On October 4, 2010, the Postal Regulatory Commission (PRC) will make a ruling on the proposal by the Postal Service Governors for an average 5.6% price increase for its “market dominant” products. These include First-Class Mail, Standard Mail, Periodicals, Package Services and Special Services. The price of First-Class Mail and Postcard Mail stamps would increase 2 cents. This is only a proposed change, and the final version may be different.

Postage can be an enormous part of your direct mail campaign. Here are a few ways to keep postage costs contained.

5 Ways to
Beat the Postage Increase

1) Size Matters

The United States Post Office has a bevy of rules and regulations you must follow to receive specific postage rates. If you’re thinking of something unique (large mailer, “bulky” mail or irregularly shaped mail, very heavy pieces), it’s worth a meeting with the Post Office’s local mail specialist to be sure your piece can actually be mailed! In our discussions with the Post Office, we have learned of many projects that were designed, printed and packaged only to find out they couldn’t be mailed. Can you imagine? It’s worth taking the time to meet with the specialists.

Guidelines are also in place for standard mail pieces. For instance, postcards can be mailed in a variety of sizes and still receive the reduced postcard postage rate.

Following the guidelines put in place by the Post Office can help keep postage costs low.

2) Target, Target, Target

Have an amazing new product you’d like to promote? Think about the ideal customer who would love that product. Now think of the specifics of that customer: age, gender, location, income level, interests, cultural influences, etc. The more you target the ideal customer, the narrower the focus. This means you spend less on the quantity of pieces (less print and postage costs). It also means you can spend more on amazing graphic design, research, offers, etc.

3) Purchasing Mailing Lists

When you target an audience, your focus becomes very clear. Throwing up 10,000 mailers at a generic list and hoping they fall in the right lap is ludicrous and not cost effective.

There are many list purchasing resources available to businesses. You can purchase lists yourself online, however it is our experience to allow the marketing agency or printer to purchase a list for you. They have relationships with list brokers and can help determine the best targets for your message.

4) Scrub the List…Scrub it Hard!

We advise using a reputable printer who has in-house mailing services when generating a mailing campaign. This gives them the ultimate in quality control over fulfillment and mailing.

This brings us to CASS (Certified Address Scrubbing Software). This is a software that automatically checks, or “scrubs” and updates addresses to make them ready for the postal service. When your database is “scrubbed,” you have a greater savings on postage. The software checks for address standardization, corrections, updates, verification, and creates a postal report which is delivered to the post office with your project–so they can verify any postal discounts.

There are some other softwares a mail house may suggest. Discuss the possibilities and determine the possible cost savings in postage as compared to the cost of using additional processes to scrub the mailing list. At the very least, use CASS!!

5) It all comes down to this…

Postage rates are dependent up on three things: list quality, saturation, and entry point. We’ve already gone over how to ensure your list is as clean and accurate as possible, so we’ll just focus on saturation and entry point. Like all government agencies, the USPS reduces everything to an acronym, so I’ll try to explain them as best as possible as we go.

Entry point is simply the type of facility that the mail is entered into. If you deliver business mail to a small Post Office, it then has to be transferred to a larger sorting facility. This costs money so the USPS offers discounts to commercial mailers who deliver to DBMC or DSCF facilities (Destination Bulk Mail Center and Destination Sectional Center Facility respectively).

As for saturation, the absolute lowest possible postage can be achieved by using Enhanced Carrier Route (ECR) saturation. This is where an address list is processed in the exact order a mail carrier will deliver in. There are three levels of ECR Postage:
Saturation: Lowest possible postage rate. At least 90% of all residential addresses, or 75% of all business and residential addresses in a given carrier route and sorted in walk sequence.
High Density: At least 125 pieces in a carrier route and sorted in walk sequence.
Basic: At least 10 pieces are within the same carrier route and sorted in walk sequence.

ECR lists are generally just addresses and are great for canvassing areas surrounding a business, hitting specific neighborhoods that meet certain demographic requirements, or for mail projects that are dependent up on high volume at the lowest possible per piece rate.

Outside of ECR postage there are four saturation levels that affect postage rates:
5 digit: At least 150 pieces in any five digit zip codes. (i.e., 150 pieces in 84115)
3 digit: At least 150 pieces that share any 3 digit zip prefix (i.e. 150 pieces in 841)
AADC: At least 15 pieces that are within a common Automated Area Distribution Center (AADC’s can deliver to multiple 5 digit or 3 digit areas)
Mixed AADC: Everything else that doesn’t qualify for the higher saturation rates.

In the past, the USPS put out a Domestic Mail Manual (DMM) containing nearly 2000 pages of rules, regulations, and exceptions. Obviously there is no way to condense 2000 pages into a small blog, so when it comes to any direct mail program it’s best to consult the Post Office or people that work directly with the Post Office, to ensure there are no surprises. While a .2 cent surcharge doesn’t seem like a lot, when it’s multiplied over 200,000 pieces it can add up!

Not sure how to start?

Contact the creative geniuses at Yelo Creative Group. We have years of experience dealing with the highly technical and analytical aspects of creative, direct mail campaigns. We’ll develop something amazing for you based on your target market, goals, and budget.

Many thanks to Cody McKendrick, Account Manager Extraordinaire, from Dumac for his assistance with this blog. He’s a genius when it comes to mailing campaigns (which is why we print with him a LOT)!