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Every few years, it is important to reevaluate all high-value cost contributors and see if there are opportunities for savings and/or performance improvement.
Sometimes, this is dictated by corporate policy or if there is a compelling event forcing a decision. The following three scenarios are not uncommon and all require analysis and action, even if the action is to do nothing different.
1. Need for cost reduction/control
Management insists that 2017 costs for client communications remain flat or go down. They've been a little spoiled by the two-cent decrease in postage, and the e-delivery adoption rate has not been bad, but your boss is forecasting an increase in the number of customers (i.e., monthly mailings). You cannot rely on more than a one to three percent growth in e-delivery adoption without adding a new delivery channel (like PUSH and mobile, to name two), and postage will certainly rise again.
2. Equipment is failing or leases are coming due
Printers, mailing machines, and folder/inserters are breaking down too often or the leases are coming due. Normally, you would buy out the equipment or replace it with new gear. However, in the back of your mind, you have to wonder if this is the right decision. Hard copy mail volume is certainly not going to grow much ever again (if management had their way, it would go away entirely), and the equipment must be serviced and staffed and service-level agreements (SLAs) must be met—all this with a challenging cost target.
3. New and improved documents are being requested
Business people are looking for significant upgrades to the documents being mailed. A new layout, forms with rules integration, and adding marketing messages with color are not uncommon requests. All of these are important for the business, but you are constrained by the lack of access to the necessary information technology (IT) resources or the budget to purchase software or equipment that is required.
For any, or all, of these reasons, now might be the time to do a “make versus buy” analysis of your print/mail operation. Outsourcing print and mail is an excellent alternative to doing all of the work in-house, especially for high-volume and/or complex jobs.
There are many top print/mail outsourcing companies out there, and I personally work with several. They are hungry for work, maintain exacting SLAs, and have the flexibility to make changes when necessary. When you fully allocate the true cost to maintain the print/mail function in-house and compare it with the costs from companies that do this for a living, it is not uncommon to extract 10% to 20% savings from non-postage costs, with materials and warehousing cost savings alone of 10% not being unusual. Plus, through better sorting, you may even save money on postage as well.
While 10% to 20% savings does not compare to the 60%-plus savings, which can be achieved when replacing paper with e-delivery, every bit helps.
Richard Rosen is the Chief Executive Officer of The RH Rosen Group. The RH Rosen Group works with clients to reduce costs and improve cash flow through paper reduction and process improvements. Contact him at RichR@RHRosenGroup.com.
