Patrick O’Brien
SVP, sales and marketing., Direct Group
With annual postal rate increases, the Postal Service has made it very clear that it will continue to encourage us — and therefore, our clients — to deliver mail as far into the stream as we can.
With the latest technologies available, we’re finding opportunities to do this and deliver postage savings to our customers on a monthly basis. We have the potential to knock half a penny per unit off programs, which can mean annual savings of $1 million or more.
While strategies to reduce postal costs are critical, we’ve also found ways to save clients significant amounts of money by helping them use data better. For example, our partnership with CognitiveData enables us to offer optimization services that will increase response rates at least 1%-2% on every campaign and reduce costs related to undeliverable-as-addressed mail and the limitations of the National Change of Address (NCOA) system.
Typically, the files coming from our customers’ data providers are about 95% accurate. But what marketers don’t realize is the financial impact of the other 5% on their bottom line. Eliminating simple redundancies accounts for maybe half a percent, but that other 4.5% is critical. For example, marketers should realize that 120,000 people move every day in the US, so for any file that is two weeks old, more than 1.5 million people have moved since then.
Technology that enhances customer records is the answer. By focusing on services that improve those names – and even upgrading non-ZIP+4 addresses to support automation discounts – you ensure that every qualified prospect receives your offer.
Postage optimization isn’t just commingling mail, it’s taking a holistic view of the whole process. It’s commingling, it’s co-palletizing and it’s driving mail trucks directly to postal facilities. But to really generate top results, it should also include paying attention to the data in new and powerful ways.
THE TAKEAWAY
To generate top results and save money, you need to pay attention to the data
David Lowndes
Director, product development, Iron Mountain Fulfillment Services.
Many marketers are feeling the economic squeeze, and so, they are looking to cut costs wherever they can, including printing, production and postage. But if all you want is to do something for the cheapest possible price, you’re making a big mistake. Instead, you should focus on what you’re spending compared to your expected return and then see where the significant improvements can be made.
We specialize in smaller quantities of higher value communications, so we know we’re not going to get great savings on postage because that’s not where we play. We generate some fairly complex pieces for our clients, such as enrollment kits for insurance products, and they can contain a whole range of information, from the actual benefits to the application form or a terms and conditions page.
When you optimize printing and production, you can not only make a major difference to the cost of the piece, but also its effectiveness. And when you factor in things like reducing the storage costs of pieces before they’re mailed, reducing the insurance while those pieces are stored in a warehouse and reducing the amount of obsolete material that has to be thrown away, we find that clients can cut 20%-30% from their campaign costs.
We’re also advocates of highly personalized marketing pieces but, as with most things, it’s a question of balance. For a lot of complex enrollment processes, such as insurance, the first sales step is usually done by phone and a certain amount of information is captured during that conversation.
Sending a blank application form to someone you’ve just spent time on the phone with sends the message that you aren’t paying attention. But if you do the reverse of that and send out an application that is pre-populated with captured information, it can have a dramatic effect on response.
THE TAKEAWAY
Optimizing printing and production helps with cost as well as effectiveness
Ted LeBow
VP, operations, Vertis Communications
Postage and freight have historically been considered pass-through costs to marketers, but last year’s postal rate increases are causing many to attempt to save money by inserting their mailings deeper into the postal system.
Being cost-effective when it comes to postage entails far more than simply doing a pre-sort and calling it done. With recent changes in postal regulations and increased discount opportunities, marketers need to forget the rules of thumb in regard to postage costs. Instead, a cost-benefit analysis and a complete suite of postage savings solutions should be applied to minimize postage expenses.
For example, it actually costs more to send a pallet of mail from Philadelphia to a sectional center facility (SCF) in Seattle than to Atlanta. That’s because sending a pallet to an SCF instead of a bulk mail center (BMC) results in an additional $9/M in savings. So, by using a break-even cost/benefit analysis, a business-savvy mailer will send a different quantity to each SCF— unlike the past when mailers picked an arbitrary threshold and applied it consistently across all scenarios.
Keep in mind that reducing postage costs is not an art, it’s a science. There are only 11 possible rates for standard, for-profit automation mail, so statistically, marketers can typically figure out the best rate opportunity.
We’ve recently seen many marketers starting to ask more questions about postage. The best advice we can give is to inquire about the process being used to manage your direct mail program. Are postage decisions made based upon a rule of thumb, strictly financial, in-home or mail-date dependent, or just because it’s “the way we’ve always done it?” Seek a solutions provider who understands the full spectrum of postal options so you can make the best business decision.
THE TAKEAWAY
Marketers should do a cost/benefit analysis of postage savings solutions
David Henkel
President, Johnson & Quin
One of the biggest trends in direct marketing is the increased use of personalization in an effort to make direct marketing materials more relevant and improve response rates. Personalization tools and techniques can be very powerful when it comes to driving response rates, but doesn’t need to break a printing and production budget.
It is important to design your direct marketing piece with thought, using only personalized information that makes sense within the context of the piece. A piece overloaded with unnecessary elements not only drives up your costs, but can actually hinder response rates. Remember for certain campaigns, less really is more, and some information is better left in the database if there is a chance it would offend the recipient or dramatically increase your production expenses.
Another mistake marketers can make is thinking every mailing has a better chance of success if it is full-color, regardless of the cost or creative. Full-color digital does make sense for some industries, such as real estate, where there is value in seeing the property in color and mail quantities are low.
But for most marketers, the return on full digital color may not be worth the added expense involved in producing it. The same — if not better — ROI can be realized by preprinting forms in color and then using monochrome laser or ink jet to personalize the piece. This not only helps reduce the cost, but also allows a great deal of creative variability when it comes to your campaigns.
Overall, evaluate your direct mail campaign carefully. Stay sensitive to managing privacy concerns, incorporate data reflecting your business goals, and create wisely. Good planning is the key to a successful campaign and lowering your printing and production costs.
THE TAKEAWAY
Good planning is key to reducing printing and production costs
