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Make the most of stable postal rates

John Campo
VP of postal relations, Pitney Bowes

The “great recession” has dealt its share of challenges to the mailing industry, and mailers are hard-pressed to find good news these days. Fortunately, the US Postal Service delivered an early holiday present in December — there will be no increase in first-class postage in 2010.

Here are a few ideas to help mailers take advantage of this gift.

Maintain a laser focus on mail quality. One of the unsung benefits of the great recession was the way it forced everyone to “reboot” their mailing operations. Every piece of mail that went out in 2009 had to pass two tests: was it relevant to the recipient and, if so, was it as high-quality a mail piece as possible? Now that the economy has regained a fragile footing, mailers must stay focused on these questions. With the tools and technologies available these days, there is simply no excuse any more for poorly-addressed or poorly-targeted mail.

Keep hunting for bargains. It’s great that the cost of a first-class letter remains 44 cents, but there are easy ways to knock that cost even lower through postal discounts. If you are presorting your mail already, you are ahead of the game. If not, consider making the leap to presort either in your own operation or by partnering with an outsourced provider.

Don’t lose sight of the long term. Depending on the size of your postage budget, the Postal Service’s decision to hold rates can mean thousands of “found dollars.” Consider taking a portion of those savings and investing in tools or technologies to make your operations more efficient for the long term.

As the nation emerges from the downturn, mail retains its place as a crucial link in the marketing and customer communications mix. Kudos to USPS for giving mailers a new year of attractive pricing as an incentive to reinvest in this vital communications channel.

THE TAKEAWAY: Saving money remains key. Fiscal recovery is no reason to ditch streamlining strategies

Mike Yapuncich
VP, Experian

Many mailers planned for a 2% to 3% increase in postage in 2010. The lack of a rate increase means many mailers can take advantage of the surplus budget to increase circulation, especially in acquisition and reactivation efforts. The key to doing this successfully is to “mail smarter.”

One time-tested mailing practice that will help marketers do this is to run a national change of address programs as close to the mail date as possible to get more moves and to meet the USPS Move-Update requirements. This remains the single most effective tool mailers should use to improve response while reducing waste. They should also consider using proprietary change of address (COA) services, but be careful because these are not nearly as good as NCOA COAs. Direct marketers should also run address-level deduping on poor performing segments and use proprietary processes from service providers to ZIP+4 code additional records and to correct records with missing or invalid secondary numbers, reducing postage and waste.

Mailers should also not mail records with potential deliverability problems, such as those that are non ZIP+4 coded, those with a missing or invalid secondary number, especially on poor-performing segments.

They should also apply common suppressions such as do-not-mail, deceased, and prison, and for flats mailers, co-mail or use Add-a-Name to reduce postage. They should also consider leveraging analytical models to better target prospects and determine which customers to reactivate.

In addition, newer strategies include using the Intelligent Mail barcode to get postage discounts, and reactivating only those older customers where an external service provider has intelligence that the person is still at that address. This practice provides up to a 40% increase in response. Marketers can also apply linkage to identify individual duplicates across multiple addresses, consider suppressing mailings to minors and use undeliverable-as-addressed (UAA) suppression files that have recently become available. For flats, do not mail any records that fall into the three-digit qualification tier on poor performing segments. There is significant extra postage to mail these. Lastly, select a service provider to help clean up your customer database now.

THE TAKEAWAY: Use several strategies, including change of address programs, to cut back on costs

Rich Cicha
Director of mailing services and logistics, Direct Group

Ever since the Postal Accountability and Enhancement Act of 2006 became law, mailers have had two questions: “What’s the Consumer Price Index?” and “How much additional postage will I now have to pay?”

For the first time in many years, the USPS won’t raise first-class or standard-mail postage rates in 2010. But savvy application of some postage-saving techniques could push even more cash to your bottom line while actually enhancing delivery. Try these:

Drop-Ship your mail. The USPS is very good at delivering mail from a local post office to your home or office, but it realized many years ago that delivering cross-country was out of their sweet spot. They instituted work-share discounts that allow mailers to save postage by taking on some headache and expense of hauling the mail.

Copalletization. This more recent opportunity can allow mailers to achieve much deeper Sectional Center Facilities (SCF) discounts on qualifying trays within a mailing even if the mail was a mixed or Bulk Mail Center pallet. A few suppliers in the industry offer this service, and it could significantly lower your postage expense.

Commingling. By physically scanning and commingling mail, mailers can reduce postage by increasing the density at the tray and pallet levels for increased SCF qualification. Mailings with a large number of versions often benefit most from this service due to the inherent lack of geographic density.

Find partners now. You can sit back and enjoy a flat budget line for postage next year, or you can actively seek ways to cut your line item further with techniques that also move your mail through the USPS more efficiently. Make sure to find a partner with enough volume, expertise and a dedicated postage team to make it worthwhile.

THE TAKEAWAY: Take advantage of drop-shipping, copalletization and commingling to save money

John Mabus
Owner, Mabus Agency

All of us direct mail junkies received an early holiday gift when USPS Postmaster General John Potter announced a postage rate freeze for 2010. According to a statement released in October, the Postal Service wants to build long-term direct mail revenue. I personally salute this decision as an economic development tool.

This rate freeze is part of a larger situation that should create a boom in our industry. Our nation’s economy is the main factor cited in the USPS rate freeze. This downturn has also greatly affected printing cost. Printing Industries of America released data late in 2009 that annual printing profits are approximately $2.5 billion compared to $5.4 billion in 2008. This drop brings a bittersweet boon of lower printing cost in the ultra-competitive industry.

Static postage rates and rock-bottom printing costs open the door to increase quantities and test new strategies. As direct mail practitioners, it is usually a distant dream to add a comprehensive test set to campaigns.

In order to meet client (or boss) expectations, those of us responsible for direct mailing often work with our nose to the grindstone and let new technology pass us by. With lower costs across the board, now is the time to test new techniques and strategies. Variable data printing, personalized Web sites, image personalization, intelligent mail bar codes and other technologies are all worthwhile strategies to pursue. Each of these, when implemented properly, can improve response and ROI.

Recently, my company created a student recruiting campaign for a local college utilizing personalization and Web integration. Response to the campaign was over 15% and as a result, the college added 411 students over the previous year. The testing that went into the campaign was a major factor in the campaign’s success.

Do not think of this USPS decision as a temporary savings. Use this as an investment. The postage freeze has tremendous implications for an industry that has been relegated to the “old school” box of marketing tools. I encourage everyone to take advantage of this opportunity to create a direct mail boom.

THE TAKEAWAY: Use the respite as a time to test new strategies and technologies

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