rate changes, discounts and new postal regulations. Your meter can download the new rates in minutes.

Make sure the customer gets your message
Barcoding your mail is an important part of any mail-out campaign, and is advantageous to a company on three levels.

First up it allows you to gain access to some of the postal discounts already mentioned. By barcoding your mail you will gain extra discounts which, on a mail-out of 300 or more pieces, brings significant savings.
On top of this, barcoding guarantees that the address your mail is being sent to exists. Mail that fails to get to the recipient due to an incorrect address costs a business around $2 per returned letter. This includes the cost of the envelope and paper that has been used; the time spent writing, printing and inserting the message; and or course the cost of the original postage to the erroneous address.

But arguably the most costly part of your letter not reaching the recipient is the loss of the opportunity to reach out and get your message to the customer.

In the time of a global financial crisis the first rule is to keep hold of your current customers. Make sure you do not lose them simply because your message didn’t make it to their letterbox.

-Michelle Sheehan is Strategic Alliance Director for Pitney Bowes Australia (www.pitneybowes.com.au). Pitney Bowes, which patented the first postage machine in 1902, is a mailstream technology company that helps organisations manage the flow of information, mail, documents and packages.

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Michelle Sheehan

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