As many readers know, I have been publishing various research studies on behalf of three or four national trade associations for more than 25 years. Most of these studies have been published for NAQP and have dealt with subjects such as industry pricing, wages and benefits, bindery services, and my own favorite, financial operating ratios—which we now refer to as financial benchmarking. I have, however, published studies for two other industries as well—the mailing services industry and the reprographics industry.
My most recent study is the 2010-2011 Mailing Services Pricing Study. I began publishing this study in 2002 at the request of a small association (no longer active) called the Southeastern Mailer’s Association. I have published five editions of it since that time, and by the time you read this I will have released the sixth edition.
However, before I provide you with you some details gathered from this recent survey, I want to share with you something that I experience every time I publish a study, regardless of the industry. As a general rule, we (or the sponsoring organization) make it a practice to provide a free copy of the study to every company that participates and returns a completed survey by the published deadline. We typically receive 300-400 surveys for one of these studies. Approximately 70% are submitted electronically, while the remainder arrive by mail.
General Profile of Mailers
Thanks to the joint sponsorship of Quick Printing, the Mailing Fulfillment Service Association (MFSA), and Mailing Systems Technology, we not only received a record number of responses, but the data came from a broad cross section of companies that offer mailing services. These sponsors bent over backwards to help me in every way they could to provide the best mailing lists possible. As a result of their efforts, we heard from a broader range of firms providing mailing services than at any time in the past. This year’s pricing study represents the most diverse list of participants we have ever received and, as a result, we have been able to paint the best picture possible of real world pricing practices in the mailing industry.
While the reason for using certain selection criteria is explained in greater detail in the final study, suffice it to say that to qualify for inclusion in our database, firms had to report annual 2009 sales between $200,000 and $40 million. Yes, that is a broad sales range, but we had many additional companies outside that range that submitted surveys as well. However, for various reasons, we felt their data would distort rather than help build a true picture of the industry. Companies had to mail a minimum of 10,000 or more pieces per month for their pricing to be included in our database. Companies falling outside our data limits are still entitled to a free study, but we chose not to use some or all of the data they supplied.
As a result of including companies with annual sales of $15-$40 million, the average annual sales increased substantially over what has been reported in the past. However, while the reported average annual sales of participants increased significantly, most of our other key ratios, including overall pricing practices, remained relatively similar to what has been reported in the past. If anything, the result of including many of these larger firms that would have been excluded in the past has resulted in a report far more reflective of industry-wide pricing practices.
In order to provide an even more accurate analysis of pricing trends among all sizes and types of printing and mailing firms, we decided that for the first time we would subdivide our pricing report based upon the reported dollar volume of annual mailing sales. As a consequence, we provide three major breakouts for virtually every pricing operation covered by the latest mailing survey:
• All Companies: Sales $200,000 to $40 million, minimum 10,000 mailing pieces/month
• Small: Annual mailing sales \
• Large: Annual mailing sales \>=$400,000
Each pricing breakout in the study includes average and median total prices for each quantity specified, a high/low range, and an average and median price per thousand. Those prices are, in turn, broken down into a price per piece.
To give you a better idea as to the type of data these breakouts produced, we offer the following profile of our participants broken down into three categories:
ALL FIRMS AVERAGE MEDIAN
Annual Sales 2009 $3,076,072 $1,225,000
Sales Projections 2010 $3,111,741 $1,200,000
Sales Per Employee $119,495 $105,641
% Income from Printing
& Copying 68.4% 86.9%
% Income from Mailing
Services 31.6% 13.1%
Pieces/Month 1,392,649 100,000
Typical Market Basket** $2,962 $2,666
SMALL FIRMS* AVERAGE MEDIAN
Annual Sales 2009 $1,100,307 $737,369
Sales Projections 2010 $1,125,164 $750,500
Sales Per Employee $110,648 $100,000
% Income from Printing
& Copying 93.4% 95%
% Income from Mailing
Services 6.6% 5%
Pieces/Month 44,936 26,000
Typical Market Basket $2,874 $2,673
*Firms reporting annual sales from mailing services
LARGE FIRMS* AVERAGE MEDIAN
Annual Sales 2009 $6,708,980 $3,597,644
Sales Projections 2010 $6,731,646 $3,750,000
Sales Per Employee $132,826 $110,395
% Income from Printing
& Copying 32.8% 20%
% Income from Mailing
Services 67.2% 80%
Pieces/Month 5,729,071 1,000,000
Typical Market Basket $2,880 $2,645
* Firms reporting annual sales from mailing services
** Market Baskets uniquely track a collection of products and services and then total the results to allow comparisons by size of firm, geography, population density, and sales.
Sample Pricing for Services
The 2010-2011 Mailing Services Pricing Study provides prices for approximately 40 of the industry’s most popular mail processing services, including de-duping, laser letter merging services, perfect matching, insertion charges, and inkjet addressing. In most cases, prices are provided for seven different quantities—1,000, 2,500, 5,000, 7,500, 10,000, 25,000, and 50,000.
Average and median prices are provided for total quantities, as well as price per thousand and unit prices. This makes it easy to analyze one service or quantity and compare it against another.
While space doesn’t allow for the detailed specifications for each service covered, we thought it would be interesting to offer a glimpse of prices taken from three of our “Market Baskets.” The prices below are averages. Actual Market Baskets provide both average and median pricing, and each Market Basket is paired with a profile of companies represented by each basket.
SERVICE ALL SMALL LARGE
Minimum Processing Fee $191 $71 $167
Auto De-dupe List 25,000 $171 $193 $102
Mail Match Letter/Envelope
5,000 $409 $309 $360
Inkjet Addressing 25,000
Letter Mail $226 $245 $186
Apply 2 Tabs to Letter Mail $173 $207 $125
Availability of Study
The latest Mailing Services Pricing Study was published and mailed on August 20 to all qualified respondents. If you believe you participated but did not receive your copy, please email email@example.com. Please be prepared to fax a copy of your original survey (per rules of participation) if requested. The study can be ordered using the order form appearing in this issue of Quick Printing or at www.quickconsultant.com. The price, including shipping via Priority Mail, is $175.
My Latest Rant
Now that I have provided you with information from this survey, I want to share a rant about what I experience every time I publish a study. As a general rule, we provide a free copy of the study to every company that participates and returns a completed survey by the published deadline. We typically receive 300-400 surveys for one of these studies.
Completing one of these studies is not everyone’s cup of tea. Why? Because, by their very nature, they require a lot of effort. Participants provide answers to 150-180 questions, most of which require calculations. Those who make a sincere effort to complete these surveys, or even a good portion, and who return them by the deadline, are rewarded with their own free copy of the final study—not an abbreviated copy, but a complete copy.
What drives me up the wall, however, are not the casual mistakes, such as the misplacement of a decimal point, but the relatively small number of participants who intentionally try to fake it by providing totally irrelevant numbers. Why do they do this? They are trying to get a free copy without doing any real work! Instead of taking the time to enter all the data like their peers, a few owners will complete the first page and leave the remainder of the survey blank, hoping that their surveys will still be accepted. They aren’t.
The worst offenders think they are being clever, and enter the same dollar amount for every question or series of entries. Do I catch every company attempting to pull a fast one? Nope, but I thoroughly enjoy catching those that I do. So, to the jerk who submitted a survey that contained 25-cents in every answer block or the guy who filled out the first 10 questions and then left every remaining question blank, I want you guys to know that you won’t be receiving your free copy of this study!