White Paper

Intelligent Mail®

NOTICE: In the Federal Register Ruling dated August 19, 2008, the USPSposted final rules on the implementation of new standards for theIntelligent Mail® barcode.

This White Paper is based on information published to date. As such,details are subject to change. For the most up-to-date information, visitwww.pbpostalinfo.com.

9/23/08

Optimizing the Intelligent Mail® BarcodeTurn new postal requirements into a business-enhancing resource.

OPTIMIZING INTELLIGENT MAIL®

Across the country, mailers who take advantage ofautomation discounts are planning for the Intelligent Mail®

barcode. Compliance with the May 2009 implementationdate will require changes to many business-criticalcommunications such as invoices, marketing campaigns,statements and check remittance.

At first glance, the Intelligent Mail® barcode requirementsmay appear to be only an operational issue. After all,replacing the current POSTNETTM barcode with the newIntelligent Mail® barcode will help you save on postage.

Early adopters, however, have discovered great value in thisnew-found intelligence—value that can positively impactdepartments throughout your company, includingmarketing, sales, customer care, collections, finance, riskmanagement and compliance.

In the short term, there are two ways to comply with thenew postal requirements: “Full Service” Intelligent Mail® and“Basic” Intelligent Mail®. While the Basic option may beeasier to implement, the Full Service option supports manyadded benefits including —as of the fall 2009—thelikelihood of greater postal discounts. How you deal withthe new postal requirements today may have an impact foryears to come, because few companies will want to committhe resources needed to implement one barcode optionnow and then additional resources to re-work the solutionsoon after.

In this white paper, the third in a series of helpfulresources, we explore some of the advantages a companycan achieve by implementing Full Service Intelligent Mail®.

The benefits, which provide value to many functionalgroups within your organization, are categorized here infour primary areas:

n Maximum postal savingsn Visibility into the mailstreamn Increased customer knowledgen More efficient print and mail operations

For a more detailed assessment, you can also contact PitneyBowes for a customized analysis and find out how you canmake the most of this transition. When you get smart aboutIntelligent Mail®, you put yourself and your company inposition to achieve more with your mailstream.

MAXIMUM POSTAL SAVINGSAs of the fall of 2009, mailers looking to earn the maximumpostal discounts will be required to implement the Full-Service Intelligent Mail® barcode. (The POSTNETTM andBasic IMTM barcodes will be priced the same at a higher rate,and the POSTNETTM barcode will be phased out entirely byMay 2011.)

The difference between 5-digit automation pricing andnon-automation pricing is significant:

First-Class Mail®

1 ounce letter: an additional 6.1 cents per piece2 ounce letter: an additional 10.6 cents per piece3 ounce letter: an additional 15.1 cents per piece

Standard Mail®

Letters weighing 3.3 ounces or less: an additional 2.8 centsper piece

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Intelligent Mail®

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THIS SIX BENEFITS OF MAILSTREAM VISIBILITY

1. LOW-COST PROOF OF MAILING

Some mail is more important than other. Failure toproperly deliver checks, credit cards, travel vouchers,cancellation notices, policy updates or other legalnotifications could have significant repercussions—butrarely is it worth the extra $2.70 cost per piece to meritCertified MailTM service.

With the USPS® Confirm® service, the Intelligent Mail®

barcode allows you to access Destination Confirmservice for mere pennies, giving you advance noticeabout when your high-value mail pieces will reach theirdestinations.

n Save over other forms of confirmationn Detect possible fraud when high-value mail is

rerouted, misrouted or undeliveredn Avoid unnecessary remails and reissues for mail

that is still in transit

2. PAYMENT TRACKING

Intelligent Mail® barcodes can also be applied toincoming mail when you barcode response forms andremittance coupons. Origin Confirm service lets youanticipate when an individual customer’s check (orresponse) is on the way back to you; and thisinformation can provide practical insights across yourorganization.

n Revenue management. Your finance departmentswill be able to predict and monitor payments moreeffectively, which improves cash flowmanagement.

n Unnecessary cancellations. When payment is inroute, you can avoid the cost of closing and thenimmediately reopening accounts.

n Smarter collections efforts. With preciseknowledge of when customer remittance entersthe mailstream, you can eliminate unnecessarycollection calls and dunning notices.

n Eliminate excuses. Verify claims that the “check isin the mail.” With the ability to provide moreaccurate answers, your team can addressconcerns and build customer confidence.

3. MORE EFFICIENT CUSTOMER CARE

With the right interface, you can provide mailstreamvisibility to your customer care representatives, givingthem the time-sensitive intelligence needed to providemore responsive customer service.

n Reduced talk time. Agents will be able to providedelivery status on statements, offers, paymentsand responses, allowing them to instantly resolveinquiries with greater accuracy.

n Fewer calls. You can also incorporate accuratedelivery status into automated response systemsand self-service websites, giving customers evengreater convenience—especially important for anyfirm that issues checks, cards, coupons orfulfillment kits.

n Accurate fee waivers. Piece-level tracking can alsohelp you realize revenue because you will knowexactly when remittance payments were mailed,making it easier for you to make informed fee-waiver decisions.

VISIBILITY INTO THE MAILSTREAMWhen a mail piece leaves your hands, you have anexpectation that it will be delivered to the right address, to the right person and at the right time. The differencebetween expecting and knowing, however, can be significant—and costly.

By allowing you to track each mail piece individually, theIntelligent Mail® barcode provides you with an opportunityto add a level of certainty. You can receive the precise statusof mail routing, which provides six key benefits.

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4. MORE EFFECTIVE MARKETING

With so many cost-saving advantages, it may surpriseyou to learn that mail piece tracking is often used bythose charged with increasing revenue: themarketing staff. Direct marketers in particular arelooking for any edge that can help them increase ROI,and the new Intelligent Mail® barcode helps providekey insights.

n In-home window. By monitoring campaigndelivery, marketers can determine which day ofthe week generates the most response and howlong it takes to deliver mail to different parts ofthe country. With the right tools, marketers canthen plan and forecast optimum in-home datesand increase overall response rates.

n Call center staffing. Likewise, being able toforecast delivery of individual mail pieces makesit easier to forecast the number and timing ofincoming phone calls. This helps marketersensure phone centers are staffed accordinglywhile minimizing waste.

5. STRONGER PERFORMANCE MANAGEMENT

While knowing that a mail piece was delivered isimportant, there’s also value in simply knowing it’sout the door—especially when you rely on third-partyvendors. For example, through Intelligent Mail® youcan verify whether the Òone day turnaroundÓ or SLApromised by your presort house has been achievedon a piece-by-piece basis. Likewise, you can monitorthe overall performance of the USPS and verifywhether any trays of mail were somehow misroutedor otherwise delayed.

6. IMPROVED TRACKING INTERNALLYIn addition to improved visibility once a mail pieceleaves your company, the Intelligent Mail® barcodealso helps improve the integrity of your ownproduction environment. With unique identifiers in place, you can verify the status of individual mail pieces and document performance againstinternal SLAs.

Perhaps the biggest advantage of mailstream visibility, however, is improved customer relations. Timelyresponses, accurate knowledge and improved service delivery can help you increase retention and boostoverall satisfaction with your firm. Whether you plan on leveraging this mail piece tracking now or in thelong-term, incorporating the Full Service Intelligent Mail® requirements into your operations will give youthe flexibility to respond to business unit demands.

Intelligent Mail®

INCREASED CUSTOMER KNOWLEDGEThe USPS has made it a clear goal to reduce Undeliverable-As-Addressed (UAA) mail by 50% between now and 2010, soit’s not surprising that the new Intelligent Mail® barcode willmake it easier for you to make address corrections asneeded. In fact, on First-Class Mail®, electronic AddressChange Service (ACSTM) is free when you use the Full-ServiceIntelligent Mail® barcode. (Free ACS is unlimited for First-Class® Mail; free for 30-days for Standard Mail® and 60-dayson Periodical Mail.)

After receiving the corrected electronic data from the ACSTM

program, you can update your source data or start whateverprocess you have in place for investigation, notification,consent and updating addresses—improving your overalldata quality and customer knowledge.

Given the unnecessary costs, lost opportunities and thedamage to customer relationships generated by pooraddress quality, this represents one of the most significantavenues to improve mailstream operations. Via OneCodeACSTM, the Full Service Intelligent Mail® option gives youanother tool to ensure more of your mail reaches itsintended recipients in a timely fashion. (Not surprisingly,

using the ACSTM service allows you to satisfy the USPS® MoveUpdate requirements, including its expansion to StandardMail® on November 23, 2008).

While valuable, mailers should note that OneCode ACSTM isonly one part of a best-in-class address quality process. Forexample, the combination of pre-mail change-of-addressprograms (such as NCOALink®) with a post-mailing program(such as the Address Change Service) can help mailersachieve significant benefits over either individual approach.

MORE EFFICIENT PRINT AND MAIL OPERATIONSThe Full Service Intelligent Mail® option requires you tohave a unique identifier on each mail piece. While the PostalService will use this barcode after your mail has beeninducted into the mailstream, you can also take advantage ofthis scannable piece ID during your document process, andthis will enable you to benefit from a broad range ofdocument management practices.

n Job reconciliation. Eliminate the manual processesassociated with job count discrepancies—you can trackeach individual mail piece through every step.

n File-based processing. Increase integrity and enablenew initiatives such as targeted messaging and selectiveinserting.

n Automated processes. Simplify document delivery withnew capabilities such as closed-loop reprinting andmulti-channel document delivery.

n Enhanced reporting. Streamline workflow with jobticketing capabilities that enable full control, reportingand centralized job accounting.

n Increased efficiency. With workflow studies, you canidentify trouble spots and find ways to improveproductivity, reduce cost and increase worker safety.

n Improved tracking. As mentioned previously, with theunique identifiers you can verify the status ofindividual mail pieces and document performanceagainst internal SLAs.

SOME ESTIMATE THE HARD COSTS OF RETURNEDMAIL TO BE $3.00 PER MAIL PIECE OR MORE

n print and mail costs of initial mailern postage on initial mailingn lost sales opportunitiesn increased call volumen unnecessary collection callsn handling of returned mailn one-off address correctionsn mail regenerationsn postage on remailsn communication delaysn customer dissatisfactionn delayed revenue receipt

PREPARE YOURSELF FOR THE FUTURE OF MAILAs the first full-scale barcode change since theintroduction of POSTNETTM in 1980, many companies mayfind themselves in uncharted territory. But savvy mailerswill quickly realize that Intelligent Mail® is much more thana barcode change—it’s about changing the value of mail.

There are many advantages to the proposed IntelligentMail® barcode, but how you manage the near-termimplementation could have long-term implications for yourbusiness. Decisions you make today could impactmarketing, finance, customer care and your overallcustomer experience for years to come.

Individuals responsible for mail production, therefore,should be thinking about tomorrow. Even if you have noimmediate interest in using the Intelligent Mail® barcode to

improve address quality, track mail or manage performance—choosing to implement the Full Service Intelligent Mail®

barcode now with these capabilities in mind will make iteasy for you to support these (and other) programs in thefuture with little effort. Fact is, it may not cost much moreto do it right the first time.

We want you to make smart decisions – decisions thatsimplify processes, ensure compliance, reduce postage andmost of all, add value to your business. When you contactPitney Bowes, you can expect first-rate postal knowledge,unrivaled expertise and innovative ideas… the samemailstream leadership that’s behind the nation’s leadingCASS CertifiedTM software, the most advanced documentoutput technologies, the most intelligent inserting andsorting systems and the largest presort service bureau inthe world.

For more information, speak with your Pitney Bowesrepresentative or call us today at 877-536-2736.

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Intelligent Mail®

World Headquarters1 Elmcroft Road

Stamford, CT 06926-0700

For more information about our products andservices, please log onto our website: www.pb.com

The Corporate Logo, Engineering the flow of communication andPitney Bowes are trademarks owned by Pitney Bowes Inc. The

following trademarks are owned by the United States Postal Service®:ACS, CASS Certified, Certified Mail, Confirm, First-Class Mail,

Intelligent Mail, NCOALink, OneCode ACS, POSTNET, Standard Mail,United States Postal Service, Postal Service and USPS.

©2008 Pitney Bowes Inc. • All Rights ReservedAn Equal Opportunity Employer • Printed in U.S.A.• PBT70215-C

AD#1.08

White Paper

Intelligent Mail®