Ann Daley Vice President, Government & Regulatory Affairs, Pitney Bowes Alison Hall Director of Client Services – Direct Mail Solutions, Pitney Bowes

A USPS PRICE CHANGE & FULL-SERVICE IMB® - 2014 HERE WE COME!

Agenda

WHAT’S INSIDE Background

Highlights

The Details

Promotions

Intelligent Mail® Barcode

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2 Proposed Market Dominant Price Adjustments

1.Consumer Price Index-Urban (CPI-U) Price Proposal Average price increase of 1.69%

2.Exigent or Above-the-Cap Price Proposal

Renewed exigency request – Due to Great Recession Average price increase of 4.30% Caveat: Board of Governors reserves the right to pull the exigent

price increase if Congress acts on postal reform legislation

Background

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1.69% CPI + 4.30% Exigent = 5.99% overall average increase

Timeline

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Target Implementation Date is January 26, 2014

Classes of Mail Affected

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First-Class Mail® Single-Piece Letters & Cards Presort Letters & Cards Flats Parcels Outbound Single-Piece

International

Periodicals

Special Services

Standard Mail® Letters Flats Parcels High Density/Saturation Letters Every Door Direct Mail Retail Parcels

Package Services Bound Printed Matter (BPM) Flats BPM Parcels Media, Library Mail Alaska Bypass

Retail First-Class Single-Piece one-ounce letter increase − CPI from .46 to .47 cents − Exigency from .46 to .49 cents

New First-Class Mail® letter price category to be called “Metered Mail” − 1 cent less than First-Class Single-Piece

Changes to residual First-Class Mail letters price structure

The USPS® continues to price AADC and 3-Digit Letters and Cards at the same level

Second-ounce free continues for all Presort First Class Mail letters (Non-automation and Automation)

Intelligent Mail® barcode $.003 incentive maintained

First-Class Mail® Change Highlights

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Flat Sequencing System (FSS) preparation will be required in Destination FSS (DFSS) zones

Standard Flats − $0.001 per piece discount for pieces on DFSS-entered

scheme pallets

AADC and 3-Digit Presorted Letters will continue to be priced the same

− Presorting requirements are NOT changing

Intelligent Mail® Barcode $.001 incentive maintained

Simple Samples – No increase in the price of Simple Samples

Standard Mail® Change Highlights 1

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Customized Market Mail reduced from $.046 to $.044

New prices for EDDM – Commercial − $0.151 to $0.203, based on entry point

EDDM Retail – price increasing to 16.8 cents (CPI); 17.5 cents (Exigent)

Proposing to disallow use of detached address labels (DALs) with all Standard Mail flats mailed with simplified addresses (EDDM); therefore, all EDDM flats entered at BMEUs or Retail would have to bear simplified addresses directly on the flats

Standard Mail® Change Highlights 2

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Special Services Change Highlights 1

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Certificate of Mailing CPI Price CPI + Exigent Price

Basic $1.25 $1.30

Firm Book Mailing 0.45 0.47

Bulk: First 1,000 pcs 7.50 7.80

Each Add’l 1,000 pcs 0.90 0.95

5-Digit 0.4129 0.451

Certified Mail $3.15 $3.30

Return Receipt

Requested at time of mailing

Electronic $1.30 $1.35

Green Card 2.60 2.70

Merchandise 4.20 4.40

Requested after mailing 5.05 5.25

Special Services Change Highlights 2

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USPS Tracking CPI Price CPI + Exigent Price

First Class Mail (Parcels Only) Retail $1.00 $1.05

First Class Mail (Parcels Only) Electronic 0.00

First Class Package Service Electronic 0.00

Priority Mail Retail 0.00

Priority Mail Electronic 0.00

Standard Post Retail 0.00

Standard Mail Parcels Electronic 0.22 0.23

Package Services Retail 1.00 1.05

Package Services Electronic 0.22 0.23

Parcel Select Electronic Electronic 0.00

USPS Tracking CPI Price CPI + Exigent Price

Electronic $2.25 $2.35

Retail 2.80 2.90

FSS preparation will be required for Periodicals mailed in DFF Zones

FSS pricing at the bundle level, sack level, and pallet level will be introduced at all entry points

Full-Service IMb® incentive maintained

Periodicals Change Highlights

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FSS pricing to be introduced for BPM Flats

FSS price categories introduced for presort at originating entry, DNDC entry, DSCF entry, and DFSS entry, as well as carrier route presort at originating entry, DSCF entry, and DFSS

No FSS pricing for DDU destination entry

FSS pricing incentives for BPM flats may be introduced after January 2014

Eliminates $0.03 POSTNET barcode incentive for BPM Flats

Retains $0.001 Full-Service IMb incentive for BPM Flats

Package Services Change Highlights

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Key Details

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***All Changes are Proposed until Approved***

Letters (1 oz.) $0.46 to $0.47 CPI $0.47 to $0.49 Exigent

Letters additional ounces $0.20 CPI $0.21 Exigent

First –Class Mail® International Global Forever Stamp (1 oz.) – $1.10 to $1.15

First Class Postcards $0.33 CPI $0.34 Exigent

First-Class Mail® Retail

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Price

change

Key First-Class Mail® Single-Piece Prices

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Current

Price

CPI

Price

CPI + Exigent

Price

Stamp Price 0.46 0.47 0.49

Meter Price 0.46 0.46 0.48

Single-Piece Flats 0.92 0.94 0.98

Single-Piece Cards 0.33 0.33 0.34

Retail Parcels 2.07 2.23 2.32

Save 1¢ on First-Class letters that have postage affixed using: Postage Meter PC Postage Permit Imprint Pre-canceled stamps

No piece minimums No preparation requirement No requirement to report those pieces on a postage statement

NEW: First-Class Meter Rate

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The new price category will be based on incremental weights up to 3.5 oz. Metered pieces claiming the new “Meter Price” will have postage applied

directly to the pieces, and will be deposited as “Retail mail”.

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First 3 ounces in each FCM parcel category still a single price cell

$.18 additional ounce price after 3 ounces

First-Class Mail® Retail Parcels

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Oz. Current CPI Exigent

1 2.07 2.23 2.32

2 2.07 2.23 2.32

3 2.07 2.23 2.32

4 2.24 2.40 2.50

5 2.41 2.57 2.68

6 2.58 2.74 2.86

7 2.75 2.91 3.04

8 2.92 3.08 3.22

9 3.09 3.25 3.40

10 3.26 3.42 3.58

11 3.43 3.59 3.76

12 3.60 3.76 3.94

13 3.77 3.93 4.12

PARCELS

First-Class Mail® Commercial Letters

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Current

Price

CPI Price CPI + Exigent

Price

Mixed AADC

Automation Letters 0.405 0.415 0.435

AADC Automation

Letters 0.384 0.389 0.406

3-D Automation

Letters 0.384 0.389 0.406

5-D Automation

Letters 0.360 0.366 0.381

First-Class Mail® Commercial Flats

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Current

Price

CPI Price CPI + Exigent

Price

Machinable

Presort 0.772 0.782 0.815

Mixed AADC 0.740 0.750 0.782

AADC 0.640 0.659 0.691

3-Digit 0.594 0.602 0.634

5-Digit 0.406 0.4129 0.451

0.208 each additional ounce

Mailers may continue using current preparation standards Residual 1oz and 2oz pieces presented in

the same tray receive the blended price on those pieces

NEW: Mailers have the option of separating out 1oz and 2oz pieces and paying the lower metered rate

Commercial Residual Single-Piece

Letters: Two Options

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Weight Not

Over (ounces)

CPI CPI+E

1 $0.46 $0.48

2 $0.66 $0.69

Blended $0.48 $0.50

Key Details

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***All Changes are Proposed until Approved***

Standard Mail®

Mandated Flat Sequencing System (FSS) Preparation Requirements

Flat mail going to ZIP Codes served by the FSS will require specific ways to sequence, bundle, and place mail on pallets and will be different from current methods

FSS preparation will be different when mailing at non-FSS areas

New FSS pricing Introducing FSS Facility and FSS Scheme pricing for

High Density, High Density Plus and Carrier Route Flats. $0.044 difference between Origin and DFSS Scheme

USPS to offer a $0.001 per piece discount off the DSCF price for those pieces brought to a DFSS in scheme bundles on a DFSS scheme pallet

The discount is an incentive for mailers to enter the mail at a plant where there is an FSS machine

Standard Mail®

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Flats

Sequencing

System

Simple Samples allows you to send trial-sized products to your customers No increase in price Induct mail without unnecessary outer packaging Lower prices offered for higher-volume tiers

Price reduction for Customized Market Mail from ($0.46 to $0.44)

New prices for Every Door Direct Mail (EDDM) – Commercial: EEDM Saturation Flats is $.001 less than other Saturation Flats

EDDM Retail moves to Market Dominant List – price increasing from $.16 to $.168 (CPI), $.175 (Exigency)

Standard Mail®

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Saturation and High Density Incentive

Encourage existing mailers to increase mail volume by rewarding them with a rebate on incremental mail pieces above a predetermined volume baseline Commercial Saturation Mail eligible for 20% rebate Commercial High Density Plus and High Density Mail eligible for 15%

rebate Rebate provided as a credit in the postage account in early 2015

Standard Mail® Incentive

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Key Standard Mail® Prices

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Current

Price

CPI Price CPI + Exigent

Price

Letters (5-D Auto entered at Origin)

0.247 0.250 0.261

Flats (5-D Auto Flat entered at Origin)

0.362 0.368 0.386

Carrier Route (Flat entered at Origin)

0.279 0.283 0.295

High Density/Saturation

Letters (Saturation Letter entered at Origin)

0.189 0.190 0.198

High Density Saturation

Flats (Saturation Flat entered at Origin)

0.201 0.202 0.211

EDDM-Retail 0.160 0.168 0.175

Mobile Technology Promotions Encourages mailers to integrate direct mail with mobile technology using best practices in mobile marketing

Branded Color Mobile Technology Emerging Technology Featuring NFC Promotion Mail Drives Mobile Commerce Promotion

Technology Drives Relevance Leverage the value of innovative direct mail techniques that are less widely used, but have been shown to increase effectiveness of mail campaigns

Color Print in First-Class Mail Transactions Promotion Mail and Digital Personalization Promotion

Promotions Overview

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Leverage Value of First-Class Mail Intended to slow the volume decline in First-Class Mail by ensuring reply mail, transactional mail and First-Class advertising remain a relevant part of the First-Class Mail marketing mix

Premium Advertising Promotion Earned Value Promotion

New Customer Acquisition Provides an extra incentive for new customers to try direct mail EDDM Coupon Promotion

Promotions Overview

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Promotions Details

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Beginning in January 2014, the USPS® will require mailers receiving automation discounts to be Full Service IMb™ compliant

Full Service Intelligent Mail® will be REQUIRED for: Postcards (First-Class Mail® only) Letters, and flats when mailed using:

First-Class Mail® Standard Mail® Periodicals®

Flats mailed at Bound Printed Matter® prices

IMb® Requirements

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IMb® Requirements

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FULL-SERVICE

Intelligent Mail® barcode on mailpiece x

Unique serial number in barcode* x

Intelligent Mail® barcode on trays and containers x

Electronic Documentation (e-Docs) submission x

FAST® Appointment Scheduling x

*Small mailings (fewer than 10,000 pieces) can use the same serial

number for all pieces, if: • Postage is affixed to each piece at the correct price OR

• All pieces are of identical weight and separated by price

Additional information on Full-Service requirements can be found on:

http://www.pb.com/Postal-Information/Intelligent-Mail-Barcode/

What if I don’t move to Full-Service? Non-Automation Rates! I want my Automation Rates! In-house Solution Outsource Fully Outsource Partial Outsource

Options to Become Compliant

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Evaluate Implementation Options

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Fully Outsourced

Mixed:

Services &

Solutions

In House

(with Solutions)

Full Service Discounts

Full Service ACS

(FREE)

NIXIE Processing Careful Planning

Time to Implement Highest Risk

Implementation Cost

Recurring Costs

Control

Database Management Appends IMb Meet Move Update

Physical Mail Production IMb® on mailpieces

Mail Preparation IM® tray and container labels

Mail Presentment Electronic documentation (eDoc)

In-house or Outsource (Mixed or Full) Determine Responsibilities & Liabilities

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USPS® Feedback Start-the-Clock ACS® data Mail data quality reports

1. Review https://ribbs.usps.gov for critical technical information 2. Obtain Mailer ID through USPS Business Customer Gateway 3. Communicate your MID to your Mail Services Provider OR, 4. Enter your new MID into your Mailing Software 5. Create Your Intelligent Mail® barcode in Mailing Software 6. Utilize Mailing Software to prepare to submit eDoc to USPS 7. TEM TESTING – Submit test mailing e-documentation to the USPS for each type of

mailing you may prepare for approval – Add an Intelligent Mail® Barcode to your Mail Piece Layout in Document Composition software. NEW! With TEM approved software, you can bypass TEM Testing.

8. Print mail pieces or export mail list Intelligent Mail® barcode Mailing 9. Print IMb Tray/Sack, and Container Labels 10. Submit Postal documentation electronically – Mail.dat or XML – PostalOne! or

Postage Statement Wizard 11. Watch Mailer Scorecard for verification results

Steps to Implementing Full-Service

Intelligent Mail®

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https://ribbs.usps.gov

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NEW! Full-Service Intelligent Mail®

Webinar Series

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https://ribbs.usps.gov/index.cfm?page=intellmailpresentations

Timeline for Implementation*

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Obtain CRID/MID

Week 1

Software purchase –

Week 2

Install Software – Train IT/Staff – Implement and Test Software Week 3

Set up Software with MID/CRID

Week 3 - 4

TEM Processes -submit Full service

test files through TEM – USPS Postal One

Week 4 **

Test for Each Type/Class of Mail needs to be

generated & submitted; i.e.; First-Class Letters,

Flats, Standard Mail Letters, Flats, Periodicals.

TEM TESTING – USPS Postal One

Portal Weeks 4 – 5 Plan for multiple testing

Back & Forth

TEM Full-Service (FS) Authorization

Week 4 - 5

Create mailing with

IMb in software

Week 6

Create IM Tray/Sack & Container Labels

Print/Produce Mailing

with IMb

Submit E-documentation – mail.dat, XML, or

Postage Wizard

Schedule FAST appointments if needed

* Estimated time

only, results will

vary

** Plan for USPS approval time

and resubmission if necessary.

Can bypass TEM by using

software previously approved

by USPS

Decide Outsource (full or mixed) or Handle In-house If Outsource, determine responsibilities and manage relationship If In-house, start by familiarizing yourself with https://ribbs.usps.gov NEW! Full-Service Webinar Series

Review approved software vendor list and select software

Apply for your MID at https://gateway.usps.com

Find Technical Guides and tools at https://ribbs.usps.gov

Prepare to use eDoc

Test through TEM if needed

Monitor Mailers Scorecard

Full-Service IMb® Checklist

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Ann Daley Vice President, Government & Regulatory Affairs, Pitney Bowes ann.daley@pb.com

Questions?

Alison Hall Director of Client Services, Direct Mail Solutions, Pitney Bowes alison.hall@pbpresortservices.com

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THANK YOU.