Postal Optimization Guide: How to Reduce Postage Costs

How to Optimize Your Mailing Practices and Lower Your Postal Rates

In an era of fluctuating operational costs, mastering your mailing practices to lower postal rates isn’t just smart, it’s essential. As a business that relies on mail, your goal is to achieve the lowest possible postage rates without compromising mailpiece design or print-mail efficiency. Postal optimization is the art and science of blending technology, streamlined processes, and appropriate physical materials to significantly reduce your overall mailing expenditures. This guide will illuminate how you can optimize your postage costs and enhance mailstream efficiency, all while maintaining the high-quality communications your customers expect.

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What is Postal Optimization?

Postal optimization is a comprehensive strategy employed by businesses to slash costs and boost efficiency throughout their mailing operations. It involves a suite of techniques including robust address hygiene, optimal mailpiece design, leveraging postal discounts like presorting and commingling, and the critical use of Intelligent Mail® barcodes (IMb). In today’s competitive print and mail industry, achieving peak efficiency and adhering to optimal mail preparation standards is crucial.

Instead of reducing mail volume in response to USPS® rate adjustments, savvy businesses leverage optimized mailing practices and a spectrum of USPS discounts to secure the lowest postage rates. This proactive approach enables continued effective mail campaigns. By implementing postage optimization strategies, businesses not only achieve significant cost savings but also ensure their mail reaches recipients with better mail piece deliverability and accuracy.

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Postal Optimization Strategies and Programs

1. Address Management
2. Presort Discounts
3. Intelligent Mail Barcodes (IMb)
4. Commingling and Co-Palletization
5. USPS Postage Promotions
6. Electronic Return Mail Solutions
7. Using Standard Size Mailpieces
8. Using the Right Paper Stock
9. High-Volume Discounts
10. Partnering with an Outsource Print-Mail Provider

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Core Strategies for Postal Optimization & Reduced Postage

Let’s explore key strategies and USPS programs designed to lower your postal rates, improve your Mailer Scorecard (more on this later!), and ensure your business-critical documents reliably reach your customers.

Here are ten of the most effective ways to lower your postal rates, improve your Mailer Scorecard, and make sure your business-critical documents reach the hands of your customers.

1. The Foundation: Superior Address Management & Data Hygiene: The quality of your address database is the bedrock of postal savings. Diligent address hygiene, which includes identifying and correcting inaccurate addresses, removing duplicates, and consolidating multiple mailpieces to the same household, directly impacts wasteful postage spending and reduces Undeliverable as Addressed (UAA) mail.
   • CASS Certification™: The Coding Accuracy Support System (CASS™) is a USPS certification process for software that standardizes and corrects addresses. Using CASS-certified™ software is vital for ensuring your addresses are accurate, complete (including ZIP Codes™, cities, and states), and ready for automation discounts.
   • NCOALink®: The National Change of Address (NCOALink®) system provides access to USPS change-of-address information filed by relocating individuals and businesses. Regularly processing your list through an NCOALink® licensed provider is crucial for meeting the USPS Move Update requirement and minimizing UAA mail.
2. Unlock Savings with Presort Discounts: The USPS processes vast quantities of mail daily. By presorting your mail by ZIP Code™ according to USPS guidelines, you perform some of the initial sorting work, reducing USPS processing costs. These savings are passed back to you as significant postage discounts. This “worksharing” partnership is a highly effective way to curb postage expenses.
3. Harness the Power of the Intelligent Mail® Barcode (IMb®): Utilizing the Intelligent Mail® barcode (IMb®) is essential for obtaining the lowest automation postage rates (provided all other automation requirements are met) and is a prerequisite for many USPS programs. This 65-bar Postal Service™ barcode allows mailers to track individual mailpieces, providing unprecedented mailstream visibility and enabling participation in valuable services.
4. Maximize Density through Commingling and Co-palletization: Commingling involves combining your mail with that of other companies to achieve higher mail volumes destined for specific ZIP Code™ areas. This aggregated volume qualifies for deeper presort discounts because the mail is sorted closer to its final destination. Co-palletization is the practice of combining trays of already sorted mail from different mailers onto the same pallet to achieve better USPS drop-shipping rates. While commingling means sharing space within a mail tray, co-palletization involves sharing space on a pallet. Both are powerful postal logistics strategies for maximizing discounts.
5. Stay Informed: Capitalize on USPS® Postage Promotions: Each year, the USPS rolls out various promotions offering temporary postage discounts for First-Class Mail® and USPS Marketing Mail®. Keep a close watch on these opportunities.
   • First-Class Mail® Examples:
     • Earned Value Reply Mail Promotion: Earn credits for using eligible IMb on Business Reply Mail® (BRM), Courtesy Reply Mail™ (CRM), and Share Mail® pieces.
     • Personalized Color Promotion: Incentivizes using dynamic color printing on bills and statements to boost engagement.
   • USPS Marketing Mail® Examples:
     • Tactile, Sensory, and Interactive Promotion: Encourages mailers to use innovative papers, inks, and finishing techniques to create more engaging mailpieces.
     • Mobile Shopping Promotion: Offers discounts for integrating mobile technology (like QR codes) that direct recipients to online shopping experiences.
6. Efficiently Manage Return Mail: Electronic Solutions: Physically returned mail consumes mailroom space and represents wasted postage. Implementing an electronic return mail solution can transform this. Services like Address Correction Service (ACS™) provide electronic notifications for COA (Change of Address) and UAA information. FSSI’s eReturn Mail solution, for instance, matches USPS data with its Unique Piece Tracking (UPT), allowing digital management of returned mail and real-time updates to your customer database. This improves deliverability and ensures Move Update compliance when COA data is used within the 95-day USPS requirement.
7. Strategic Mailpiece Design: Size and Weight Matter: The physical characteristics of your mailpiece significantly impact postage.
   • Standard Sizes for Automation Compatibility: Non-standard or oddly shaped mailpieces often incur higher postage. Adhere to USPS minimum and maximum dimensions for letters and flats to qualify for automation rates and avoid surcharges. Ensure your mailpiece has a proper aspect ratio and clear zones for addressing and barcode placement for optimal automation compatibility.
8. Paper Stock and Weight: The weight of your paper stock can tip your mailpiece into a higher postage category. While recent increases to the maximum weight for automation letters (up to 3.5 ounces) offer more flexibility, always test samples. Weigh your components (envelope, contents) to ensure you’re within limits. Lightweight paper alternatives can offer savings, especially for high-volume mailings.
9. Capitalize on High-Volume Mailing Efficiencies: Managing high-volume print and mail requires a robust infrastructure. This includes leveraging technology and software for operational optimization, having adequate staff and equipment, and fostering strong vendor relationships. These elements streamline mail preparation and processing, helping to eliminate waste and maximize cost savings inherent in large-scale operations.
10. The USPS Mailer Scorecard: The USPS Mailer Scorecard is an essential tool that provides mailers with data and feedback on the quality of their mailings. It measures factors like addressing accuracy, barcode correctness, and proper mail preparation. Monitoring your Mailer Scorecard helps you identify areas for improvement, maintain compliance with USPS regulations, and ultimately protect your access to discounted postage rates. Consistently poor scores can lead to a loss of discounts or even penalties.

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Beyond Cost Savings: The Broader Impact of Postal Optimization

While reducing postage is a primary driver, the benefits of comprehensive postal optimization extend further:

• Enhanced Deliverability: Cleaner data and proper formatting mean more mail reaches its intended recipients.
• Improved Cash Flow: For transactional mail, faster delivery can mean quicker payments.
• Stronger Customer Relationships: Reliable delivery of important communications builds trust.
• Reduced Waste: Less UAA mail means less wasted paper, printing, and postage.
• Actionable Insights: Tools like Full-Service IMb provide data that can inform future mailing strategies.

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Looking for more helpful guides to the USPS? Read our Ultimate Guide to the USPS.

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Unlock Your Postal Savings Today!

There are numerous postal optimization strategies available to enhance your mailing efficiency and slash your overall rates. Through a strategic mix of advanced address management tools, diligent adherence to USPS programs and discounts, smart mailpiece design, and efficient mail preparation practices, you can secure the best postage rates possible.

Looking for more helpful guides to the USPS? Read our Ultimate Guide to the USPS.

Ready to transform your mailing operations? Contact FSSI at 714.436.3300 today to discover how an expert Mail Service Provider can help you achieve significant postage savings without sacrificing the quality and impact of your customer communications.

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