The Pitfalls of Pricing Comparisons

Companies attempting to compare pricing from competing outsource document service companies have a difficult task. Each vendor may offer a different menu of services and price schedule. Invoice line item evaluation can be time consuming and confusing.   

Outsource companies bundle services differently. Some companies quote a single price for printing and inserting a document. Other organizations separate those operations from their invoices. Companies may quote ePresentment as a flat rate or by the image. Tiered prices change when volumes fluctuate. Some service providers charge extra for receiving and storing items like pre-printed inserts. Others don’t. Still other document service providers may replace inserts with full-color “onserts” printed as part of the documents themselves. Onserts may be billed separately, or not mentioned at all on price quotes. 

Outsource service providers add value at different points in the document production workflow. It’s not just the pricing that’s important. Companies must consider the benefits of working with each prospective outsource document vendor. Can an outsource provider enhance your documents? Add functionality? Improve deliverability? Lower customer service costs? Do they handle document composition or must you supply print-ready files? Document service companies can enrich your customer communications in dozens of areas. Added value must be part of the calculation. 

Postage Comparison 

Postage computations are especially challenging when comparing service providers. Mail service providers lower postage costs by taking advantage of workshare discounts (presorting mail or drop-shipping closer to the destinations). Service providers may offer each client different discounts based on their mail distribution density. Or they may combine mail from all their clients through a post-print presort mail operation and pass some of the postage savings along. 

How the mail service provider divides the postage savings can make a difference in the total postage costs a company might pay for the same work at different mail service providers. 

Besides presorting, other factors also affect postal costs: 

  • Householding–This technique allows print/mail service providers to combine two or more mail pieces in a single envelope.
  • Format changes–Using a variety of methods, service providers can turn items formerly mailed as parcels into lower-cost flats or convert flats to letter mail. 
  • eAdoption-Document service providers can add functionality and features designed to encourage more customers to switch to paperless delivery and reduce the number of pieces to send through the post. 
  • Promotional programs–The US Postal Service routinely offers special discounts for qualified mail during specific promotional periods. Print/mail service providers can alert their clients to relevant promotions and help them take part. 

Note that some techniques described above will lower mail volumes. Because mail density in geographic locations affects postage rates, lower volumes can raise the per-piece postage price even though the overall expense is lower. 

Added Value 

The greatest financial benefits of working with one service provider or another may never be evident as details on the service provider’s invoice. Savings in postage, paper, or printing are relatively small compared to the positive impact an outsource vendor can have on their client’s objectives for customer retention, lifetime customer value, or customer experience. Document improvements such as upgraded design or user-friendly online self-service portals reduce client operating costs. These changes lessen the volume of calls handled by a client’s customer service department, increase customer retention, improve cash flow, and promote upsell opportunities. 

Document service providers add value by: 

  • Highlighting important customer information or adding dynamic graphs and illustrations on transactional documents. This improves customer comprehension and lessens the need for customers to call with questions. 
  • Providing easy access to document archives and a consistent interface which allows customers to find the information they need without aid from customer service. 
  • Adding click-to-pay or text-to-pay to digital bills. Integrated payment improves cash flow and reduces collection activity. 
  • Enhancing transactional documents with dynamic marketing messages. These highly segmented messages allow clients to target their customers with relevant offers certain to elicit a greater response than generic bill stuffers. With the help of their document services vendors, some billers have turned their documents into revenue-generators by selling ad space to carefully selected advertisers. 
  • Entering mail closer to its destination, which accelerates delivery. Reducing the days sales outstanding period shrinks accounts receivable balances and brings money into the organization sooner. 

Allowing customers to choose their document delivery methods and managing those preferences. Honoring customer preferences is a big factor in how customers perceive the company. Print/mail service providers who can offer multi-channel distribution choices help their clients improve the customer experience and build customer loyalty. 

Choosing the right outsource document service provider involves more than an invoice comparison. The most important selection criteria is determining how each prospective vendor can improve your business. What do they offer that enhances the customer experience, lowers operating costs, or achieves other business objectives? Price will always be a consideration when choosing vendors, but the line items on a price list don’t tell the whole story. Today, organizations look upon their document services providers as business partners, not suppliers of a commodity that can be acquired anywhere and are differentiated only by price. 

Leave a Reply