Postage goes on Sale this Summer. The USPS plays Texas Hold'em

Excited rumors have been circulating for several weeks now that the post office is preparing to put postage "on sale" this summer.

Rumor confirmed.

But like most rumors—and poker games—there's a grain of truth, a lot of misdirection, and real-time strategies and intricacies that haven't been thoroughly worked out yet. Unlike most poker games among friends, the stakes here are enormous.

Here's the deal as I understand it.

The USPS says that a small number of organizations spending more than $250 million a year on advertising could qualify. These unnamed 16 top advertisers (that's it—just 16 companies are being invited to participate!) will be expected to mail between 500,000 and 1 million pieces each of First Class or Standard mail.

Those are the basic rules. Limited players: only a chosen few can play at these rarified heights.

Lots of mail: this bargain comes at a price for the advertisers. And someone—but I don't know who—is developing a unique set of metrics to measure the success of the campaigns.

But is that someone playing with a marked deck? For example, who wrote "the unique set of metrics?" I dunno. How are these metrics different? "Unique?" I don't know that either. But that is where the cards could be stacked.

On this side of the table, the USPS is putting a lot on the line. If a mailing's response does not achieve "success," (as defined by that "unique matrix"), then the USPS will refund the participating company up to $250,000 in postage.

On the far side of the table, the participating companies have skin in the game, too. If their mailing test fails (that "unique matrix" again), the USPS will not refund printing and production costs.

Explaining the USPS's thinking behind this high-stakes challenge, a USPS spokesperson said "The Postal Service recognizes that... a number of large advertisers do not employ the mail as a key component of their advertising mix. We strongly believe that in any intelligent, integrated campaign, mail can play a part. The objective... is to put our money where our mouth is and to prove to large advertisers that mail will improve the ROI of their marketing campaigns."

The "sale" may be extended for as long as two years, but is limited to organizations spending less than 0.36% of their total ad budget on postage. It follows on the heels of other postage "sales" that the USPS initiated in 2009 and 2010 in an effort to boost lagging volumes.

Like a marathon poker tournament, apparently we won't know how this ambitious effort fares for quite some time. Let the chips fall where they may.

Printing and Direct Mail: We're in a Growth Industry! Or you can't believe everything you hear.

Doom-and-gloomers say that print is doomed. Direct mail is a goner. What started with the ancient papyrus-wielding scribes, grew exponentially when Gutenberg discovered offset printing, is finished. Caput. Stick a fork in it, they say. It's done.

They name the internet as the one singlehanded instrument of destruction. They cite video-game-generation short-attention spans as an accomplice and falling postal usage as evidence. Those of us in the putting-ink-on-paper business might as well be selling buggy whips, they say. We're done for.

But whoa, there, guys. Not so fast!

A leading marketing research firm, the Winterberry Group, has dramatic evidence that flies in the face of these print pariahs.

Winterberry predicts that direct mail spending will grow by 5.8% this year; while direct response print will increase by a not so robust, but still sweet 2%. But Digital and the variable data printing it provides—will increase by a whopping 14%.

14%! Wow! But let's back up a bit.

2008 to 2009 was catastrophic for print-based marketers. Printing and direct mail volume declined by a staggering 16.7% in that one 12-month period, ending up the year at $43.8B sales volume. But by mid-year 2010, things were turning around. From July to December, volumes bounced back by 3.1% producing an EOY value of $45.2B.

Winterberry predicts that all signs are for 2011 to continue the rebound, increasing by 5.8% and coming in with an EOY value of $47.8B—$4B higher than we were just 2 ugly years ago. Not bad for an industry on its deathbed, eh?

So what's going on?

The great recession seems to be easing. People are spending more again, and many marketers are returning to the mail. Furthermore, the long-touted email revolution isn't panning out quite the way it had been expected to. So marketers are abandoning the electronic world for good old fashioned print again.

At the same time, USPS-enforced regulations to keep lists cleaner, and greater acceptance of detailed response analytics mean that mailers can mail smaller, but more accurately and with more highly targeted campaigns. Hence, they should see better ROI for their efforts.

The USPS is doing its part by not seeking huge postal increases for 2011.

Digital is the big winner because as marketers mail with greater specificity, their volumes drop. And as you—savvy marketer that you are—probably knows, digital is more economical at lower run lengths. Added to the digital difference is digital's ability to create custom pieces for each recipient, thus targeting the messaging even more tightly.

So before you believe the doom-and-gloomers who are predicting the end of the print world, please consider that we are in rapidly evolving times. It's happened before and it is happening today.

We're at the conflux of technological availability and economic necessity. Printing and marketing is changing; it is not going away.

Get Personal. Get Results. (Part 3 of 4)

Get Personal. Get Results. (Part 3 of 4)

Part 1 Part 2 Part 3 Part 4

Getting Personal With Housefiles

If direct marketing prospecting is a lot like dating as you sort out whom to approach and how to approach them, direct marketing housefile work is doubly difficult. It’s like being married.

You think you know what makes the person tick…and then voila’…he changes. Yesterday he liked meat and potatoes, followed up with cigars and cognac. Today he is tofu and salads, followed up with spring water and a sprig of mint.

But before we agree to change and grow old together, let’s define where we start the journey. If marriages start at the altar, a housefile starts to build when a prospect says “I do” to your proposal to buy/donate/subscribe, etc.

Hence a housefile is a list of people who like what you do and have supported you. Your organization/company owns and (hopefully) maintains this list. These are people who have donated to your cause, bought from your company, attended your events, subscribed to your publication, joined your organization, or in some way have entered into your sphere. You own these names.

Since you own these names, you’ve got more at stake here. They should be your “bread and butter” since they’ve already opted in at least once before. When you’ve got something to pitch, these should be you’re A#1 go-to-guys. They should know who you are, what you do, and why you are contacting them.

Or maybe not.

You have been sending them marketing pieces that explain your position. Right? You have been asking them to renew. Right again?

Despite your best efforts, brilliant copy and compelling graphics, your housefile returns have been dwindling of late, and you can’t figure out why. (This is the moment when that beef-loving, cognac-sipping spouse says “You’ve totally misunderstood me!”)

But before that ugly wake-up call, consider that maybe you don’t know who they are, why they are on your list or how you should contact them. If this is the case, it is a huge opportunity for you to research your own base so you can get personal with them to the best effect.

In days of yore, you would keep contacting your housefile with the same message over and over again. They would continue to support you, or—in 20% of the typical housefile each year—they would vote with their feet, and leave you behind.

Today there is a lot more competition for their attention. You’ve got to be better—smarter!—than the competition. Unless you know more about who is on your housefile, unless you know what they value, what they believe and think, you may be pitching the wrong message to them.

Maybe their first foray with your company was a fluke or a momentary aberration. (That spray-on hair-in-a-can surely did look great at 2:00 in the morning!) But maybe it was really part of their core values. (They are among the 400,000 balding men in this country who are desperate to find a “cure.”)

You keep trying to sell more hair-in-a-can to the poor guy. But you’re totally missing the deeper need.

Today, you can run your housefile through data filters. You can understand your folks better, and determine what compels them. Then you can understand how to address them.

For instance, a very basic filter is an NCOA—National Change of Address. NCOA runs your data through the most current USPS-approved data to ascertain if your address of record is good, and if your person still lives there.

If there is a problem with the address—(and NCOA will give you almost 40 reasons why an address can fail. Some are fatal, some are merely inconvenient)—NCOA will let you know. If your addressee has moved, NCOA will tell you where they’ve moved if USPS knows. If a business has closed, NCOA will tell you.

You can go a little deeper by running your data against Social Security data. Often “Forwarding Address Unknown” means your party has taken up permanent residence in Heavenly Acres. Running your data against Social Security data will tell you. If he is deceased, there is no point in keeping him on your housefile. The likelihood of him purchasing/donating/subscribing to you any more is nil. He is truly deadwood.

There are other filters, too, that might be invaluable to you. If there’s a possibility your folks may have found their way to a long-term, involuntary residence at Leavenworth, then run your data against prison data.

If knowing the likely net worth or annual income of individuals on your housefile is important to you, we can find out.

If you need to know his hobbies, interests, politics, marital status, etc, the information is there for you.

If knowing that he is losing his hair because he has cancer and is likely in chemotherapy, you can find that out, too. This information is available. For a price.

If you do nothing to find out about your housefile, you’re likely to lose 20% of them each year to moving, changes in their financial situation, and changing interests/motivations.

If you proactively try to learn something about them, you can keep more of them on your active roster because you can address your marketing materials to them specifically, thus building and reinforcing the relationship that you need to have with your housefile.

Here is how several of our clients have used personalization technologies to improve their response rates:

Case Study #1. This non-profit organization helping third world orphans had not cleaned its housefile in over 50 years. Simply by doing a merge/purge to remove duplicate records, then running those addresses through NCOA and Social Security, we were able to determine within days why their response rates were dropping even as their production costs were rising.

Some donors were in the data six times. Hence, every time the organization mailed, these donors would receive 6 messages. At best, 5 would go ignored. At worst, the donors thought the organization was wasting money. And the donors were right!

That is, the donors who were still alive.

After running 153,000 records through Social Security, we had a housefile of about 28,000 unduplicated, still living donors. Only about 18% of their housefile was viable!

The client was devastated. They were sure we had destroyed their fundraising base. When we mailed it, we found something else instead. Printing, production and postage costs plummeted; and return rates skyrocketed. Their ROI improved instantaneously.

But wait! There was more! We asked the client to make a leap of faith by changing their packaging, too.

Instead of mailing one-size-fits-all generic letters with generic asks in window envelopes, we opted for the more expensive but vastly more productive approach of sending personalized letters in closed face envelopes. And of course, we used real stamps.

Hence instead of asking everybody for a gift of $25, $50, $100 or Other $____, we asked for donations commensurate with previous donating history. We also asked donors to increase their giving level, using a simple algorithm. $5 givers were asked to give $5 or upgrade to $7.50 or $10; $100 donors were asked to give $100, $150, $200.

We also learned a little something about each person on the file, so we could personalize the solicitation specifically to that recipient. Was he donating because he was a foster parent to one of the orphans? We mentioned the child by name. Had she visited the orphanage in 2005? We mentioned her visit. Have they been giving since 1995? We mentioned that little fact, too.

The results were astounding. $50 donors upgraded to $100 donors. Multi-givers became the rule, not the exception. Donors responded with personal notes, thanking the organization for the opportunity to help the children.

Bottom line: Several factors played into this success story.
#1- list maintenance.
#2- researching and using information about the donor in his individual letter.
#3- using personalization technology like laser-personalized letters and match mailings (where the recipient’s name and address on the envelope match the name and address on the letter) to create a truly one-on-one experience for each donor.

Case Study #2. A political client sent a solicitation letter to his housefile. In that individually personalized letter, the candidate reiterated his position on various issues, and he thanked each donor for his/her previous gift of $x. He enclosed a small, four-color photograph of himself, his wife, their children and their dog in front of their home. Scrawled across the lower right corner of the picture was the personalized message in blue handwriting, “Dear Joe and Mary, your gift of $x meant the world to Joanne and me. Thank you.” It was “signed” by the candidate.

A simple thank you scrawled on a photo. It didn’t cost much, but the personalized message got attention in a big way.

VDP—Variable Data Printing—made the photo and the message a simple one-step process. Matching the photo to the letter to the reply to the envelope, made it 4-way match mail. It was a personalization tour de force.

Within days, gifts were pouring in. And so were photos of Joe, Mary and their family. By the time the last photo arrived, the staff had wallpapered a room with photos of their supporters, and the campaign went on to victory.

Several factors working together created this success story:

#1- The politician realized that people like to be thanked. And if he can thank them citing their previous gift, it’s even better! It helped reinforce the relationship that is at the heart of every housefile.
#2- Sending the photo of his family made this man real to his audience.
#3- Adding the personal thank you—naming the recipient by name, and citing his specific gift amount—locked in the relationship.

Case Study #3. Another political candidate we helped was running in an ethnically diverse district. There were pockets of Korean speakers; Arabic speakers; Spanish speakers, Vietnamese speakers.

So we ran an ethnicity filter against the district voter file and found out who likely spoke Korean, Arabic, Spanish, or Vietnamese as their first language.

We then prepared materials for each group using appropriate photographs, graphics and language for each. We had skilled translators change the original message in English into the various language groups, and we laser personalized letters to these voters explaining why they should vote for this candidate.

Each voter got several colorful packets of material written in his native language.

For many of these voters, this may have been their first American election. It set a high bar for future efforts.

What does this mean to you?

We'll address that issue in Part IV of this series.

Get Personal. Get Results. (Part 3 of 4) Part 1 Part 2 Part 3 Part 4

43670 Trade Center Place, Suite 150, Dulles, VA 20166
Phone: 703.996.0800 Fax: 703.996.0888 1.866.365.2858
www.paulandpartners.net sales@paulandpartners

I am soooooo bored...

I am sooo bored. For a workaholic like me, a week at the beach is an eternity away from the excitement of the office. Sunbathing isn’t good for me. Getting sand in my ears and everywhere isn’t my thing. Sipping Pina Coladas before 4:00?—just too decadent. Yes, I am a desperately bored woman.

But I do have my computer, so I’ve decided to turn to you for help.

Send me your questions about postal regulations, direct mail strategies, postage pricing, using personalization, getting the best bang for your direct marketing buck. Or whatever is on your mind. If I can help, I will.

As your own personal downscale Dear Abby, I’ll try to offer advice geared to save you money, minimize your postage outlay, and enhance your response rates.

I want to hear from you. No, I need to hear from you! ellen@paulandpartners.net or 703-996-0800

Save me! My brain is stupefying.

Paul&Partners Direct Marketing
43670 Trade Center Place,
Suite 150, Dulles, VA 20166
Phone: 703.996.0800 Fax: 703.996.0888 1.866.365.2858
http://www.paulandpartners.net/ sales@paulandpartners