For midsized and smaller print enterprises looking to offer new inhouse added-value services to their clients, mailing and inserting offers a good opportunity. In fact, low to mid-volume direct mail has emerged into its moment in the sun.
Unaddressed (junk) mail volumes are shrinking, and electronic solutions leave gaps in the communications formula. Email, once seen as a disruptive factor in marketing, has faded, as inboxes bulge with unsolicited content clamouring for readers’ attention. While still a useful tool in the marketer’s armoury, email – or for that matter the newer social media – are no longer seen as miracle fixes. All the while, printed mail has shown a surprising endurance.
While specialist mailing houses have hitched their mega-volume runs to the newest inkjet lines, a dynamic niche has opened up for commercial SMEs with sheetfed digital presses, which are seeking to add a new revenue stream with mailing.
Printers already have the customers, the skill level to operate mail and inserting systems is not high, the investment cost, at least to get started, is not high, and for the customer it means one less supplier to deal with, cutting back office costs and times, and creating production efficiencies, as the inserts are not moved from the printer to the mail house.
So what equipment is needed? What is the best way to sell it to customers? What does Australia Post require?
Add value, says Pitney Bowes
Adding mail finishing capabilities to your commercial printing capabilities can change your business for the better, says Stephen Darracott, country manager of mail technology specialist Pitney Bowes Australia & New Zealand. He says, “It is not only a source of new revenue that complements your existing capabilities and resources– it also helps drive greater profit margins. It is a powerful strategy to fend off competitors and differentiate what you can offer clients.
“By broadening service offerings including mailing, you attract different clientele that initially are looking for mailing services with value-added printing solutions. Our clients say it increases sales and improves return on investment while insulating your business against market fluctuations. Our clients transform print jobs into full end-to-end services that lead to added business from new and existing customers looking to streamline operations and reduce manpower costs”
But what are the practicalities of getting started? Darracott says many printers find that a folding and inserting machine and an envelope printer is a small investment which can create large returns, and which allows printers to take larger projects from printing through mailing.
“Having a folding and inserting system can open new streams of revenue by offering customers an end-to-end solution. Custom-printed envelopes can improve rates significantly over plain white paper envelopes. The ability to offer a more complete solution can create a lot of opportunity and open your doors to new customers too,” he says.
What equipment is needed? “Before buying equipment, printers should take stock of the clients that ask them to print mailers and then handle the mailing internally or through another vendor,” advises Darracott. “By understanding the services you offer, you can present an outstanding standard that you deliver to the market. By being proactive and stipulating your best-of-breed services, you can attract clients and reduce your pre-sales costs.”
And how best to sell yourself to your customers as the print house that also does mailing? “Commercial printers are all about efficiency and productivity,” observes Darracott. “They look for scalable, flexible solutions that can grow with their business and offer additional value. The solutions that Pitney Bowes offers give them confidence to venture into new markets, increase their workload and client base and drive new revenue.”
Pitney Bowes has solutions that offer critical components to expanding into mailing and inserting operations—optical mark recognition, 2D barcode printing, document composition, direct mail services, labelling and addressing, mail insertion and packaging services, return logistics and response fulfilment..
Pitney Bowes offerings for commercial print businesses include the new generation of digital postal meters, which enables printers to offer on-demand envelope printing, which further sharpens a targeted campaign, explains Darracott.
The OfficeRight Folder DF800 can fold a wide range of paper weights and sizes. With seven fold options, there is the flexibility to impress all customers and potential customers.
For low- to mid-volume mailers, there are the Relay folder inserters with direct scan. And the Pulse inserting system is designed to deliver increased operational efficiency, greater flexibility and reduced cost, particularly through its automated setup.
Australia Post’s requirements are a vital consideration for cost-effective printing/mailing. Says Darracott: “Australia Post makes it easy to handle bulk mailing when you have 300 pieces of mail or more. Customers need to familiarise themselves with the services that Australia Post offers by reading about their services online or asking a supplier about the discounts provided through bulk mailing and mail meters.”
Become an end-to-end provider, advises Neopost
Mail specialist Neopost Australia offers a range of equipment suitable for a commercial printer from low-end, free-standing machines built to produce up to 200,000 envelopes per month to full production systems capable of outputting up to 12,000 envelopes per hour and processing DL or C4 from the same input stream.
Neopost’s DS-200 production inserter can process up to 4,800 envelopes per hour. And the high loading capacity of the DS-200 means work can be fed through at the machine’s high speed. The system design reduces downtime, enabling parallel work on other tasks, enhancing productivity.
The Neopost A-710 address printer can overprint up to 14,000 envelopes per hour, eliminating the need for labels, while an optional stacker and additional drop tray speed up larger mail runs.
Neopost Australia’s communications expert Symon Cook says commercial printers can take advantage of adding mailing services to access a ready customer base, leverage skill levels that are already in place (as it is another paper process). They can gain control of the entire mailing job – not just printing and sending on — they can secure a customer by providing a one-stop shop, and they can reduce management for the end customer. And it also removes the risk of losing a customer because another party did not meet deadlines.
But Cook says getting started requires planning and education. Customers will expect a significant level of knowledge on postage and how they can maximise postage savings. He says, “It is also possible to get a little too eager to want to take on every job after making an investment. This can prove challenging as not all jobs can be processed on all machines.
“Make sure you understand the type of work you want to process – marketing (growing) or transactional (reducing) — and acquire equipment suited to the widest range of applications – DL to C4 is usually going to help you maximise your potential opportunity,” says Cook.
Printing on demand means there is no need to hold stocks of overprinted envelopes, and correctly formatted addresses can help qualify for volume postal discounts. It all adds up to an ability to manage direct marketing and customer communications in-house.
Document wizardry from Absolute Electronics
Grish Rewal, director of Absolute Electronics, is excited about the potential behind small-to-medium scale print enterprises that print digitally and offer VDP into the deal. Mailing services are a natural extension of this mix.
The company offers Peppermill PPML document processing software for VDP work. The desktop application provides an easy entry point for getting started in personalised digital printing, whilst offering powerful features not found in other variable-data applications. With the option to write to PPML or PS which may also be rendered to PDF, Peppermill overcomes previous prohibitive RIP bottlenecks for high resolution graphic jobs.
Peppermill software was initially used in the K515 EasyMailer system from German technology developer Kern AG which Absolute Electronics was offering for some years, but the Australian vendor’s focus has more recently shifted to labels and packaging applications. (The EasyMailer produces VDP direct-mail pieces from digitally printed sheets, with a fully personalised envelope and matching letter generated from A3 or A4 sheets automatically).
“Adding a variable-data offering for their existing customers increases their value-add and offer a service that the customer may already be outsourcing,” says Rewal. “The investment costs are not very onerous as there are a lot of good refurbished mailing systems on the market.”
He says the main challenge is to have an IT specialist on board, who can understand the customer’s data and their requirements. As to the kit, a folder inserter, scales and other small pieces of equipment will be required.
“Where existing relationships are in place, it would be a value-add, as the printer could be a one-stop shop for their customer’s printing requirements and it also builds on the IP the printer has for that customer as they may already be printing the blank forms and other stationery,” he says.
CASE STUDY: Good mail from MBE Group
When WA businessman Clayton Treloar bought into the Perth CBD franchise of Mail Boxes Etc (MBE) in 2013, he decided to expand its offerings by providing a direct-marketing print-and-mail service to his clients.
The following year, Treloar handed the day-to-day business of MBE Perth CBD to manager Morgan Oliver and has moved into a corporate role with the national MBE group in Australia.
MBE Worldwide, based in Milan, Italy, began in the US in the mid-1980s, with North American MBE since acquired by UPS, and there are over 1600 MBEs worldwide today.
As CEO of MBE’s 25-year-old Australian operations, which comprise 34 franchises in all states and territories except Tasmania and the Northern Territory, Treloar is overseeing the transition of franchises to include personalised direct-mail printing and mailing, with a majority in the group now able to offer this service, and the NSW franchises leading the march into direct mail.
In his own MBE franchise in Perth, he had been increasingly outsourcing mailing, and identified an opportunity to offer it as part of the service to his customers.
Direct mail offers a vital additional revenue stream to MBE franchises and works optimally in the short-to-medium run bracket, which Treloar estimates at between 5,000 and 20,000. Either side of that, the ‘kitchen table’ jobs, or the mega-runs, are not his prime targets, he says, although some volume mails are still outsourced. (MBE has WA electricity and gas utility, Synergy, as a print-and-mail client).
Customers at the Perth franchise are typically retailers, real estate agencies, and small businesses. A Perth fashion retailer even secured sponsorship for its direct-mail campaign to defray costs and sent out 7,000 letters to its current database.
Treloar sees direct mail as an effective fit with commercial printing. A Pitney Bowes DI380 folder/inserter and Pitney Bowes envelope printer at MBE Perth CBD represent an investment of around $30,000 each, so capital equipment is relatively inexpensive, says Treloar, and with no outgoings like ink, paper and consumables, he says ”there is good margin in it”.
MBE Perth CBD generates its variable-data print (VDP) on a Fuji Xerox J75 production printer, with output then fed into the DI380 folder/inserter, which folds, stuffs and seals envelopes.
The DI380 is an effective solution for any mid-sized mailroom that requires higher speeds or has occasional large mailings. Maximum throughput is achieved with options such as reload on the fly, advanced Optical Mark Recognition (OMR) so customers receive the correct documents, and 20 programmable jobs. Running at a speed of 3,500 pieces per hour and capable of handling up to 30,000 pieces per month, the DI380 saves time and money.
Printing of envelopes on the Pitney Bowes envelope printer includes insertion into DL window envelopes. MBE Perth CBD purchased the unit about three years ago, but now vendors such as Canon and Konica Minolta include envelope printing in their digital production printers, Treloar points out.
Artwork for direct mail campaigns is prepared inhouse by MBE’s graphic designers, and InDesign’s mailmerge component means there is no outlay on IT personnel.
MBE offers its clients direct mail services that include printing, folding, collating, labelling, tabbing, stuffing, sealing and addressing, as well as lodgement with Australia Post at cost-effective postage rates. MBE also helps customers obtain targeted mailing lists and “cleans” their existing lists to make every potential customer a ‘direct hit’.
Users of MBE Perth CBD’s print-mail services are a mix of existing clients and new customers who have been attracted to the company on the strength of mail services, often making inquiries after seeing MBE’s promotions for its mail service, which are mail campaigns in themselves. These promotions target groups such as lawyers, accountants, real estate agents, training companies and TAFEs.
“AT MBE Perth CBD, we have used direct mail to promote our own products too,” says Treloar, “such as when we have a sale on pull-up banners or on our wide-format printing, which jumped through the roof last quarter after a local mail promotion”.
Treloar is well aware of the advantages of targeted mail over unaddressed mail. While targeted mail has a significantly higher unit cost, the response rates are in multiples of those achievable with unaddressed mail, as high as 15-20 per cent, compared to 1-2 per cent for unaddressed. So, it is well worth the investment by clients, he explains.
And the fact that the collateral is printed, finished and mailed from the same point, saves clients a lot of time and money in not having a separate mail house handle the mailing.
Direct mail from MBE is mostly B2B, with some B2C campaigns. Around 80 per cent of jobs use basic mailmerge personalisation of the Dear [Name] type, however the company also does more sophisticated variable-data components, based on client and market information in its databases, says Treloar.
The Perth CBD branch also operates as a hub for MBE franchises in Greater Perth that do not have the Pitney Bowes equipment, says Treloar.
Meanwhile, at MBE Parramatta, owner Charles Batt was inspired to branch out into mailing after attending an MBE franchisees’ seminar where a Queensland franchisee in the group reported a dramatic uptick in business from adding a mailing service to print.
After trying some basic envelope inserting/folding with a smaller machine, the Parramatta business installed a Pitney Bowes DI880 folder/inserter four years ago. It has enabled the company to service the mailing requirements of additional customers, while adding new customers who are interested in a comprehensive printing and mailing solution.
The DI880 handles basic single-pass DL folding through to complex tasks. A Pitney Bowes DP40s envelope printer and barcoding software round out the package. While the DP40s is no longer available, Pitney Bowes currently offers other inkjet envelope printing solutions.
Printing is done on a Xerox 1000, with quite a few jobs including a VDP component, says Batt.
The ten-year-old business, with six staff, found it relatively straightforward to pick up the skills required to operate the folder/inserter and envelope printer.
“For jobs of around 10-30,000 impressions, we do them here, while jobs that are around 100,000 are outsourced, “ Batt tells ProPrint, “but the key point is that we are able to attract customers because we have the ability to do their smaller mail jobs inhouse, and then we may also get their higher-volume works.”
CASE STUDY: Dashing sees boost
Sydney print provider Dashing Print has seen a major increase in activity after installing Neopost mailing technology. COO Paul Wilcockson says a DS-200 production inserter has enhanced the company’s existing mailing operation by enabling it to offer fulfilment on its VDP content. This is particularly important, as the volumes of unaddressed mail decrease and clients seek more targeted direct-mail campaigns.
Dashing Print has been in business for nearly 30 years, and specialises in complete solutions for, among others, the retail and franchise sectors.
Director Chad Jankz told ProPrint that the company had installed a high-end fulfilment machine from Neopost to drive fulfilment as another service.
“We had always been into mailing but it was more the variable data area and being able to use specialised pieces that differentiated us from some other companies in the market,” he said. “While we don’t do a huge volume of letter drops we’ve always done addressed mail and also a lot of variable data mail matching and specialised pieces.
“We’ve always had Neopost machines, and they guided us over the past few years through their smaller, medium and larger machines.”
Jankz suggested that mail needs to be adapted to suit the occasion and the customer. It still has a strong role to play in the communications mix.
“People aren’t sending as many pieces, so that’s why you’ve got to have specialty pieces that you can cross-market with online and other media, so it’s not just a written letter. It needs to be something that catches their eye and makes them respond to it. People don’t send as many pieces now but they spend more on each piece,’” he says.
Dashing Print’s strategy has always been to augment its digital expertise with added value services to improve the customer experience.
“Mailing’s never been our core business; it’s an add-on to everything else we do,” Jankz points out. “While it’s had its ups and downs it’s always steady over the year, and it’s a valuable add-on to customers. Some clients do large formats to brochures, and we deal with a lot more variable data using XMPie, and with that we’ve been able to grow that part of the business.
“We’ve never been statement and invoice driven — our strength is direct marketing, and that’s a different market.”
CASE STUDY: Mailing adds value
Flagstaff Print and Mail in Unanderra, NSW, south west of Wollongong, is a not-for-profit Disability Enterprise employing over 275 people with disabilities in more than seven diverse business divisions. One of these core businesses is the Print and Mail division, whose mailing and insertion facility provides great opportunities.
The organisation has had a mail house within its commercial printery for over 12 years and has found this to be a key differentiator for other print-and-mail services, explains Karen Burdett, Flagstaff’s group sales & marketing communications manager, in describing the complementary aspect of print-and-mail to the services of offset and digital printing and finishing the organisation provides for multiple clients across Australia.
“Our employees are actively involved in various facets of the Print and Mail division in mailing, insertion and finishing,” Burdett tells ProPrint. “Flagstaff employees assist with the mail house component of the business, with manual insertion where required, and with sealing and wrapping of mail-based products. They are also actively involved in the collating of mail-based packages for a range of customers who outsource their mail house function to us.”
Burdett lists the essential technology to add and integrate print-and-mail into the production process: Data composition and processing tools, such as XMPie, Vi, and Paris; digital printers with VDP, in the form of a Xerox Colorpress 800 and Nuvera 288; and an inserting machine, a Pitney Bowes Relay 8000. “The capital that Flagstaff has invested in allows our business to offer wide a varied solutions to our customers on multiple platforms.”
Selling mail services to customers has been a strategy of showing these clients what a mail operation from under the same roof as the printer can do for them, she says. “Whilst mail has declined over the years due to the cost of postage increasing significantly, a market still exists for customers that want to attract the attention for certain customers or prospective groups, and the benefit of providing tailored direct mail pieces — all inhouse — is a great selling tool for customers large and small that want to have impact.
“Promoting the benefits of one company managing the end-to-end process of a mailout is also attractive to clients who feel confident in having one provider manage the end-to-end solution,” says Burdett. “We also highlight the benefit of 100 per cent accuracy that comes as a result of using these types of intelligent insertion equipment which provides peace of mind to customers, particularly in preventing privacy issues.”
CASE STUDY: Mailing adds value
At Kwik Kopy Bondi Junction, a Neopost DS folder/inserter is versatile enough to enable fulfilment of various formats, for example, window-face and non-window-face envelopers, explains managing director Emmanuel Constantinou. The upshot is that new and existing customers are bringing more of their work to the business.
Maintaining a policy of accuracy and quality in mailing has seen Kwik Copy Print and Design in Bondi Junction become one of the nation’s top Kwik Kopy franchises.
Six years ago, the company installed a DS folder inserter (fulfilment machine) from Neopost Australia. Emmanuel Constantinou, says, “The technology is quite streamlined. We fulfil hundreds of mailers and the Neopost folder inserter’s versatility means that we can complete a variety of work, for example, window face or non-window face envelopes. The machine’s various capabilities allow us to offer a wider range of fulfilment and print services to our customers, thus allowing us to increase the range of service we offer, ultimately resulting in more work coming through the store.
More recently, the company bought the Neopost AS710 address printing machine that can overprint onto 14,000 envelopes in an hour. He says, “It also offers variable data printing, which allows us to personalise the mail. That makes it a valuable asset because it helps ensure our customers get the best price/postal discounts from Australia Post. Data hygiene and clean mail ensures my customers access a range of postal discounts, as a result of clean mail addressing using the Neopost Address Printer.
“Many of my customers invest in personalised direct mail because nowadays, unaddressed mail is often perceived as junk mail. People are more likely to open a letter that they perceive is more personalised. That is why we see variable data printing increasing.
“Investing in the Neopost technology has definitely lifted our profile in the market place. We take care of a lot of corporate clients who need to know that we can do the work professionally and with a guarantee. We can now service more of the market. Before getting the AS710 address printer, we used to outsource. Keeping it in house means we can control the quality and increase our margin. And now that we have automated fulfilment, we have increased the efficiencies of our workforce.
WHAT DOES AUSTRALIA POST REQUIRE?
An essential component of commercial print businesses making a dynamic entry into mailing is to understand the ins and outs of working with Australia Post.
Postage is the major cost factor in printing and mailing, explains Clayton Treloar of MBE Perth CBD. The aim is to use all discounts available. On top of discounts for volume, Australia Post offers further discounts of around 30c per piece for “clean mail” (sorted into postcodes and bundled into 300-piece bundles). So, the final cost-per-piece to MBE is in the range of 70c-$1.
An account with Australia Post is required, as well as the need for appropriate software to pre-sort the data, says Karen Burdett of the Flagstaff Group. “It is also essential to comply with Australia Post requirements for mailing, including DPID addressing. Flagstaff works with Australia Post to always ensure we can maximise savings for our customers with their mailouts.”
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