Commentary & Analysis
The Last Inserters You'll Ever Buy
By Carro Ford Most large in-
By WhatTheyThink Staff
Published: June 7, 2004
By Carro Ford Most large in-house mail processors know which are the last inserters they'll ever buy. They're the ones they already own June 7, 2004 -- Many scenarios have been forecast during the last decade about the coming sunset of transactional mail processing. Prognostications have ranged from the cogent to the absurd, supported by similarly disparate arguments justifying the demise of mail. No matter what your opinion of these echoes from the past, the end is undeniably on the horizon, at least for the approach that relies on in-house mailing operations and all the resources, room, equipment, maintenance and everything else they require. Companies are reaching the point -- maybe not this year or next, but within a strategic period -- where such investments simply will no longer justify the return. However, like most things, it's difficult to quit cold turkey. With planning, end-of-life for a mailing process doesn't have to be chaotic or uncontrolled. Instead, it can ensure that your organization does not sacrifice efficiency, quality and competitiveness in exchange for too much equipment or too little. William Sterling (firstname.lastname@example.org) has made a career of advising document professionals on processing strategies, and he specializes now in consulting on end-of-life and transition strategies for high-volume mail processing environments. He offers some provocative viewpoints and "been there" advice for the changes and challenges facing document professionals, and by association, their financial and executive management. If We Buy Another "Interestingly enough, after having spent a decade struggling mightily to implement factory automation tools present in most other industries since the early '80s, the payoff for most large in-house mail processors is that they now know which are the last inserters they'll ever buy. They're the ones they already own," declares Sterling. His recent interviews about the future of transactional mail with managers of some of the largest in-house mail production facilities in the United States included some variation of the theme: " If we buy another inserter…" Already, many document professionals are rethinking what used to be an almost automatic decision. Steady Decline But Still Here Forward--thinking mailers must now contemplate end-of-life strategies for their in-house mail processing operations. Transactional mail volumes have been declining for many years, brought on principally by deregulation, competition and technology. From the Telecommunications Act of 1996 to the Check 21 Act, deregulation fosters competition that in turn drives investment in technology. " Even the USPS has one forecast planning for First Class mail to decline by 21 percent by 2017. I believe business-to-consumer billing and statements will decline by much more," he explains. "This nexus of change will exert ever more downward pressure on mail volumes in the future, as companies have no choice but to take advantage of new opportunities to innovate their contact with their customers," Sterling says. "An inserter is not now and will not in the future be anywhere near the leading edge of such innovation." This isn't to say that mail is going away in totality anytime soon. We've all heard that premature exclamation before. "In fact, it will be around in considerable quantities for as long as one cares to look into the future, mostly the result of preference on the part of a substantial population of consumers and fear on the part of many mailers to be leaders in change," he notes. However, considering the decline in mail volumes is an irreversible trend still gaining force, forward--thinking mailers must now contemplate end-of-life strategies for their in-house mail processing operations. Principally, these strategies must envision what investment should be afforded to ensure the efficiency, quality and competitiveness of mail as it steadily shrinks. Rethinking the Vendor Relationship Of paramount importance is a proactive approach to structuring service agreements with inserting vendors to ensure economy and flexibility long into the future. "Developing end-of-life strategies for mail processing environments will include a new type of relationship with your inserting vendor," Sterling says. "This is a relationship in which it behooves you to understand your future needs. Of paramount importance is a proactive approach to structuring service agreements with inserting vendors to ensure economy and flexibility long into the future. If they don't begin to act now, many companies will find both goals sacrificed, as the vendor community comes to grips with the anticipated, but nonetheless profound impact wrought on their business by declining mail volumes." Not to worry about the inserting vendors though. "For all practical purposes, the United States market has been controlled by a duopoly for over 30 years," Sterling declares. "Those two vendors have worked feverishly for the last decade to plan for the end of mail, adding a dizzying array of software, consulting and integration services in the quest to survive and thrive by anticipating what's next. Truth is, they won't really miss your orders for new inserters, and their balance sheets will certainly not be negatively affected by the loss of their factories that manufacture them. Their money is made in--you guessed it--service. The more you understand that, the better off you'll be when you negotiate for your dramatically changing future mail processing service requirements. Strategic planning can put cost control in the hands of the user." End-of-life can be an opportunity to renegotiate your relationship with a vendor who may have been part of the company for decades. Still, all good things must come to an end, or at least change. With smart EOL thinking, change can be for the better.