Rate Increase May Take Effect Jan. 19, but DMA's Cerasale Says Chance for Delay

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ORLANDO, FL -- The Direct Marketing Association is hearing that postal rates will increase as soon as Jan. 19 if things go according to plan, Jerry Cerasale, senior vice president of government affairs at the DMA, said yesterday.


However, several factors still could influence that date, Cerasale said during a session on how to mail smarter at the Annual Catalog Conference, including the fact that several groups have raised concerns over settling the current expedited rate case, which would increase rates 5.4 percent across the board. Those groups include the American Postal Workers Union, the American Bankers Association, the Consumer Advocate of the Postal Rate Commission and Valpak.


Also, the U.S. Postal Service is doing better than postal officials expected and, therefore, may be able to reduce the proposed increase or delay it until later in 2006. With or without postal reform, another rate case will likely be filed next year to take effect in 2007, Cerasale said, and would be in the 4 percent to 5 percent range. If the current rate case doesn't go through as proposed, that next case would be more than 10 percent, he said.


During the session, Dean Wimer, executive vice president of manufacturing at Quebecor World, offered tips on how to keep mail costs down. Among them, he suggested that catalogers:


· Use a multiplant production plan to reduce cycle time and distribution costs.


· Reduce a catalog's weight to 3.3 ounces or less, adjust trim size or use lighter-weight paper and design the order form as a page in the catalog instead of as a bind-in.


· Maintain good list hygiene by updating mailing lists by using the USPS' National Change of Address service, regularly de-dupe in-house files and merge/purge each mailing.


· Focus on the "inactive" file by creating a strong reactivation offer, determining how many times to mail, testing a "last chance" cover version and asking customers whether they want to continue receiving catalogs.


· Prospect strategically by testing a "refer-a-friend" incentive and make sure every catalog order is traceable by source -- either mail, Internet, phone or fax.


· Co-mail to reduce postage costs by marrying multiple catalog titles on a binding line and within carrier route pre-sorted mail bundles.


Eric Schmidt, catalog sales executive at Quebecor, said co-mailing can help smaller catalogs obtain greater SCF drop-ship penetration and postal discounts while getting more accurate in-home delivery dates.


All catalogs that co-mail must be the same trim size and the ink-jetted information must be in the same location. Schmidt said the ideal co-mail candidates are midsized catalogs that mail monthly and are flexible with their design and annual schedule.


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