For many Print Service Providers (PSPs) staying profitable in an increasingly competitive market is an ongoing challenge. For owners and operators, the path to profitability lies in two areas: diversifying service offerings and embracing automation technology.
One of the biggest opportunities in the industry to drive new revenue is high-value mail services or transactional mail. It is estimated that only 3 percent of PSPs are qualified to offer these services that can be up to 5X more profitable than traditional print jobs like direct and promotional mail. Offering transactional mail services in key verticals can help you gain incremental revenue streams by:
• Driving brand new revenue streams with existing customers
• Enabling opportunities to acquire new customers
• Increasing your mailing profit margin
What do you mean by high-value or transactional mail?
In this case, high-value mail encompasses business-to-consumer mail, such as documents and notifications that contain sensitive non-public information like protected health information (PHI), personal identifiers, and financial statements.
What type of organizations or industries offer the best opportunity?
Key verticals for high-value mail include healthcare, finance, insurance, and law firms. These sectors require stringent compliance with state and federal regulations such as HIPAA and Sarbanes-Oxley, to name a couple, making them willing to pay premium prices for secure and reliable mail services. Many of these verticals outsource these mailings to print service providers classified as an automation document factory (ADF). An ADF is a print service provider who not only has the technology to provide that chain of custody, but also the required credentials and certifications.
What are the benefits of high-value mail?
- Higher profit margins: Transactional mail normally nets higher profit margins compared to traditional promotional mail. While promotional mail yields thin margins of 1-7 cents per piece, high-value mail can generate a minimum profit of 30 cents per envelope. Why? Because these mailers are willing to pay a premium for the mailing chain of custody service, as there are stiff penalties for privacy breaches.
- Recurring Revenue: High-value mail typically involves long-term contracts (1-5 years) with guaranteed minimums, providing predictable and consistent revenue streams.
- Business Valuation: By incorporating high-value mail services, PSPs can enhance their business valuation, an essential factor for future growth.
Overcoming entry barriers
Revenue growth alone is insufficient if your operating costs are escalating proportionally. Investing in automation technology is a strategic move to lower variable operating costs and enhance profitability to best position your business for success.
1. Technology:
Many PSPs struggle with legacy equipment that fails to keep pace with increasing volumes, leading to higher payroll costs and reduced profit margins.
Legacy inserter machines suffer from inefficiencies due to time-consuming setup processes and limited capacity. A modern, compact, yet high-performing inserter can help you run jobs more quickly and efficiently and shoulder the additional mail volume.
2. Sales Training:
Quadient provides comprehensive sales training to help PSPs target the right clients and effectively pitch high-value mail services. This training covers cost justification, proposal preparation, and the nuances of selling to regulated industries.
3. Credentials:
Quadient has a purpose-built offering to support PSPs in entering the high-value mail market. This package includes affordable software and hardware technology, enabling rapid return on investment. PSPs can also leverage Quadient's credentials for high-value data processing, covering HIPAA, HITRUST, ISO certifications, and more.
By diversifying into high-value mail and investing in more nimble mailing solutions, PSPs can achieve higher profit margins, secure recurring revenue, and scale for future growth. Karim Manassa, Business Development Manager for Quadient takes a deeper dive into this opportunity and shares his expert advice in his recent presentation: How PSPs can improve financial performance with document automation technology. Learn how you can optimize and maximize your production mailing operations with secure and compliant solutions.
This presentation and others are available for a limited time on demand. To learn more about how you can rejuvenate your business processes visit Quadient Connects platform. Choose from over 60+ complimentary sessions, demonstrations, and insights from more than 40 digital transformation experts. With topics from mailing solutions to customer communications management and document and finance automation, there is no limit to what else you can learn and achieve.
