3 ways to offset the postal rate increase

Postal rates increases are nothing new. Marketers have faced annual postal rate increases since 2001 (and before that, every few years since the early 1900s). However the most recent increase, which went into effect January 26, 2014, is the highest we’ve seen in a while. Postage rates on first-class letters increased by 3 cents, and almost every class of mail increased 6% to help the financially ailing U.S. Postal Service (USPS). Of course, while the price hike was positioned to increase revenue for the USPS, it might have the opposite effect – lower revenue. This is due to price elasticity, which applies to many products: when the price goes up, the users will buy less, resulting in lower overall revenue. While the impact of the recent rate hike depends on your mail volume and frequency, there are ways to overcome it. With the rise of direct mail costs, here are a few ways you can leverage your online and offline data and streamline processes to offset costs.

Saturate carrier routes. This is an easy way to leverage postage discounts. You can use Epsilon’s TotalSource Plus (TSP) to supply add-a-name pools, if needed. The USPS offers greater discounts when certain requirements are met.  If a mailing meets the requirements for standard mail and the criteria below, it can qualify for lower pricing.

  • Be part of a single mailing of at least 200 pieces or 50 pounds of carrier route mail.
  • Be properly sorted to carrier routes and sequenced.
  • Bear a delivery address that includes the correct ZIP Code or ZIP+4 Code.
  • The addresses must meet high quality standards.
  • Be automation-compatible and bear a delivery-point barcode for some prices.

By adding names into the process from TSP to meet the minimums, the cost of the additional pieces can be offset by the reduction in overall costs.

Enhance your housefile with channel preference flags to create a targeted contact strategy. Consumers’ preferences differ regarding contact methods.  Flag your records with channel preference data based on consumers’ historical purchase patterns. If a consumer prefers to receive communication through the mail, then send mail to them.  But if they like to communication online, use that channel instead. You should also ask customers how often they want to receive communications from you to achieve the ideal cadence.

Onboarding. There are a number of steps you can take in the online space. For starters, you can reach your customers and prospects on social channels such as Facebook and Twitter. Or you can convert your email file into cookies and target customers with banner ads. Onboarding is the process where we can convert information based upon your customers name, address and/or email address into a linkage to a cookie of their browser. This enables you to use the data about your customers to reach them through targeted banner advertising. This may not replace direct mail, but it certainly can improve the efficiency of reaching your customers.

As previously mentioned, postal increases are not new. And we will continue to see increases in the years to come. There’s no question that direct mail is alive and well today, and we expect that it will continue to thrive. However digital marketing is also growing in importance. When combined with direct mail, digital marketing can increase efficiency and produce better results.