The Multiplier Effect of the Postal Weight Limit Discount

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Direct mail is the world's largest advertising medium. Maybe it's less glamorous than the Internet, but it is growing in measurable dollars and net return as never before.

The mailing list is the key to reaching the market. List brokers facilitate the growth of selective, targeted mail as well as cooperative mailing and package inserts. More and more list brokers realize that in today's business environment they must partner with their clients in unique ways. One way to do this is to support efforts to lower the cost of the mailing piece, thereby enabling the client to afford to mail to more targets and expand list sales.

You may have noticed that despite e-mail and private competition in the last decade, the U.S. Postal Service has had lower rate hikes relative to inflation with more time between increases. This is no accident. The USPS has recognized the multiplier impact of mail and is working with groups like the Advertising Mail Marketing Association to increase mail volume.

Direct mail has to compete with print, television, electronic messaging and other media. But what these other businesses may not realize is that the USPS is beating them for their targeted business.

Today, the USPS knows and acts on the knowledge that per-piece mail should be viewed with regard to its contribution to USPS overheads and profits. Certain types of mail produce a much greater rate of return for the USPS than do others. The most important is the often-maligned advertising mail.

The AMMA has worked with the USPS to increase the weight limit discount on automated letters from 2 ounces to 2.5 ounces, then 3 ounces and most recently 3.34 ounces. As a result, the USPS experienced a volume increase. The AMMA is in discussions with Allen Kane and Michele Denny at the USPS to get the weight limit discount increased to 3.5 ounces or higher. Obviously, increasing the heavy letter weight limit discount to 3.5 ounces will capture more business to continue this trend.

The key is the automated letter and its subsequent contribution to the mail stream. If we do our business right and target well, the USPS receives a multiple response that feeds on itself.

A successful letter will produce one or more immediate responses and a lifetime of future responses if we are serious about relationship marketing.

Standard mail is the locomotive that drives the freight for all other classes. One successful member recruited through the mail can produce up to 50 varied first, standard and parcel mail pieces. Others will be generated through list rental activity. This list rental will add other multipliers. Finally, our success in the mail encourages more prospecting in the mail. The multiplier multiplies! The USPS wins either way but obviously has a vested interest in assisting our member recruitment with low, predictable prices in standard mail coupled with effective, timely delivery.

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