direct mail costs

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Did you know that:

  1. 17% of Americans change addresses annually?
  2. 42 million people move each year
  3. One out of every six families move

Not enough of our direct mail customers pay attention to keeping a very updated list of customers to mail to. Can you imagine how much waste in money and time it causes from undeliverable addresses? It can easily cost into the thousands. That can definitely make a big cut in the profitibility of your business!

Here are some ways you can reduce your costs when doing your next mailing while keeping your list current and updated.

To make sure that you are getting a list with accurate addresses, ask about the National Deliverability Index (NDI) of the list. The NDI rates the percentage of addresses in a list that are deliverable. Use the NDI to target the address elements you need to get the delivery —- and postage price —- you want. For example, if you are targeting a specific 5-digit ZIP Code, look for an NDI of 100% for address element.

The United States Post Office provides many ways where you can validate the accuracy of postal addresses.

You can also use www.USPS.com to check zip codes in your list.

You can submit your list directly to the USPS on a printout so they can mark any changes of addresses. There will be a small fee for this service.

You can also run your list through a NCOA approved vendor that can check over your list with special software and make on the spot corrections.

The most important thing is that you should make a conscious effort to ensure all addresses are good. As stated earlier there is so many people and businesses either moving or changing contact information on a daily basis that it is sometime to pay attention to early on in order to save waste and wasted money in the process!

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One of my biggest irritations in dealing with the post office for the processing of discounted mail is that you are at the mercy of the mail clerk checking your mail.  Everyone has good days and bad days.  Also, everyone makes mistakes.

The most common mistake is in math.  Any mail processed through a bulk mail acceptance unit – standard mail (bulk mail), presorted first class mail, first class mail, periodical mail, media mail, etc. – is checked by weight.  To verify that the correct amount of mail is being received, the post office takes 10 pieces and weighs them.  From this they determine the per piece weight and then multiply this figure by the total number of pieces there are supposed to be in the mailing.  To this figure they add the tare weight allowances for any trays, tubs, lids or sacks plus cages or skids, if any.

As long as the final figure matches the actual total weight on the scale – within the allowance given by the post office – the mail can be accepted.  If not, the mail will be rejected.  There is an awful lot of math in this process.  That means, there is plenty of room for math errors.  If you know that everything was processed at your end properly, before taking the mail to the post office, you have the right to request a reweigh and a math review.  Unfortunately, some people are capable of making the exact same math mistake twice when they are reviewing their own written numbers. 

If you might be wrong because let’s say a printer used 2 different weights of paper, then you’ve got a problem.  But, if you know you’re right, speak up and request a supervisor review.

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There has been an ongoing debate about if direct mail is dead. With the “hyper” hype about the internet and email marketing and how much less it costs to “send” virtual mail out….the jury is still out!

EMAIL
So, email is supposed to be the “saviour” of getting your advertising message out to the thousands, hundred thousands and millions of people on your list. It is supposed to be cheaper to execute, doesn’t irriate the recipient by the ugly “junk” mails in their real mailbox, more efficient because you can measure ROI metrics within minutes of doing an email blast.

DIRECT MAIL
Direct mail’s cost per thousand prospect names are, in reality, cheaper than buying, or shall I say renting a list of like quantity in the online world. Undeliverability is up 20% lately from these online lists for the internet marketing crowd. Reason is there is more spam filters, corporate firewalls are set even tighter to keep out even legitimate emails, and the higher frequency of the recipient to mass delete emails for fear of email overload. Direct mail, on the other hand gets almost a 95% deliverability rate because good list managers scrub their lists on a regular basis.

Finally, with email, you only get 2 seconds or less to get the attention of the receiver or it gets deleted. Direct mail gives you 5 seconds or more to catch the attention of the receiver. That is huge!

So when thinking “old school” direct mail, always know it has a useful function in your marketing arsenal!

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SlowFor sending standard mail – what used to be called bulk mail – the post office has only 2 sizes.  Mail is either letter size or non-letter size.  The dividing line is larger or smaller than 6-1/8” x 11-1/2” x ¼” thick.  The aspect ratio (length divided by height) must also be in the range of 1.3 to 2.5.  This latter criterion makes all square mail non-letter size. 

One of the biggest changes the post office has made is in the acceptance and design of non-letter size mail – the larger pieces.  And the consequences can be staggering.

It used to be that non-letter size mail could be designed in practically any fashion and receive some form of discounted postage rates.  Not anymore.  Now, mail must be laid out so the mailing address is in the top half of the mail piece.    And, regardless of whether the mail piece runs horizontal or vertical, the top half is always defined by the vertical direction.  That is to say, if the mail piece is a 9”x12” envelope and the envelope is designed so that the address runs across the 12” side, the top half of the envelope for post office purposes is still regarded by folding the 12” side in half.

The consequence for not following this design:  pay full first class postage prices.  There is no give on this issue.  There is no in between postage rates available.  And local post offices may not issue letters of exception.  If someone wishes to get a letter of exception, they must send a request to a central processing facility in New York and this could take some time, time which most direct mailers do not have.

Moral:  If you want to send non-letter size mail at discounted rates, be sure to follow the post office’s design specs.

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Despite the passage of postal reform legislation a little over two years ago, the US Postal Service remains steeped in financial problems.

It’s anybody’s guess how much, if any, financial assistance the USPS will get from Congress — whether or not it’s part of President Barack Obama’s economic stimulus package.

The major issue continues to be how the postal service will cope with its nearly $5.8 billion annual obligation to pay healthcare costs for retired postal employees.

All this comes at a time when the USPS reported a loss of $384 million for the quarter ended Dec. 31, 2008 and projected that mail volume would fall even further, to some 12 billion to 15 billion pieces, for the year ending this Sept. 30.

Even with these losses, the Postal Accountability and Enhancement Act (PAEA) mandates that the USPS can raise rates every year — but only in accordance with the rate of inflation specified in the Consumer Price Index.

And so the postal service announced last month that standard mail and nonprofit rates will increase an average of 3.8% on May 11.

Catalog or flat rates will rise by 2.5%. But some standard hikes are going to exceed the average.

“It looks like standard rate parcels went up an average of 16%,” says Jerry Cerasale, the Direct Marketing Association’s senior vice president for government affairs. “Our initial response is that it’s just going to depress volume more.”

Under the new rate schedule:

Standard mail regular automation letters with five-digit ZIP codes that weigh 3.3 ounces or less will cost 23.3 cents to mail.

Standard mail regular automation letters with three-digit ZIPs will be priced at 25.1 cents.

In the standard mail regular nonautomation category, machinable automated area distribution center letters weighing 3 ounces or less will now cost 25.6 cents.

Meanwhile, the industry is hoping the USPS can remain solvent given its fiscal woes.

The PAEA allowed the postal service to file an “exigent (i.e., urgent) rate case” if the conventional CPI-based hike would leave it with insufficient operating funds.

But Postmaster General Jack Potter said in testimony before the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security in late January that the USPS doesn’t believe it’s “appropriate” to ask for an exigent rate case.

“This would be counterproductive, particularly in an environment where mailing activity is already severely contracted,” he testified.

Early last month, a coalition of 40 mailers and trade groups wrote a letter to National Economic Council director Lawrence Summers, Office of Management and Budget director Peter Orszag and OMG deputy director Robert Nabors, asking that any forthcoming stimulus bill include an amendment from Sen. Thomas Carper (D-DE) that would allow the USPS to pay retired postal employees out of a separate retiree health benefits fund and not from general postal revenue.

The letter argued that “The U.S. Postal Service confronts a severe economic challenge that, if not addressed in an effective way, could cause serious and disruptive changes to its structure and services, and the estimated 9 million jobs it supports throughout the mailing community. Because the Service remains an essential and fundamental part of the nation’s communications and commerce infrastructure, and because of the vast network of jobs it supports, we believe that action must be taken swiftly. …This is vital legislation that will preserve or restore up to a million jobs in the mailing sector.”

Before the groups wrote that letter, Potter asked the Senate panel for changes in the law that would permit the postal service to cut back its delivery schedule to five days a week, and also requested assistance with the USPS’ healthcare obligations. His proposal received, at best, a lukewarm response among the senators.

For the latest postal news, visit http://directmag.com/legal/postal/.

(the above article is taken from http://directmag.com/mail/0301-usps-financial-woes/)

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When planning a mailing to take advantage of postage discounts, every piece must weigh exactly the same.  The reason for this is that when mail is brought in for acceptance, it is weighed in as a total.  Ten pieces are then counted and weighed.  From this, the math is done to see if the total weight presented is within 1% of the weight calculated.  Since you are allowed only a 1% margin for error, you really need to make sure each piece weighs the same. 

Some of the items that can wreak havoc with this are:

The printer ran out of the desired paper stock in the middle of a job and substituted another.  The paper might have the same desired look/feel as the original, but the weight is off.

A note pad is included with each mailing and the sheets are not counted out to be exac.  Sometimes there’s 1 or 2 extra or under sheets.  Remember, the post office calculates what the weight ought to be based on only a handful of 10 pieces – which weight are those 10?

beagleWho doesn’t love their pet?  We once had a client who’d written a book about pets and did a mailing to several thousand dog owners.  Inside each envelope we placed a whole dog bone.  Do you know that a fish variety and a liver variety weight differently?  What a nightmare!

And then there were the Red Rocks of Sedona to send home.  Like every single rock is going to weigh the same.

Or the spa that mailed small packets of lavender bath salts.  Do you have any idea how hard it is to get equal measurements on that!  This would not be a great idea anymore due to possible anthrax look-alike.  You want to make sure whatever you mail can be received and not confiscated.

The bottom line – plan a mailing that can all be the same.  There are plenty of ways to be unique without having to worry about weight.

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foreverstampEffective Monday, May 11, 2009, postage increases on practically all classes of mail and their related services – first class U.S., first class international, periodicals, standard (a.k.a. bulk), and package services. 

If you have Forever Stamps, they are good regardless of whether postage is $.42 or $.44; you purchase them at today’s rate, but they are worth whatever face value at the time of mailing.

foreverstamp2Most of us remember the postage increase last May – taking our first class 1 ounce letter rate up from $.41 to $.42.  (It was $.39 just before that.)  This May, the comparable postage will increase from $.42 to $.44.  And, guess what, it gets reviewed again next May.  It is the United States Postal Service’s philosophy to review postage every year in order to provide smaller, more predictable price changes.

So, postage is going up.  A lot of things go up in price.  We could probably live with that.  But what about service?  Is that getting better?  Is there more?  Or are they talking about less?  They are talking about less.  The greatest increases in postage are coming to areas where mail must be handled manually instead of by machines.  This makes the Post Office personnel work harder which translates to more expensive.  The USPS cannot meet their budget, so they are considering dropping a day of service – enabling them to lessen their costs while increasing their prices at the expense of their customers.

The USPS has a monopoly on their service.  For us customers of theirs, we have very few options.  It does give us pause to reflect … is there anything we can do?  Please share your thoughts.

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mail-conveyorIf you are planning a direct mail campaign and you put the job out for quotes to a mailing house, do not look only at mail handling costs and believe that printing is printing and postage is postage.  This couldn’t be farther from the truth.  The amount of money you spend for a direct mail campaign should be the bottom line that it costs you – printing, mail handling and postage, balancing your desired delivery times.

A mailing list should be cleaned and refined before the print order is given.  Very often, a mailing list could be reduced 10% or even more after the list is cleaned for move updates, the removal of duplicates and bad addresses and, if appropriate, the removal of moves out-of-area.  Why waste money on excess printing and mail handling?  Be sure that the expert you hire to do your mailing is proficient at this and will work with you to provide your list clean-up in a timely manner prior to placing your print order.

Similarly, the class of mail should be examined based on balancing estimated delivery time and postage cost.  It could be that you are preparing a very time sensitive mailing where 40% is nationwide and 60% is local.  You have asked mailers to quote the job for presorted first class mail.  A good mailing house will direct you to consider mailing the nationwide pieces presorted first class and the balance presorted standard, maximizing postage savings and delivery time.  You may not have thought of that – mailings is not your business, why should you? 

And, finally, postage is not always postage.  The more sortation you can do on a mailing decreases the amount of processing the post office needs to do and lessens postage.  Where a mailing house takes the mail to be processed can also lessen postage.  Again, this is not your business to know, but don’t you have the right to expect your hired expert to direct you. 

Look at all these factors before you compare the total cost, not a single one.