Mailing Systems Technology - September/October 2008 - (Page 20) Trends OPERATION compare? Newest mailing study reveals trends and pricing info By John C. Stewart tices of mailers when dealing with larger and larger quantities. The quantity brackets used in the survey include breakouts for the following: 1-9M, 10-24M, 25-50M and 50M and greater. Information is also provided as to the percentage of mailers who apply either minimum charges or setup fees for each of the services they provide. The 2008-2009 Mailing Services Pricing Study also features a popular section titled “Market Baskets,” which includes a variety of comparisons of both pricing and financial ratios broken down based upon geographic regions, sales per employee, population density and sales volume. As a result, a smaller company with sales in the $750,000 to $1.5 million range (excluding postage) can compare their overall productivity and pricing practices against similar firms. One of the more interesting “market basket” comparisons compares the performance and pricing practices of companies that provide both printing and mailing services against those firms who provide mailing services only. While the latter (larger, mailing only firms) are typically located in larger facilities, their overall sales are lower as is their sales per employee. Study Compares Sales Per Employee Sales per employee (SPE) is a key indicator and tool for measuring productivity in many industries, and the differences between the two market baskets noted above is quite revealing. While the average SPE for all participants in our survey was a respectable $115,928, firms offering both printing and mailing services reported an average SPE of $119,584 and a median SPE of $124,000. In contrast, firms who offer mailing services only report an average SPE of only $87,544 and a median SPE of $89,272. It is important to note that SPE has nothing to do with wages or profitability. It is, however, a reliable indicator of productivity since it is calculated by dividing total sales (excluding postage) by the total number of equivalent, full-time employees, including the owner. Calculating your own company’s SPE can be quite revealing and disturbing depending upon what SPE you arrive at. Rationalizations aside, when an owner realizes that he requires almost 11.5 full-time employees to produce $1 million in sales, and yet a similar firm across town can produce that same $1 million in sales with three less employees (8.36), it ought be cause for alarm as well as a call for action. Unfortunately, too many owners are oblivious to their low SPEs and consequently settle for lower productivity and ultimately lower profits as well. Competition Increasing Significantly It has been clear to us during the six years in which we have conducted this study that there has been a dramatic increase in the How does your H ow productive is your mailing operation compared to your peers? Do you track your monthly piece volume? Are printing firms who now offer mailing services having an impact on the mailing industry? Answers to the above questions, as well as many others, can be found in the recently released 2008-2009 Mailing Services Pricing Study. This 70-page report provides pricing data for more than 35 popular operations offerings in the mailing and “letter-shop” industry. (You can read more about this study as well as purchase it by visiting Mailing Systems Technology at www.MailingSystemsTechnology. com.) In addition to providing general data and trends related to the mailing industry (See Table 1), the study, as it has done since 2002 when it was first published, provides basic setup charges, minimum charges and prices per thousand for basic mailing services such as CASS and NCOALINK processing, de-duping, letter-merging, mail matching, application of both pressure sensitive and Cheshire labels, insertion, tabbing charges, sorting and bundling as well as dozens of other products and services. In most cases, pricing information is broken down into four common quantity ranges in order to reflect the typical discounting prac- 20 SEPTEMBER-OCTOBER 2008 | WWW.MAILINGSYSTEMSTECHNOLOGY.COM http://www.MailingSystemsTechnology.com http://www.MailingSystemsTechnology.com http://www.MailingSystemsTechnology.com
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