A Sample in Every Mailbox
Going where UPS and FedEx can't go
Postmaster General Patrick Donohoe says that the biggest blow to the USPS's bottom line (besides having to fund healthcare for government workers) is a significant falloff in First Class mail. To pick up the slack, USPS has been introducing value-added mailing services of interest to direct marketers, the latest of which is a new flat-rate sampling program called Simple Samples.
The program presents four sampling options to product marketers under a simplified pricing scheme. Flat rates are offered for two package sizes: small (4 x 6 x 1.5 or under) and large (max of 9 x 12 x 2). They can be targeted to individual names and addresses or delivered to every door within designated postal routes and Zip Codes. Marketers choosing the targeted option provide the Post Office with a list or customer database and pay a little more for the service. Costs per piece range from 26 cents per piece for small samples going to every door to 40 cents for targeted large packages.
“We're trying to bring the costs down on sampling through the mail to the point where the marketer says, ‘Hey, I've got to give this a shot,” says Marc McCrery, the USPS's brand manager for shipping. “Plus you can add a redemption vehicle, measure response, and get a fix on ROI.”
Despite all the new routes to customers afforded by technological advances, sampling remains a favorite tool of marketers because it's so effective. A study from Arbitron found that 30% of people receiving samples in retail stores purchased the product before leaving, and that 58% said they would purchase it again. In-store sampling, however, is an expensive proposition, involving demonstration companies, insurance, and retailer compliance. Mail is cheaper, and the USPS aims to make it cheaper still.
No minimum quantities are required per route to qualify for the Simple Samples rates, while volume rates apply. The Postal Service discounts one cent per piece for every additional 200,000 pieces mailed. Bags and boxes can be sampled without any outer packaging, though marketers are free to include it at their discretion. No handling fees apply if samples are dropped off at Post Offices covering the routes to be sampled.
“There are two things we attempted to do with this program: simplify the prep work for marketers and lower the cost to justify them putting it in their budgets,” McCrery says.
The Postal Service introduced the service nationwide last month without any testing, so it does not have beta test results or case studies to share. McCrery says, however, that several product marketers are conducting their own tests using the program.
From a strategic viewpoint, expansion of sampling makes sense for the USPS. Sampling door to door is not within the cost parameters of UPS or Federal Express, leaving this specialized marketing channel the sole province of the Postal Service. “We are able to offer a point of use where we feel a lot of companies would like to sample—in the home,” says McCrery, floating the hope that the Procter & Gambles and Unilevers of the world will be coming his way with millions of little boxes of toothpaste and laundry detergent.