Every postal rate increase poses another challenge to direct marketers. Rates rise, and volume falls to offset the increase per piece. Marketers need to increase response rates while mitigating cost increases. One of the greatest challenges is balancing a robust testing program against rising costs for producing and mailing control packages.
Mailers should begin with an evaluation of current packages to ensure opportunities for savings are being realized with all components and processes in the mailing. Commingling may represent dramatic savings opportunities for your program in both cost and time to market.
Postage is not a fixed cost. Your vendor’s ability to process, sort and transport mail to its destination affects your postage cost. The less the U.S. Postal Service has to handle the mail, the bigger the discount. And mail will arrive faster, letting you focus on in-home dates.
Combining or co-palletizing mail allows for destination entry discounts for drop shipments to BMCs and SCFs. Commingling combines programs from multiple mailers into one mailstream, increasing SCF penetration and enhancing the accuracy of test panels since they become part of the control package mailstream. Commingling upgrades your tier qualification and provides destination entry discounts.
Commingling is effective because of USPS requirements to achieve 5-digit discount rates. To qualify, mailers need a minimum of 150 pieces per ZIP code. Commingling improves the chance for ZIP codes to attain the 150-piece threshold. Here’s what happens in a typical mailing:
o 3-cell mailing with 150 pieces total for ZIP code 03458.
o 50 pieces in each cell for ZIP code 03458: all mail in 03458 will be charged at the 3-digit rate.
o Commingling the three cells into the same tray: all 150 pieces qualify for lower 5-digit rate.
Understanding how commingling works and how it differs from combining is critical to understanding the potential value and savings. Here is an example of how one commingling process works:
o Client files (by package) are individually presorted to determine postal qualification without commingling.
o Client files (by package) are prepared in Far Point BMC and SCF sequence.
o Projects (by package) are individually imaged and processed in the lettershop. Mail is processed using high-speed delivery point bar-code scanners (DBCS), the same equipment used by the USPS to process mail. DBCS equipment scans the Postnet barcode on each piece and directs each piece to one of 294 pockets.
o The result is multiple mailings – including small runs, small versions and test panels – become a single mail stream for highest postal qualification. In a typical standalone presort of 50,000 to 100,000 names, 37 percent would qualify for the basic rate and 60 percent would qualify for 3-digit discount rates. None of this mail would qualify for 5-digit discounts. As part of a commingle presort of 3 million pieces, 77 percent of the same names will qualify for 5-digit discounts and 19 percent will qualify for 3-digit, delivering enormous savings over the stand-alone presort.
The benefits of commingling are numerous: highest possible automation discounts, deepest penetration into the postal system, lowest postage expense, commingling plus destination entry to BMCs and SCFs provides maximum postage discounts, and accurate analysis of test panels since they are processed and delivered with control mail.
Continue your evaluation by reviewing your package for automation discount opportunities. The USPS provides a wealth of information regarding format design for automation at www.USPS.com. In addition, your vendor should evaluate your package for automation discounts. Minor changes in size or aspect ratio may result in opportunities for savings not currently being realized.
Take advantage of in-line finishing and roll-to-roll print capabilities to yield savings in finishing (e.g. folding, die-cutting, perforating) your inserts and package components. Consult with your vendor regarding format design services and education opportunities for designers.
The lowest price for components may not represent the lowest cost for your mailing. Your vendor’s ability to provide a total package solution drives results in hard and soft cost savings, including freight, distribution and project management.
