Franking machines are one of the most expensive methods of sending post. Although convenient, stakeholders within organisations don’t truly understand the hidden costs and the savings opportunities of other postal methods. The postal administrations and the franking machine suppliers aren’t keen for you to change away from franking machines because it’s a $45B per year industry!
As independent, impartial print & postal industry experts, Altus is solely working on behalf of our clients or prospects with the ambition to utilise our professional services to reduce their print and postage costs significantly. One way that we do this is by educating our community about franking machine usage.
100 Years Since the First Franking Machine was Manufactured!
Franking machines (previously postage meters) have been around for more than 100 years. Although they can be convenient, there are much more efficient and less expensive ways to send your post in 2020.
Purpose of this article:
We have written this blog to get you to think about your use of franking machines. Although some procurement specialists and other business resources believe that postage is often a requirement even in the digital transformation age, we at Altus can help you look at things differently. Why? Because our alternative print and postage solutions could drive significant six or even seven-figure recurring savings.
The Franking Machine Global Industry
Pitney Bowes manufactured the first franking machine in 1920. Since then, several other suppliers have entered the market. The global postal market, specifically the franking machine market, is a global industry that few know much about.
The Top-Line Numbers are Huge
- $45bn (yes, billion!) spend globally per annum on postage via franking machines.
- Franking machine supplier revenues exceeded $10bn in 2019 alone.
Who wants to change away from franking machines?
Well, I can categorically tell you who doesn’t want you to change. Two main players, the franking machine suppliers and the postal administrations, Royal Mail in the UK.
Why would franking machine suppliers and the postal administrations not want organisations to change?
- As you credit the machine up-front, the postal administration receives your monies before you even post anything.
- Using franking machines is the second most expensive way to pay for postage – behind only stamps.
- The franking machine suppliers typically tie you into 5, or 7-year contracts.
- The ink required for franking machines is the most expensive ink in the world – did you know it costs on average 3p, or 5¢ per letter, packet, or parcel to attach a postage impression?
- The franking machine life is often 4 or 5 years; therefore, you need to budget for CAPEX continuously.
- Complex licenses and contracts from both franking machine suppliers and postal administrations – making it difficult to switch to an alternative mailing solution.
Two Case Studies
To highlight the value of effective postal optimisation and to illustrate the savings opportunities, we’ve put together two case studies from our recent clients. We work with organisations large and small so we’re sharing the specific details of two projects from varying sizes.
Case Study 1 – Major UK Bank
These are the figures from our migration of a major UK bank away from franking machines. We managed the entire migration process and delivered £3.97M to our client.
Before Altus Engagement
Total combined annual cost of franking machine & postage = £12.374M
After Altus Engagement
Total cost of postage = £8.4M
Total savings delivered to client = £3.974M
Case Study 2 – Major UK Retailer
These are the figures from expert work with a major UK retailer. We migrated this retailer to a new postage solution from franking machines usage. This project delivered £198.8k.
Before Altus Engagement
Total combined annual cost of franking machine & postage = £303k
After Altus Engagement
Total combined annual cost of franking machine & postage = £104.2k
Total savings delivered to client = £198.8k
This Is Where Altus Can Help
Migrating from franking machines to an alternative mailing solution can be a complicated transition. At Altus, we are experts in this transformation, and we will also lead the decommissioning phase and deliver the postage credits back to your organisation.
We specialise in everything from baselining the current state, designing, and implementing a new, improved postal solution. We will keep you informed throughout to we maximise the savings for you.
To discuss how we can help, please contact us today on 0845 603 7336.
Email us on firstname.lastname@example.org