Issue: October 2007 Issue
How to save money on your direct mailings
(despite the increase in postal rates)
Over the past several months, the United States Postal Service (USPS) has implemented the most dramatic changes in the past 30 years. More than just rate hikes, the USPS has essentially changed the way it does business.
If your business relies on the mail - either to sell, communicate with customers or provide products and services - one thing is certain: When the Postal Service changes the way it does business, your business will change along with it.
How can you and your business cope in this new postal environment? According to Gary Seitz, executive vice president of C.TRAC Information Solutions, cleaning and analyzing your mailing list is a great place to start. Plus, there are mailing techniques that can yield substantial dollar savings. "With the new postal changes, even the design of your mailing pieces can affect your rates and provide savings," Seitz says.
Clean and Lean
The old adage, "your mailing is only as good as your list," has never been more true. Today, there are a number of tools at your disposal to improve the hygiene of your mailing database.
To qualify for postal discounts, as of August the USPS has added a DPV (delivery point validation) requirement. Addresses must now be exact. Seitz compares mailing addresses to telephone numbers. When dialing the phone, if you're one digit off, your call won't go through.
But unlike phone calls, your mail may still be sent, but you could lose postal discounts, Seitz says. When you consider the average list has errors on as many as 8 percent of its entries, the additional costs can add up quickly. Now, if an address is one character off, you'll pay more.
In addition to DPV, running a simple merge-purge to eliminate duplicate names on your list typically yields benefits, as does updating your list with National Change of Address. The USPS claims nearly 20 percent of the more than 150 million delivery addresses it services change every year.
Going the Extra Mile
Presorting a mailing by ZIP code can save the average mailer thousands of dollars in postage. You can presort mailings using software or employ a presort house.
Another technique is to drop-ship your mailings at specified post offices. Depending on where your drop-ship location is, however, there may be travel/shipping considerations that could affect your return on investment. "Some organizations, especially nonprofits, constantly seek out 'partners' with whom they can share shipping costs," Seitz advises.
The Electronic Age
If you're contemplating abandoning your mailing program in favor of pursuing an all-electronic strategy, there are many factors to consider.
"While e-mail can be a very efficient way to reach customers, our clients are finding e-mail works best when used in conjunction with a hard-copy mailing program," Seitz says. "Many companies find that the customers who come to them electronically are often originally influenced by more traditional means, such as mailings. By combining those lists, these companies can cross-promote to customers based on their past discovery and buying behaviors."
With e-mail lists, the quality of them remains important, but may be difficult to maintain. What's more, some companies have had to add employees - over and above their existing mailing staff - just to manage their electronic database and related programs.
After the Fact
You can maximize the effectiveness of your lists even after your mailing has been sent by having it analyzed. This allows you to find out who your buyers are, how many mailings it takes for them to respond, how large their orders are and how many times you should mail to a client before dropping them from your list.
For the first time in USPS history, the shape of a piece will affect postage as much - or more - than the weight.
Overall, there is a definite shift from "flat to fold." This means when sending a letter-size piece, you'll save on postage by folding it and putting it either in a #10 business or a 6-by-9 envelope, as opposed to putting it in a 9-by-12 envelope.
This holds true for other pieces as well. "We have a client who, by redesigning its catalog to a 6-by-9 envelope, will be paying $21,000 less per mailing than it was paying before the recent rate increase," Seitz says. "The difference between what the company is paying now and what it would have been paying without the size adjustment is more than $37,000 - nearly 40 percent."
It All Adds Up
With the higher rates and the changes in postal regulations, mailing smarter is more important than ever before. It is imperative companies that rely on the mail become more strategic in their thinking. Most successful postal strategies will actually include a variety of approaches - utilizing different tools and techniques.
When surveying the new postal landscape, to paraphrase the late Senator Everett Dirksen, a presort here, a smaller piece there and "pretty soon we're talking real money."
This record has been viewed 371