MAILING IS DEAD.....
With all the woes of the United States Postal Service (USPS) along with some apparent directions toward cross media marketing it is easy to arrive at a conclusion that the mailing business is dead and being buried.
To paraphrase Mark Twain: "The report of postal death is an exaggeration." It is true that publication, catalog and direct mail volumes are lower but one reason is due to smarter marketing methods where mailing lists are better prepared resulting in less waste in mailing. Postage cost saving techniques like co-mingling for direct mail, publications and catalogs require smarter sorting and inserting equipment along with software and verification equipment makes sure it all comes together without error.
For dealers, having a mailing product line also opens the door to expanding their markets and selling opportunities. There was a time when most direct mail was handled by a finite number of dedicated mailing companies. In the 1990's it was realized by some printers that there are value added benefits in doing the mailing themselves. There was money to be made along with scheduling and quality control advantages. The introduction of volume personalized digital printing technologies accelerated the movement towards mailing services as an expected part of a printer's offerings. Today there are few mailing house (many have become digital printers and marketing organizations). WHY? The Printers Are The Mailers.
An interesting and educational article on USPS is "Going Mobile in Mail" in the March 2013 edition of Printing Impressions. Written by Erik Cagle, Senior Editor, the article shows what the postmaster general, Patrick Donahoe is doing to sustain the USPS. This article shows how the USPS offers promotions to reduce mailing costs and how printers are creatively playing the "postage game" finding ways to save postal costs and getting better returns on postage investments. To emphasize this point, a catalog printer Dealer Communicator spoke to indicated that the largest fixed cost in catalogs is postage. For this reason the printer hired information technology people to clean up, sort and integrate mailing lists and they purchased inserters with over 30 pockets to accommodate multiple publications to be comingled.
Not only are printers in the mailing business, there are many corporations, universities, non-profits and even retail businesses that are volume mailers. For a while it was in vogue for in-plant print shops to outsource mailings. But today, digital presses are bringing in-plants back to life with personalized printed pieces from statements, trans-promotional items, direct mail marketing and corporate documents. AND, they're doing their own mailing.
To get insights on the state of the mailing business, Dealer Communicator (DC) asked Bob Licari (firstname.lastname@example.org) an expert on the mailing business and a columnist for our newsJournal, some questions on his observations of the industry:
DC: What are the sales
trends for mailing related equipment, and other products? Are they up, down,
DC: Is the trend towards
digital printing having any effect on mailing - if so, what is being affected?
DC: Are the mailing
dealers also selling software such as mail sorting, file laundering, and
DC: So then.... how do
the dealers support their customers: do they provide training, consulting, or
DC: How do you see the
postal regulations affecting mailing or better put - how can the dealers take
advantage of new regulations?
ABOUT LICARI & DEVLEX Bob Licari has been in the mailing business selling equipment and advising dealers, manufacturers and customers on equipment, software and mailing services. You should read his helpful DC column to get more of his helpful hints and advice. His topics range from sales/marketing to technology. Here are some sample titles: How To Win In A Market Suffering From Equipment Glut; Telemarketing Do's and Don'ts; Demonstrating Tabletop Ink Jet Addressing Equipment And Software; Phone Canvassing: It's Like Hunting; Encourage Software Sales and Subsequent Renewals At Your Dealership To Create Repeat Revenue; and others.
TO FURTHER UNDERSTAND THE OPPORTUNITIES FOR DEALERS, IN SELLING MAILING EQUIPMENT and SOFTWARE, Dealer Communicator reached out and asked some dealers that sell to mailers a few questions about the mailing products they sell, their views and experiences.
The range of equipment that dealers sell for the mailing market range from the usual including: inserters; postage meters and ink; paper supplies; tabletop folders and paper supplies along with some selling digital envelope presses and various mailing software along with fulfillment software. DC asked these dealers about their target markets and observations on the mailing market in general.
Tony Kuchta, Executive Vice President of Lineage (www.trustlineage.com) a multi-location dealer that sells mailing, copier, office furniture and other business equipment based in Kansas City, KS. Kuchta told DC that their market is a range of corporations over $10,000,000 in revenue and 100 or more employees. With regards to their sales he sees it shrinking due to the internet and knock-off supplies. They are addressing the internet sales problem with their own on-line catalog.
Kris Feldhake, president of Kridan Business Equipment (www.kridan.net) located in Indianapolis, IN's primary market are in-plant's, digital printers and corporations. He sees the mailing products more as an accommodating service than a growth product line. Feldhake wrote that mailing equipment contracts and O.E.M. products still serve this (mailing) industry the best.
In contrast Rob Midgett, president of BMI Mailing Systems (www.bmimail.com) located in Greensboro, NC built their business focused on mailing products. Midgett told DC "Our niche is legal, banking, and medical with a focus on firms with multiple offices. Also, as a Major Account Dealer/Partner for FP Mailing Solutions for over 39 years, we are uniquely experienced to coordinate the mailing automation needs for corporate networks nationwide. Additionally, we are transitioning our typical product offerings to include more software-oriented automation. One unique solution is to capture & capitalize on the shift to email in our target markets. Our product allows legal & financial institutions to synchronize their member/client data, then place that data directly into their email system contact folders (by zip code, for example) allowing them to "mass personalize" the marketing effort to their customer base. This allows us to help longtime clients to grow more effectively via email...which will by default grow their need for regular mail - which will always be necessary. Win-Win." Midgett sees mailing as a growth area of their business.
Another dealer selling equipment for mailing is Graphic Arts Equipment Company (www.gaec.biz) located outside of Chicago in Buffalo Grove. Their president, Chuck Schwartz told DC that they stay away from the new inserters and similar product sales, but we do a fairly good job with tabbing equipment. With regards to selling in today's business climate, Schwartz said, "when economic times are tough, convincing customers to update their equipment becomes tough. But they will always need the supplies as long as they are still using their equipment. That said, people today shop for the bargains, so it becomes a very competitive market. Fortunately, there are still many buyers who, while they look for the best price, still put a lot of trust into good service. Today you have to give both."
When mailing is mentioned many dealers think that Pitney Bowes has a lock on the market. But over time other postage meter and mailing equipment products have come to the market that provides a choice to your customers. For example, one company selling through dealers is Colorlabs (www.colorlabs.com) offering high quality aftermarket mailroom consumable products like postage meter inks and a provider of value added marketing services.
As you can see the mailing business is viable but as Bob Licari indicated the key is to have full knowledge of this market. The interest in mailing products is high enough for Print 13 the trade show in Chicago, September 8-12, to dedicate space for these products - hardware and software. But there is another place for dealers to go to get a great education on the state of mailing and have quality time to share thought and ideas with peers. The National Conference of AIMED, the Association of Independent Mailing Equipment Dealers, will hold their meeting April 24-27 in New Orleans (www.aimed.org).
DC asked Rick Chambers, Executive Director of AIMED his view of the state of the mailing industry. He said "independent dealers in the mailing, shipping and business communications industries face many challenges in an evolving market. Shrinking mail volumes, dealer consolidations, and changes in distribution models all require dealers to be smarter and more disciplined than ever as they grow the profits and value of their businesses. Dealers continue to look for ways to leverage their considerable strengths of local presence in their markets, excellent service reputation, and strong relationships with their customers and to find new products and services to expand their market presence. Areas of growth include software, supplies, and new equipment lines."
The AIMED conference program will focus on a variety of topics to help dealers diversify and grow their businesses. The keynote speaker this year is Jim Cochrane, Senior Vice President of the US Postal Service, who will talk about changes in the Postal Service and the impact on dealers. Other conference topics will include an update from Bob Goldberg, AIMED Legal Counsel, along with presentations on the Five Essential Elements of Leadership, Bringing Prospects to YOU (the Power of Inbound Marketing) and Software Sales, Show Me the Money in the Cloud. Also highlighted will be the popular Product Showcase, featuring some 30 vendors. Friday afternoon's session will also feature face to face meetings between dealers and top level executives from FP Mailing Solutions, Neopost and Pitney Bowes. For information on the conference, go to the AIMED website at www.aimedweb.org.
The role of Dealer Communicator is to keep the dealer channel informed on markets and products that will grow and generate profits. Although we are convinced that mailing products offer this potential, as indicated it is a market that requires the dealers to keep on top of postal regulations, equipment enhancements, software and how to support the needs of printers and mailers. So we encourage you to check out all the products in this issue relating to print and mailing that are offered by the advertisers in Dealer Communicator, particularly ColorLabs, PVC, Akiles, Zapco, H.S. Boyd and go get onsite education at AIMED and Print 13 that will help you grow sales in the print and mailing markets. DC
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