Part I: Decoding the Intelligent Mail Barcode,

19 May

Part one of a two-part series on complying with and benefitting from the U.S. Postal Service’s Intelligent Mail Barcode

Recently, a direct marketing agency was hiring for a new candidate to manage the mail offers sent to a customer database. In the applicant pool were Ivy League and MBA degrees as well as years of direct marketing experience. But in the end, the agency hired a candidate with very little on her résumé, aside from one bullet point: psychic.

Yes, that may be a tall tale, but a psychic could very well outperform a seasoned direct marketing veteran when it comes to navigating the gray areas of a direct mail campaign, such as: When did the mailing hit in-home? Which mailings were sent to wrong addresses? When can we follow up with an e-mail?

Luckily, there is no longer a need to hire a mind reader to support your marketing staff now that the U.S. Postal Service is rolling out its Intelligent Mail Barcode system (IMB), a 65-bar image used to sort and track letters and flats with greater visibility than ever before. Reviewing the IMB rules and regulations below will help you to achieve compliance in time for the May 2011 deadline. For ideas to reap the creative benefits of IM, stay tuned for part two of this article in our February issue.

Time Line and Planning
Although the USPS has already begun accepting IM barcodes for its pilot programs, the official starting date is in May. The deadline for implementing IMB is May 2011, and up until then, the USPS is going to accept POSTNET and PLANET barcodes for automation discounts. The two-year transition period allows the USPS to make subsequent updates and enhancements to its system. “Between now and 2011, you can qualify for automation discounts by using both IM and POSTNET codes. In the late fall of 2009, we’re going to provide an increased incentive for full-service IM. After May of 2011, you must use either a basic or full-service IMB format in order to qualify for an automation discount,” explains Thomas
Day, senior vice president of Intelligent Mail and address quality for the USPS.

Industry-wide, the amount of time necessary to implement IM varies, and experts agree that the sooner you begin preparing, the better. “It took two years to redo our pretrack system … including speccing, budgeting it, getting approval and getting it done. So this is something that I don’t think it pays to sit on your haunches waiting,” says Charley Howard, vice president of postal affairs for Harte-Hanks, a direct and targeted marketing solutions provider.

Day says the two-year window for transition will absorb any of the lag time that larger companies, housing their own mainframe environments, need to implement IM into their existing IT development cycles. Smaller companies and even some larger mailers who use third-party vendors for their printing and fulfillment needs will have to work with their partners to estimate preparation time. Chris Duncan, senior director of promotions for OfficeMax, remarks that it’s “tough to do on your own, especially for someone our size and how much mail we do and the different types of mail we do; you need good help, good partners … We’ve got some great printers and mail houses that will help us get there.”

Differences Between Full and Basic Service
There are two options available for Intelligent Mail: full and basic service. Full service promises a greater postal discount, to be announced in late fall 2009, and greater visibility and tracking as each letter tray, sack, pallet and container requires IMBs in full service. Full service also requires that you maintain a unique barcode for each piece of mail for 45 days after it enters the mailstream. Finally, full service moves away from paper documentation to a completely electronic communication with the post office.

Basic service requires using the barcode on each mail piece and uploading the data to the post office. But the trays and other mail elements do not need to be coded, and there is no 45-day requirement for the IMBs to remain unique.

For both levels of service, all mailers must acquire a Mailer ID from the USPS. “Everyone’s got to get a Mailer ID; it’s like a driver license. If you want to work with the Post Office, you’ve got to get a Mailing ID; that’s whether you are a mail owner or a service provider,” Howard says. The ID is free and can be obtained through your current bulk mail analyst, online at www.ribbs.usps.gov or by calling the Postal One! Help Desk at (800) 522-9085.

Howard says that when considering service level, there is little difference between basic service and POSTNET, except for the new barcode symbol. But he calls full service a “quantum leap” ahead of other systems, owing to the pure electronic communication with the post office and the requirement to maintain uniqueness for 45 days. “You have to maintain uniqueness at the record and container level … and the 45 days is when the post office gets the mail, not necessarily when the computer work was done, which could be 20 to 30 days ahead of time. So you have to plan for longer lead time,” he adds.

“The full-service Intelligent Mail Barcode, it’s a full suite of barcodes,” Day explains. “You not only produce the barcode on the individual piece of mail and the electronic documentation, but then you have to use the IM tray code and also the IM container code as you build the mailing … So there’s quite a bit of coding that has to be done,” he describes.

The Challenges of Using Full Service

One early challenge was whether vendors would be required to use their clients’ Mailer IDs, even when commingling and co-palletizing. “The barcode isn’t big enough to do everything you want to do directly. Why burden the barcode with all of that information? That’s what all of these data files are for,” Howard points out. The USPS came up with a solution called “Cast of Characters,” which digitally associates the supplier’s Mailer ID to the ID of the mail owner, allowing vendors to use their own Mailer IDs to prep large volumes of client mail.

Mailers, fulfillment vendors and printers must work together to determine when to implement barcodes within the mail process. Mailers can originate barcodes during the preproduction and planning, printing or shipping stages of a mail campaign. To handle co-palletizing, Howard came up with a system using parent and children pallets, which are all linked together using IMBs. For commingling, Howard has control over the mailing from its origin, so he merges different mailings into one drop and then sprays the IMBs onto the mailing. It may be harder for printers, rather than lettershops, to meet certain requirements. “Printers are very robotic-intensive … whereas lettershops or mail plants are very human-intensive, and it’s much more easy to adapt with humans than it is to reconfigure the robotics,” Howard notes.

Stricter Move Update requirements also affect mail owners and preparers using commingling and co-palletization. If the Postal Service finds a Move Update violation in a sample from a commingled mailing, there’s a financial penalty that must be paid. “The concern is can we tell the [mail preparers] which one of those hundreds [of mail owners] were the cause of the problem? Statistically, that becomes a bit difficult. We’re sampling the mailing in total; it’s a much different statistical sampling to figure out which one or couple of companies did it,” Day says. The other disagreement is the USPS wants mail preparers to collect the penalties, while mail preparers believe the USPS should track down the mail owners to impose penalties because vendors are hesitant to add extra costs to their invoices.

The Benefits of Using Full Service

Choosing to adopt full service IMB will afford deeper discounts, to be announced this fall. “The actual value of that incentive will go to our Board of Governors for their approval in February of 2009—at which time, with their approval, it will become a public document and then be sent to the Postal Regulatory [Commission] for their approval as well,” Day shares. IMB also will help the U.S. Postal Service’s bottom line and thus spur further service improvements. “As we achieve costs reductions, it gives us the ability to achieve profits—so cost reductions no longer relate to pricing [as they did under the old rate-case system]. Right now, we’re not achieving profits, so we need those opportunities,” explains Day, who says the focus is on cost reductions within the USPS and service improvements passed along as the benefit to mailers.

Full service also will leave mailers ahead of the curve, as the Postal Service promises future enhancements and releases. Going digital with full service IMBs will prepare mailers to tap into the seamless acceptance program, which the U.S. Postal Service hopes to roll out in the coming years. With seamless acceptance, Day says the jump from manual to digital sampling will allow the post office to virtually collect data for every piece of mail, even in a million-piece mailing, and from that data, understand the composition and verify the quality and accuracy of the mailing.

Perhaps the best perk of Intelligent Mail? The amount of trackability and control it puts in the hands of marketers. We will discuss the creative benefits of Intelligent Mail in part two of this article in next month’s issue.

Glossary of Terms

  • Barcode ID: A field reserved to specify the presort makeup of a mailing in conjunction with an Optional Endorsement Line, which can be populated with “00” if not used
  • Service Type Identifier: A three-digit service code describing what type of mailing it is, combined with any specific service options
  • Mailer ID: You will need to secure a Mailer ID which does not cost anything and is available through your local post office, online at www.ribbs.usps.gov or by calling the PostalOne! Help Desk at (800) 522-9085. Mailer IDs are available in six or nine digits depending on your mail volume
  • Sequence or Serial Number: Used to uniquely identify your mail. It can be six or nine digits depending on the length of your assigned Mailer ID
  • Delivery Point Zip Code: The 11-digit delivery point information used in the POSTNET and PLANET codes.

(Originally published in Inside Direct Mail, January 2009)

Check out Part II of this article here.

Also visit the Postal Affairs Blog for the most up to date news on Intelligent Mail and Direct Mail.

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4 Responses to “Part I: Decoding the Intelligent Mail Barcode,”

  1. Indy 08.09.10 at 5:56 am #

    It is very useful application.

  2. Elvis Sharrai 02.06.10 at 10:27 am #

    Rather nice post, genuinely helpful stuff. Never ever considered I would obtain the tips I would like right here. I’ve been scouring all over the internet for a while now and had been starting to get discouraged. Luckily, I happened onto your website and received precisely what I was looking for.

  3. Lisa Bowes 05.25.09 at 9:25 am #

    Just a clarification on Mailer IDs – mailers do NOT need to have their own Mailer ID, they can use the Mailer ID of their Mail Service Provider. One very important place where this comes into play, and can cost mailers – using a OneCode Confrim service provider’s Mailer ID can save the mailer from either having to buy a Confirm subscription, or from paying a $2500 fee to be a Confirm delegate. Confirm is a USPS program that provides tracking of First-Class and Standard class mailpieces.

Trackbacks/Pingbacks

  1. Part II: Decoding the Intelligent Mail Barcode « Britt Brouse : Writer + Editor - 05.19.09

    […] part one of this feature, published last month, postal experts reflected on the rules and challenges marketers face when […]

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