Petersburg Life Reduces Returned Mail by Half
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Petersburg Life Insurance Company, a Missouri-based insurer, was struggling with an overwhelming returned mail problem. As a decentralized organization, operating through eight independent business units, each business unit handled the problem differently. This decentralization further complicated the matter to the tune of more than 650,000 mail pieces per year being returned as Undeliverable as Addressed (UAA).
The first step was to focus on the facts and find out exactly how many mail pieces were returned each year, how they were handled, and how much it cost to receive, re-process, and re-mail the messages.
The Challenge
The Proof is in the Survey
In an attempt to get a handle on the crisis, Petersburg Life surveyed each of its eight business units to understand the scope and cost of the problem. The results were eye-opening and revealed the following four key aspects of the returned mail problem:
- Roughly 6.5% of the 10 million mail pieces distributed annually were returned as UAA
- Both customer and agent relations were strained by delayed or undelivered communications
- Postal regulation compliance and postage discount status was in jeopardy
- Handling, re-mailing, investigating, and updating the information on the returned mail totaled a cost of more than $1.1 million per year
It All Adds Up
The cost and unnecessary expense associated with returned mail added up quickly:
- Labor and manual handling of returned mail and move notices, and efforts to contact customers and update the customer database = $250,000
- Lost postage for messages that were never delivered to the recipient = $190,000
- Outside service to investigate and update invalid addresses = $72,000
- Re-generating, re-processing, and re-mailing the pieces to the correct address = $485,000
- TOTAL cost = approximately $2.00 per returned mail piece
The Solution
h4.Three’s the Charm
To solve the problem, Petersburg Life implemented an integrated software solution involving three Pitney Bowes tools:
- StreamWeaver — for print stream engineering
- Finalist — for address quality assurance
- SmartMailer solution — to ensure full compliance with USPS requirements
Help from the Experts
To eliminate the need to engage the already overtaxed IT department, Pitney Bowes implemented the first two applications for Petersburg Life. Pitney Bowes performed the analysis, prepared the specifications, and wrote the initial programs. The project was implemented on time, on budget, and glitch-free — to the delight of both Pitney Bowes and Petersburg Life.
The Benefit
Decrease and Save
The total number of returned mail pieces decreased by nearly 40%. If extrapolated over the insurer’s entire annual mail volume, that adds up to an eventual reduction of 300,000 returned mail pieces each year — resulting in a savings of $600,000.
Better Things to Do
The decrease in returned mail has allowed Petersburg Life to redeploy its people into higher value and more productive work. Prior to the implementation of the mailstream solution, Petersburg Life had 22 full-time employees working on one aspect or another of the returned mail problem. The firm has migrated these people to other tasks as the volume of UAA mail has decreased.
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