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How to Cut Postage Costs

Cutting costs by using nine-digit zip codes.
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Try as it might, no alternative deliverer has been able to spirit a piece of flat mail around the country more efficiently than the U.S. Postal Service (USPS). Must the private sector therefore swallow whatever Washington feels like charging? Not necessarily -- thanks to a marketing scheme of the USPS itself, which grants significant price breaks for mail that meets certain preconditions.

One of them is Zip + 4, a coding strategy introduced in 1983, in which every mailing address in the country has its own nine-digit zip code. By the late 1980s, though, barely 15% of domestic mail was using such "smart" codes, mainly because it takes a colossal database merely to store them. To entice reluctant businesses into adopting Zip + 4, the USPS offers to upgrade a commercial mailing list from five to nine digits for free. The conversion is a one-time-only favor, however, after which the participant is obliged to update the list at its own not-inconsiderable expense.


COST IS NO LONGER AN EXCUSE. IN A PLAY FOR THE ORDINARY-BUSINESS MARKET, ARC TANGENT RECENTLY TRIMMED THE COST OF ITS ZIP-CODING PRODUCT BY 87%, FROM $1,495 TO $195. GIVEN THAT PRICING, HOW MANY PIECES OF FLAT MAIL WOULD A RUN-OF-THE-MILL ENTERPRISE HAVE TO PROCESS FOR IN-HOUSE AUTOMATION TO PAY OFF? AS FEW AS 1,000 A MONTH, WARRANTS ARC TANGENT PRESIDENT WILLIAM URSCHEL. HE OUGHT TO KNOW: HIS COMPANY MAILS ABOUT THAT AMOUNT. -- ROBERT A. MAMIS

The Product

It's called Zip++ (version 2.0) and costs $195. Both software and affiliated national address database come packaged on a single compact disc. The program is updated and reissued quarterly. In conjunction with Arc Tangent Professional Mail ($695), it merges and purges addresses, inserts nine-digit zip codes, presorts by carrier route, and prints form letters and bar codes. Runs on IBM-type microcomputer with hard disk; requires CD-ROM drive. Arc Tangent, Santa Barbara, Calif.; (805) 965-7277.

* * *

Cleanliness Pays

The USPS estimates that 15% of the average business list is wasted on bad addresses; thus a company that doesn't sanitize its lists essentially is paying 33.4¢ for a 29¢ stamp. The USPS's Zip + 4 conversion program turns the antiquated five-digit zip codes on corporate mailing lists into the efficient nine-digit kind so the post office can save on labor, and standardizes and corrects the spellings of addresses so companies can save on postage. To take advantage of the government's free offer, you must supply your list on an MS-DOS 3.5-inch or 5.25-inch floppy in standard database format. For information call (800) 238-3150 or write to the National Address Information Center, Diskette Processing Services, 6060 Primacy Pkwy., Suite 101, Memphis, TN 38188. Make that 38188-0001.

Last updated: Aug 1, 1991




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