The bright side to postal rate increase

You might ask, “How on Earth could the impending increase in postage be a good thing?” Think of it as a challenge that will precipitate positive industry changes – primarily, better efficiencies and profitability.

We have all heard shocking statistics regarding mail-related inefficiencies. The U.S. Postal Service handles about 10 billion undeliverable-as-addressed mail pieces per year, resulting in approximately $1.6 billion in loss for the USPS and more than $6 billion in waste for mailers.

Yes, the proposed rate hike will make postage more expensive. However, focusing on postage – a relatively small part of the spending equation – rather than inefficiencies that span the entire mail stream reminds me of the joke about the person who orders a hot fudge sundae and asks the waiter to hold the cherry, because he’s on a diet.

Progressive companies have already begun to implement ways to improve their mail stream management practices, to make mail communications less costly and more effective than before and help reduce the impact of postage increases in the process. Some best practices to consider are:

Cleanse address data. The USPS will become more stringent on discounts offered to mailers that do not maintain the accuracy of their address lists in compliance with USPS regulations. Move quickly to embrace CASS-Certified address matching software, Delivery Point Validation technology, and the NCOA Link system, to name a few.

Presort for savings. Presorting mail before it enters the USPS network can reap double-digit percentage postage discounts. Companies can invest in the latest sorter technology, partner with an outsourced presorter, or work with your IT department to implement software that can presort mail in the production process.

Push the [smaller] envelope. The anticipated rates would give mailers a strong financial incentive to switch from flat (9×12-inch) envelopes to smaller (6×9-inch) envelopes, reflecting the new USPS rates for processing the smaller envelopes.

Investing in folding and inserting systems will make sense for more organizations under the proposed new rules. As parcels also would be affected by shape-based pricing, mailers need to re-evaluate current packaging practices.

Merge marketing and operational communications. Integrating your marketing efforts with your operational communications will help to improve your overall marketing effectiveness and increase operational efficiencies which, in turn, will help to offset the postage rate hike.

Look at the bright side. The proposed price changes are a good opportunity to improve the entire mail stream process within an organization. Adopting best practices can dramatically impact your costs, response rates and ROI.

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