Cover Story: Sprint Saves Green
Keanon Swan wants to help Sprint push the envelope on green direct mail. Yeah, he went there. But he's serious about this, says the manager of Sprint's vendor management and postal strategy.
Swan, his colleagues and outside vendors not only got an environmentally friendly direct mail campaign off the ground in 2012 at Sprint, it's become the way the Overland Park, Kan.-based communications company bills 9 million—65 percent—of its wireless customers each month. And now, Sprint sees $500,000 in savings a year due to postage cost and paper reductions. "The reduced ecoEnvelope weight allows for postage savings and revenue generation opportunities," Swan says. "There are many opportunities that have come with this new envelope format that we're continuing to explore."
Sprint's green mail program evolved from an idea—spurred in May 2008 when Swan spotted a "cool" envelope that could be ripped in half to create a new, smaller envelope—to full implementation in June 2012. Swan spent those four years making sure the dream could not only live, but grow.
That meant getting buy-in from departments throughout Sprint, involving outside partners, performing equipment tests, conducting focus groups and launching direct mail pilot programs. Excited, he right away tested the envelope, designed by ecoEnvelopes of Eden Prairie, Minn., on Sprint's high-speed mailing equipment. While it worked well, Sprint still had to complete equipment changes to handle mail related to a 2005 merger. At the same time, Swan had to deal with increased direct mail and postage costs amid a declining economy and, not least of all, transition from an internally managed print and mail shop to partnering with a mail service provider, Kansas City, Mo.-based DST Output, in June 2009.
"Our organization was operating in a very entrepreneurial manner, where we were constantly, no pun intended, pushing the envelope to be more innovative; whether it was getting our first inserting equipment online, developing our quality control programs, etc.," Swan says. "When we transitioned into more of an operational management mode, we wanted to make sure we didn't lose that edge to look for ways to reduce costs, to improve quality—while, at the same time, making sure we were mitigating our environmental footprint."
That's why in August 2010, Sprint partnered with McClellan, Calif.-based technology services company SumRall Solutions, Tension Corp. and ecoEnvelopes to help the idea of a two-in-one envelope take root.
"I believed we could be change agents within our industry," Swan says.
The Seed of an Idea
It was love at first sight. At MAILCOM 2008, held from April 29 to May 2, 2008, in Atlantic City, N.J., Swan saw a way to make green mail a reality at Sprint. He got a hands-on look at ecoEnvelopes, or reusable envelopes (Check out this slideshow for Sprint's version of the ecoEnvelope).
Gale G. Ward, president and general manager of ecoEnvelopes, still remembers seeing Swan approach her booth that was all the way at the back of the exhibit hall. "As Keanon made his way down the aisle, he was followed by a wake of executives from companies selling insertion equipment and stopped to explore [the] new two-way ecoEnvelopes. There were eight or 10 executives gathered in our booth discussing [the envelopes]. As he looked at our ecoEnvelope, Keanon's comment was, 'Look at this. It's beautiful … [The outer envelope looks] the same as what we are mailing today.'"
At the time, Sprint sent its customers their bills in an outer envelope with an invoice and a return envelope enclosed.
"What we needed to do was create what I called a two-to-one-to-none or two-to-one-to-e," Swan says, adding that there's a general trend among consumers toward e-bill adoption.
While many direct marketers, including Sprint, are incentivizing their customers to switch to electronic bills, Sprint wants its customers to have the choice to receive direct mail if that's the channel they prefer, Swan says. That's why he wanted to offer Sprint customers a "more responsible" choice.
"I thought, 'Well, instead of sending two envelopes, why don't we send one?'" Swan explains, "because [often] customers [who receive bills by direct mail] pay electronically, anyway. So why are we sending a remit envelope?"
He knew it would be a big step for Sprint, with its 56 million subscribers and nearly $7.3 billion in wireless service revenues during the third quarter of 2012.
"The timing had to be right," Swan says. "So while reusable products aren't new, reusable products in this space—that convert from the 6x9 size down to a #10 that allows you to eliminate the remit envelope—that's the piece where we had to crack the code. … Because that's the part that hadn't been done before."
So Swan believed he was onto something. "We could reduce our paper demand and engage our customers in the process—by providing them with something that none of the other wireless carriers were providing—and perhaps even create a bridge as they contemplated going paperless."
It was a belief that would have to sustain him for a couple years before he could work full-force to make the dream a reality.
"As soon as I returned from that conference, I wanted to see if a product like this would run on high-speed equipment," Swan says of testing the envelope at Sprint's facility.
It worked. But then a couple situations got in the way of moving full-speed ahead.
Although it was 2008 and three years into the merger, Sprint was still in the middle of transitioning print mail functions. Then Sprint transitioned its print/mail shop management to DST Output.
With so much going on, the timing wasn't yet right for green mail.
Finally, in August 2010, Sprint struck a deal with SumRall, Tension and ecoEnvelopes. The arrangement was part of Sprint's paper reduction strategy and, as a result, Sprint lightened its form paper weight from 20 pounds to 18 pounds and its envelope paper weight from 24 pounds to 20 pounds.
"That helped reduce our paper purchase," Swan says. Six months later, "once we had all the groundwork in place, we kicked off the ecoEnvelope project."
From January to October 2011, Sprint "ramped up, designed, refined, tested, got all the approvals from 12 external organizations and eight internal organizations," and watched the green mail idea find solid ground.
Watching It Grow
In January 2011, Swan worked with the outside partners to create envelope samples. He already knew, based on engineering and operational checks, what the envelope's physical limitations were and he was ready for feedback. Swan started bringing the envelope prototypes around to various internal departments to get input from stakeholders as diverse as brand, collections, corporate responsibility, legal, supply chain management, marketing and IT.
"That was the fun part about it, because it built lasting relationships across the company," Swan says.
If he ended up needing help, for instance, with using an icon or a graphic in a particular way, he could go talk to brand about it and find a solution.
"Our corporate responsibility team was actively engaged and they were very early partners in this," he says. The team suggested the envelopes have the environmental claim in green, "and that was the first time Sprint had ever used an external 'green' message on a billing statement or on an envelope, which is pretty interesting when you think that Sprint is currently ranked No. 3 on Newsweek's "Green Rankings" … This was an opportunity to really show our customers a key example of Sprint's commitment."
In August 2011, Sprint conducted eight focus group meetings to gauge end-user sentiment on the new envelopes. Swan says he learned that some customers will always want printed bills, because they use "their envelope as a filing cabinet within a filing cabinet." Members of those groups overwhelmingly said to use the old billing envelopes to include notice of the upcoming envelope change and instructions for its use, but just immediately prior to the update—or a month before each customer received the new envelope.
The initial comments, though, were the most telling.
"Their first reaction was, 'Oh, you're just doing it to save money,'" Swan says. "Well, yes. We will save money. But there's also an environmental savings here, as well. And when we told them that we were willing to make an investment to do this, that kind of took them back."
Swan says his main concern, polished to a gloss during his 23 years at Sprint, was that the final version of the envelope work in the machines. "It runs the same way in the equipment, and that's one of the things that I was an absolute stickler for, because of my operations background. We want to inspire others to adopt it, so it can't be too difficult to implement."
Testing, Testing, 6x9
Sprint's marketing and collections teams had weighed in on which wireless customers should receive the new, lighter bills in thepilot program.
"We selected a segment to pilot test with our customers," Swan says. "It was one cycle that met the characteristics of our baseline customer demographic."
Once Sprint found customers who fit the bill, 300,000 received a notice in September 2011 that in October 2011 they'd see the new envelopes.
Swan says the three-month pilot received another lucky break: Sprint sends bills to different batches of customers based on monthly billing cycles.
"It just so happened that we had an entire cycle that met that criteria," Swan says of the mid-month test group. "So we were able to mail to an entire cycle without having to segment within a billing cycle."
Swan also wanted to make sure customers understood the process, so he set up safeguards. Sprint watched for "white mail," or an unusually high number of customers using their own envelopes to return payment—perhaps indicating that they'd gotten frustrated with the new envelopes. Plus, Sprint looked for changes in e-bill adoption, which might also indicate customer confusion.
"We had outbound survey calls scheduled in month two to get customer reaction," Swan says. "And, for those pilot customers, the month prior to mailing, we [sent a full-page insert with the bill about] 'how to use' and links for customer reference and education.' We stood up our support site, where customers could access information and see a video that also briefly showed them how to use the ecoEnvelopes."
In December 2011, the test came back positive. Customers had no "adverse" reactions, according to the feelers Swan had in customer service, collections and operations, among others. Swan says he was even monitoring remittance centers, Tension, DST Output and the U.S. Postal Service's experiences.
"We really went to exhaustive lengths to ensure that everyone knew this was coming and that our customers had the resources to be able to self-solve or get support through our care teams," Swan says.
Out of the Greenhouse
With the 300,000 members of the pilot program still receiving the new envelope, Sprint started phasing in the ecoEnvelope for the rest of its wireless subscribers using paper bills.
Swan says beginning in April, Sprint started mailing the ecoEnvelopes to customers in six or seven billing cycles each month, bringing the program to full production in June 2012.
Along the way, Sprint chose to participate in the USPS "Reply Rides Free Incentive Program" and the "2011 Mobile Barcode Promotion," adding "significantly" to that $500,000 a year in postage and paper reduction savings.
Jeff French, Tension's director of strategic accounts, says: "Sprint, ecoEnvelopes, Tension and DST Output share the philosophy that the monthly bill is more than a request for payment—it's a monthly appointment with a customer. Sprint knows it's an opportunity to cross-sell, upsell and reinforce its brand image. With a sophisticated approach, a transactional mailing can be turned into a direct mailing—and that's a real win for our customers. By using a two-way envelope, Sprint gets the end customer involved with its sustainability initiatives."
Swan says this green mail program is in the black because of a can-do attitude, despite some initial negativity—or references some made to failed attempts in the past.
"This product has proven that we're up to the challenge, with innovative and operational excellence in those areas," Swan says. "We built measurements, designed focus group criteria and customer support tools. We developed great internal and external relationships and were engaged in every aspect with our partners. … And once you can convince folks that being fearless will pay off and it'll be good for the customer, it'll be good for the environment, it'll be good for business—that triple bottom line—and the fact that it's fun and cool, it starts to change things."
Fearless, huh? Maybe Sprint and Swan aren't done pushing the envelope.