Keep the “yikes” out of the postal rate hikes

Postage is the single biggest expense in most mailing projects. In fact postage averages about 70% of the cost in all mailing budgets. So when the USPS proposed a rate increase for May 2007, mailers sat up and took notice. That’s a good thing, because there are strategies that can lessen the impact of a postage increase.

Mailers who adapt to the changes now can be positioned for more cost-effective operations…even after the rates go up. Within the proposed plan there are greater discounts for redesigning certain mailpieces or drop shipping and worksharing. Here are some tips that could help keep your budget in line.

7 tips that could save your budget

1. Put your data to work – Take a closer look at the who, what, when, where and why of your database. By targeting only the best prospects you reduce your list count, which reduces your postage and increases your ROI. This is direct marketing 101. It should be practiced all the time.
2. Clean up your database – Improving address quality is a major goal of the post office. It should be your goal too! By reducing Undeliverable-as-Addressed (UAA) you reduce wasted postage in your mailings. About 20% of the people in your database moved last year. Your database should be scrubbed through National Change of Address (NCOA) at least once a year.
3. Use CASS to your advantage – The Coding Accuracy Support System (CASS) is a process required by the USPS for all presorted mail. It verifies the address and zip code. It identifies undeliverable addresses. It also singles out addresses that will mail but won’t qualify for automation. These non-auto addresses have problems like a missing directional or misspelled street. They mail at a higher postage rate and have a 50/50 chance of delivery. Eliminate the non-auto from your mailing database and you reduce wasted postage.
4. Take advantage of worksharing discounts – The new rate plan has increased the discounts for drop shipping and commingling mail. The post office wants out of the trucking business. They offer discounts for trucking saturated mailings to their bulk mail and sectional facilities. You might save $10 to $15 per thousand after transportation costs if your list qualifies.
5. Watch your weight – If you’re mailing catalogs, newsletters or heavy envelope packages, look for ways to reduce the weight. Postage will increase for heavier mailpieces. Reducing the basis weight of paper stocks or eliminating a component from a mail package can decrease postage.
6. Watch your shape – The current rate structure relies primarily on a weight-based system. The proposed rate structure will use a combination of weight and shape to determine rates. The rules that require letter size mail to be rectangular in shape will be applied to flat size mail in the new plan. Rates for flats will increase by 25% or more. It will be critical to design or fold flat mailpieces to rectangular shapes. Refolding a catalog or magazine can usually qualify it for lettersize rates. The postage savings for a letter vs. flat are significant.
7. Mail a double postcard – Double postcards offer multiple benefits. They are inexpensive to produce. The response card half can provide qualified leads. They mail at the First Class postcard rate, which is lower than the Standard Letter rate. Because they mail as First Class, any UAA is returned for FREE. This helps to clean up your database while marketing a product or service. Catalogers should use them once a year to requalify prospects and clean up the database before sending their more expensive catalogs.

If you have questions, contact a sales representative at A.M. Mailing Services, LLC or visit with a Business Design Analyst at your USPS Sectional Facility.