The USPS Price Increase and What It Means For Your Business
September 9, 2010 Leave a comment
By Summer Seidenkranz, President of National Refund & Marketing Services, Inc.
July 6, 2010, the United States Postal Service (USPS) proposed a price increase to the Postal Regulatory Commission (PRC) to change rates effective January 2, 2011. The proposed increase is above the rate of inflation, spurred by the ongoing recession that has rocked the economy, which coupled with their eroding customer base and the flight to electronic alternatives, has left the USPS with a $7 billion projected shortfall for fiscal year 2011.
All businesses should carefully consider the impact of this proposed increase. The highlights as presented by the USPS include a moderate 2-cent increase in single piece First Class mail (4.5%) and introductions of Reply Rides Free and Saturation Mail incentive programs. Doesn’t sound too bad, does it? Dig a little deeper and you’ll find alarming statistics for the business mailer.
If you mail catalogs, the increase is over 5%. Postcards will increase over 7%; periodicals (magazines) face an 8% increase, and Standard Mail parcels face a whopping 23% increase – and a direct mail unsolicited parcel will be assessed an average 14% higher cost than a solicited package with the exact same contents.
What can you do? While eliminating it from your bottom line is not possible, there are several ways to mitigate the increase.
• Work with an experienced fulfillment or mailhouse that can guide you to the best rates. Their technology will provide you with the lowest postage possible.
• When you’re planning a mailing, engage all parties from the beginning. Packaging/mailing optimization works best when applied at the development stage of a project, and understanding shape-based pricing is critical.
• Clean your mailing lists – there’s an additional reason beyond the required NCOA processing to keep your lists current and clean – every duplicate or undeliverable piece mailed is money wasted.
• Drive your customers to your website for additional detail – mail that letter and sell sheet, but don’t include the 12 page report…post it on your website and provide the link in your letter and you’ll save by minimizing the weight of your mailpiece.
• Consolidation of mailings will drive deeper discounts and faster delivery.
The PRC will issue a ruling 90 days from the July 6th date. The increase can be accepted, rejected or modified, but industry experts are preparing for an increase – and so should you.
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Summer Seidenkranz has over 30 years of experience in the fulfillment and mailing industry, and is the President of National Refund & Marketing Services, Inc. Summer can be contacted at summer@nrmsinc.com.
