The postal rate increase will hit a direct mail marketplace that only recently began to rebound from last year’s events, but there are ways to minimize its effect. By taking steps to cut costs, mailers still can reach their customer base, and they won’t have to mortgage their business to do so.
A client recently asked our mailing services department to predict how the rate increase would affect its direct mail campaigns, which require specific in-home dates. Vertis reviewed a typical large mailing based on criteria including mail class, drop shipping options, expected in-home dates and pre- and post-June 30 mail rates. This project was an actual live job of 5 million pieces.
Vertis analyzed the costs of mailing this job at both First-Class and Standard A rates before and after the rate increase. The new rates would cost 9.1 percent more to mail First Class and 6.4 percent more to mail Standard A. For this mailing, our client would have to pay $57,000 more in postage alone to drop the mailing after June 30.
To address the client’s need for short and reliable in-home delays, Vertis compared mailing at First Class versus Standard A. To mail at First Class before June 30 would cost 34 percent more, an increase of $390,000. After June 30, the job would cost an extra 47 percent, or $450,000 more. No mailer could seriously recommend such a costly option.
Sending the job First Class would ensure its delivery within two to four days from the drop date. If the same job were sent as Standard mail, the expected in-home delay rose to seven to 14 days. However, by drop shipping the mail to the BMC level, we could reduce the in-home delay to three to five days, and by drop shipping to the SCF level, the delay fell to two to three days.
By using Standard rates while drop shipping the job as far as possible into the postal system, this saved the client more than $110,000 in postage while matching First-Class’ delivery. In fact, drop shipping the job after the rate increase would still save the client more than $50,000 versus not drop shipping it before the increase.
Another client wanted us to produce multiple small cells with minor copy variations. When produced as a single job, the size of each cell prevented the client from achieving significant postal savings because of limited sortation levels. Vertis’ manufacturing group advised the client to make minor artwork modifications and allow specific points of differentiation to be imaged in color with an inkjet imager rather than graphically printed onto the piece. This allowed multiple test cells with minor variation to be produced in a single mail stream.
The larger number of pieces in a single job resulted in significant postal savings. Additionally, the combination of a single makeready and no additional plate changes lowered unit cost during manufacturing.
We may have little control over rate increases, but we can find cost-cutting delivery channels that don’t compromise efficiency or reliability.