Brace Yourselves Direct Mail Marketers: The Postage Rate Increase is Here
We’re officially almost through month one of the New Year, and direct mail marketers, you know what that means: the postage rate increase is upon us. After another unprofitable year, with operating losses in 2018 totaling nearly $4 billion, the USPS is using this round of postal increases to aid in offsetting some of those losses.
What are the details of the increase?
Postage rate increases are set to kick in this Sunday, January 27th. With direct mail still playing a prominent role in the modern marketing mix, these upcoming changes are set to impact offline media across the board. Here are some of the key changes to be aware of:
- Marketing Mail (Standard Mail) — increase of $0.004-$0.005 per piece, from approx. $0.287 to approx. $0.291 (basic regular rate for mixed AADC, for origin entry); and from approx. $0.251 to $0.256 (basic regular 5-digit rate, for origin entry).
- Nonprofit Marketing Mail (Standard Mail) — increase of $0.001-$0.002, from approx. $0.172 to approx. $0.173 (basic regular rate for mixed AADC, for origin entry); and from approx. $0.136 to $0.138 (basic regular 5-digit rate, for origin entry).
- First Class — increase of $0.004, from approx. $0.424 to approx. $0.428 (basic mixed AADC).
- The USPS will be reducing the destination entry discount by $0.003. This will make commingle rates higher, but how much will depend on what the commingler chooses to absorb.
How can brands maximize efficiencies?
Get ahead of the changes by working with your agency and/or third-party vendor partners to review your current formats, materials, mail plans and processes. We’ve identified some areas for cost savings, allowing you to potentially offset the increased postage:
Small changes to format sizes or paper weights and grades could potentially allow you to recognize cost savings without impacting your overall branding and customer appeal.
If your marketing calendar is firm for the next 6-12 months, that may enable you to secure paper for multiple print runs now! This not only allows you to lock in your paper buy at current market rates, but it will also help alleviate longer mill times and transportation. Depending on the relationship you have with your print vendor or mill partners, they may require a payment upfront, so factor this into your overall costs.
Finally, are you in a position to print several mailings within a single press run? If you typically print/mail monthly and leverage the same creative, why not run multiple months within a single set-up? Digital variable imaging for letter greetings and address blocks could be set to run at the time of each month’s desired drop.
Take Advantage of the 2019 Postal Promotions
Best suited for large mailers, these promotions run for limited stretches of time and have varying levels of complexity with regards to registration, eligibility, requirements and best practices. We’ve given a snapshot of the upcoming promotions and encourage you to reach out to your agency or third-party vendor partners for more details on each!
- Informed Delivery: This is a new for 2019 promotion. The USPS will be offering a 2% postage discount for mailings that incorporate ID as a component. Registration begins on July 15, and the promotion is for mailings submitted between September 1 and November 30. For reference, at the end of November 2018, there were over 13MM registered users (approx. 9MM with email notifications), showing typical match levels are in the 8% – 10% range.
- Mobile Shopping Promotion: The USPS will be offering a 2% postage discount for mailings that incorporate a QR code (or equivalent) as a component. The QR code must take a customer/prospect to a mobile-optimized web page to complete their transaction. Registration begins on June 15, and the promotion runs from August 1 through December 31.
- Emerging and Advanced Technology Promotion: The USPS will be offering a 2% postage discount if you do one of the following — Digital to Direct Mail; Interactive NFC technology; Addressable TV; Enhanced Augmented Reality; VR; Mixed Reality; Video in Print; or Integration with Digital Assistants. Registration began on January 15, 2019, and the promotion runs from March 1 through August 31.
- Earned Value Promotion: To encourage the continued use of BRM, CRM and Share Mail, the USPS will be offering a postage credit for eligible mailpieces placed in the mailstream by the recipient and scanned during the promo period. Registration begins on February 15, and the promotion runs from April 1 through June 30.
- Tactile Sensory and Interactive Mailpiece Engagement Promotion: The USPS will be offering a 2% postage discount for mailings that use specialty materials (papers and inks), interactive folds, or visual effects. (This one brings together all the neuroscience and neuromarketing research talked about recently). Registration began on December 15, 2018, and the promotion runs from February 1 through July 31.
- Personalized Color Transpromo Promotion: The USPS will be offering a 2% postage discount for mailings that incorporate marketing messages highlighted through the use of color, dynamic variable print, and personalization on their bills and statements. Registration begins on May 15, and the promotion runs from July 1 through December 31.
With talk of a second postage increase coming in 2019, our teams will be keeping a close eye on the USPS announcements, and will advise clients accordingly!