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.

Diamonds are Forever, and now so is Green...

Following up the success of the first "Forever Stamps"—a First Class stamp that can be bought at today's prices and used well, forever—the USPS has just launched another.

First in the USPS's Social Awareness series, each of the 16 stamps on the sheet offers low and no-cost tips to save energy and natural resources. And the predominant color is green. Naturally.

For instance, the stamps suggest using reusable shopping bags... fixing water leaks... using energy efficient light bulbs... maintaining tire pressure... switching off lights when not in use.

You know the drill. You've heard it before. These are the simple things that your parents tried to tell you about responsible behavior. Now the USPS is telling you, too.

Nag. Nag. Nag. Maybe you should listen this time.

But beyond the obvious value of preserving life on earth, there may be a financial benefit to using these stamps. Actuaries and Uncle Scrooge, take note!

Consider this: If you send 200 Christmas cards each year and you figure you've still got 30 Christmases ahead of you, that's 6,000 stamps you'll be licking in December. Maybe you mail 20 birthday cards, bills and miscellaneous whatnots each month. 20 x 12 months in a year x 30 years. That's another 7200 stamps over 30 years. Total: 13,200 First Class stamps in your future.

Buy in bulk today and pay just 44 cents forever. So even if rates go up, you're protecting your position at 44 cents.

No more postal inflation. Future rate hikes be damned! For a measly $5808 investment today you've protected yourself against future First Class postage rate increases.

Buy today and save enough $$$ in 50 years to put your great grandchildren through college! Or at least buy them a beer after class.

Now if the USPS simply invests that $5808 at 8%, in 64 years it will be worth big bucks! The mind boggles with possibilities. It's like buying futures when you can actually see into the future. It's so good it oughta be illegal.

The mind also boggles with possibilities of what will happen to our planet if more of us don't recycle, conserve water and use less energy. $4 a gallon for gas is just the tip of the iceberg. Oh yes, and the real icebergs—and the polar bears, walruses and seals who depend on them—will soon be just a bittersweet memory, relegated to the History Channel.

So consider this stamp a winning trifecta. Save the planet, just a bit, save some $$ in the bargain, and maybe most important of all, get ego-boosting "I told you so" points for reminding your less-than-aware friends about the importance of conserving our natural resources.

Way to go, Post Office!

Is this Great or What? The post office launches a new rate calculator service.

I mean, really, how many times have you pondered the post office's intricate postage rate charts to try to ascertain which class of mail would be best?

A dozen? Two dozen?

And how many times have you given up in distress and frustration, trapped between automation and non-auto rates, zone charts, piece-and-pound calculations, advertising vs editorial copy ratios, and other incomprehensible mumbo jumbo?

A dozen? Two dozen?

Mmhmm. I betcha it's more. A lot more.

Well, the post office feels your pain. And in an effort that's both noble and generous (and maybe just a tad self-serving) to help ease your distress, the USPS has come up with a neat little electronic gizmo to help you calculate your optimal postage rate.

If enough of us use this new tool, it could relieve the stress of certain customer service postal workers I've talked to. When I couldn't find the answers I needed recently, I called them. These poor souls fumbled through the same charts that had me foiled, but then it got worse. Much worse. They started reading the postal fine print. (Note to my Dear Reader: Never ever read postal fine print. It will drive you mad. Stark, raving mad!) Anyway, confusion gave way to obfuscation. But they labored valiantly onward, fighting their way through the regulations for 5 or 10 minutes until they arrived at an answer. Not THE answer, perhaps, but an answer none the same.

The journey was exhausting. For both of us. I was so relieved the search was over, I'd have accepted any answer short of my 401K balance. I tell you, there's got to be a special place in heaven for these folks who have to do this all day long.

Anyway, the Business Calculator on the Postal Explorer website lets you calculate prices for all shapes and classes of mail, both domestic and international. Simply go to pe.usps.com and then click on the Business Calculator in the upper left.

Not sure what's what? Need a dictionary to understand the inside-the-post office lingo? The site provides a navigation tool to give you definitions and links to other references. (Warning: This "easy to access" information varies from easy to not-so-much. Approach with caution.)

Not sure what you need? Calculate several rates and classes and compare the results. Simply hit the "Show History" button to have all the calculations you've just made shown in a nifty side-by-side format for easy scanning.

Not sure where the nearest post office is? Keep clicking. You'll find its street address. You'll even find its hours of operation.

So there you have it. Automation may force yet another group of postal workers into an early, well-deserved retirement. But the stress migraines we communally got from trying to ascertain the best postage rates should be a thing of the past.

And is that great or what!

Postal Rates Going up. But not for everyone. And then, not by much. Usually.

Unless you've had your head in the sand for the last decade, you know that the post office has been hemorrhaging money. Despite aggressively cutting jobs, closing facilities and taking draconian measures to staunch the flow, the loss continued in 2010, with the USPS losing $8.5 billion. (That's Billion with a "B"! dear reader.)

Desperate to reverse the trend, but hamstrung by legislation that mandates the USPS can not ask for increases in excess of inflation year over year, the USPS has proposed a very modest rate change that will increase postage 1.7% in a blended average over all mail classes. The increase, which goes into effect in April, will generate only about $340 million in 2011 to fill the deep hole that the USPS is in. But every little bit helps.

The really good news for mailers is that most will see minimal—if any—changes.

For instance, 4.25x6 postcard rates will rise by a penny, to 29 cents. First Class Presort rates for postcards will also rise, but only by fractions of a cent. And by "fractions of a cent" I mean one or two tenths of a cent.

Carrier Route saturation rates remain virtually unchanged—except for the same fraction-of-a-cent increases for DBMC deliveries, and at less dense delivery models.

Non-Profit and Standard mail will similarly remain virtually changed except in the fraction-of-a-cent category for less dense delivery models.

Periodicals—a target of recent huge rate hikes—will see only a 1.8% increase this time.

First class letters will remain at 44 cents. But for "overweight" letters, the additional ounce will go to 20 cents—one of the heftiest increases at almost 18%.

Other big increases will be First-Class flats which will increase by 5.3%, and first-class parcels which will see a 3.8% increase. First-Class international mail will also increase by 4%, and some parcels will see a whopping 11.3% increase.

So here's the bottom line: while there is a postal increase in the offing, the news is hardly doom-and-gloom for most of us. We should all be grateful for small (1.7%) favors.

Dear Misguided Customer...

Dear Misguided Customer,

I know times are tough and resources are scarce. Yes, I realize that everyone is trying to come up with ideas to pinch pennies and save money.

But some ideas are just plain bad ideas.

Yes, I know that God helps those who help themselves. I’m sure the Bible and Ben Franklin would agree. Self-sufficiency is a good thing.

Yes, I know that for years your organization has used volunteers to fold, insert, seal and stamp your appeals and newsletters. So what if the news is stale by the time it gets to its destination? Your volunteers get a sense of connecting with your organization and doing something good for their community. Tradition is a good thing.

Up to a point.

Continuing to do something the “way we’ve always done it” those are your exact words!—without questioning if that way works any more isn’t just bad, it’s plain stupid.

Yes, I know you’re the newbie on staff. You don’t want to shake things up or jeopardize the job it took you 8 months to find. I got that. But blind adherence to “Tradition” is costing your organization cold, hard cash—money that could be put into services.

I bet your boss would love to simplify her life, get newsletters and appeals out faster…and save the cost of your salary in the bargain. The only thing standing in your way is “Tradition.” Show her what I’m going to show you, you will be her hero on the white horse. And that’s a lock-tight guarantee.

Hang on. Here we go…

I betcha that years ago, when a newsletter or appeal was ready to mail, someone—probably your predecessor—called for all hands on deck from the office staff. But that got old really old fast. Maybe the task built staff esprit de corps, but when assigned duties weren’t getting done, there was a lot of bad juju.

So your predecessor put out the plea for volunteers, and volunteers—God Bless ‘em—responded. For years that cadre of loyal ladies folded and stuffed, licked and sticked their way through countless thousands of envelopes.

It takes 3 weeks to get out each newsletter, but it costs your organization nothing. Right? Let’s think about it.

You have to feed the ladies milk and cookies, and you have to keep supervisory staff on hand “just in case.” But that is minimal. Right?

You have to keep recruiting volunteers, which is a constant hassle, but…

Then once a year you have to throw a big “Volunteer Appreciation Gala.” While that gala costs a lot of money, and takes a bunch of staff time to coordinate, it is the price you have to pay to compensate your volunteers.

Your organization is stuck in the past, my Friend, in “Old Think.”

Here are the facts:

1. It takes 3 weeks to assemble, address, wafer seal and mail 10,000 newsletters. The “news” in the newsletters is old by the time it hits the mail. In this day of instantaneous news, stale stuff is poison. That’s an obvious image problem for you. It makes you seem out of touch. Fuddy Duddy. No wonder new volunteers are scarce.

2. Because your appeals aren’t unique to each donor, the likelihood is that you are as asking donors who could give $100 to give $10—your “default” ask. This screams out for better data management and personalization. It’s costing your organization big moola.

If points 1 and 2 address squishy unquantifiables, here is what Blind Tradition is costing in cold, hard cash:

3. It takes a staffer 4 hours every night to supervise the volunteer crew. If that person makes $20 an hour, you’re spending $80 a night to get “Free” labor. $20,800 a year.

4. Volunteer victuals are another $20 per night. That’s $100 a week. $5200 a year.

5. What does the Volunteer Appreciation Gala and extra wear and tear on your facility cost? I can’t even hazard a guess.

Discounting the Gala, you're at $26,000 a year in expenses to compensate your “free” volunteer labor force. Not enough to convince you to rethink Old Think Tradition? Try this:

6. You’re paying 17.9 cents each in postage per newsletter. It’s better than paying First Class, but as a non-profit you should be paying about 13.2 cents! That means you’re paying an extra 4.7 cents per piece in postage because you lack the basic mailing technology that the USPS requires.

Every month your 10,000 newsletters are contributing $470 unnecessary postage to the USPS. That’s another $5640 a year.

See how you're paying your -- salary $ 31,640 -- a year in unnecessary costs? That’s a lot of money any day, but in this economy that’s an enormous waste.

Yes, waste. Stupid waste.

And it gets worse.

7. You know that many the addresses you’re mailing to are wrong and many of the people have moved. But you don’t know which are wrong, and you don’t know how to fix your list. So you keep mailing to them. Yet every one of these badly addressed pieces is costing you money: Money to print. Money to mail.

If you have money to burn—and I know you don’t—then keep on using your Old Think Traditional ways.

The solution is obvious: move your direct mail marketing into the 21st Century by working with a professional direct marketing firm.

Work with them to clean up your list. Correct bad addresses. Get rid of deadwood. Run your data against NCOA—National Change of Address software. Cost: $50-100 plus any data clean up effort.

Now turn your mailings over to that mailing professional. Your postage will plummet and you’ll be in the mail lickety split.

Cost: Roughly $500 to process your 10,000 newsletters.

Production time: 2 days

Bottom line: 2 days versus 3 weeks. Best yet, the postage you’ll save pays for the mailshop. Not bad, eh? But there’s more: because your mail will have barcodes, it will arrive faster and in better condition.

You’ll see some cost increases in your appeals, but the extra effort to personalize letters and responses will bring in far more money than the cost of the personalization.

Don't know where to turn? Call me. I'll give you recommendations.

Don’t believe me? One of our nonprofit clients brought in 35% more than they had ever raised before just by personalizing the letter and the ask. Another raised increased its average gift to almost $90 simply by upgrading ask amounts!

It isn’t magic. It’s marketing. It’s using modern mail technology to replace outmoded though well-meaning volunteers.

Now don’t get me wrong. I’m not anti-volunteer. In fact, I’m strongly pro-volunteer. I just believe in using volunteers in ways that make sense for both the volunteers and the organization and the community.

There are, after all, things that a machine just can’t do. Like being human: Manning hot lines…consoling crime victims…counseling rape victims…hugging and clothing the newly homeless…feeding the hungry…providing hope and stability for those who need it the most.

Tradition is good up to a point. And you reached that tipping point some time ago.

It’s time to put your uniquely wonderful volunteers to work doing the work they can best do: serving the community your non-profit was commissioned to serve.

Self-sufficiency is fine.

Being a hero is even better.

Crystal Balling and Bawling: What’s ahead for the USPS?

Gazing forlornly into their crystal balls, postal prognosticators see another tough year ahead for the Postal Service. The recession may be receding for many of us, but for the USPS it is still grinding reality.

“The current business model does not work” Postmaster General John Potter commented recently. Unfortunately, he didn’t offer a model that does work. So for the USPS, it’s business as usual. And that isn’t good.

The USPS lost a staggering $3BB in FY 2009—even after bleeding off 40,000 jobs and trimming $6BB from its budget. It could have been worse. A lot worse. After making similar draconian cuts year over year—the USPS took a hint from GM, AIG, et al and went hat-in-hand to the Congress to seek relief.

On the theory that the USPS is Too Important to the Country’s Security to Fail (a logical extension of the Too Big to Fail argument) Congress voted to delay $4BB of a $5.4BB payment due to the USPS retiree’s healthcare fund. The USPS Financial Relief Act of 2009 delayed but did not eliminate that debt, thus giving the postal service a bit of a breather.

Despite the respite, there is much gloom at postal headquarters. Explaining decreased mail volume on the recession and the internet, postal management is looking for ways to fill an ever-deepening hole, while simultaneously realizing that as much as postal rate increases are needed, they will only drive mailers elsewhere. Furthermore, as postage rate increases are now pegged to the CPI rate in the previous year and that rate went deflationary in 2009, a postal increase in 2010 was nixed in October.

Putting some mail “on sale” over the summer and the fall may have helped boost mail volume—anecdotally my mailbox overflowed with catalogs—but official numbers are unavailable yet.

So USPS management continues to cut.

First on the chopping block are “underutilized” post offices. Rural areas are particularly concerned as a town without a post office can be de-listed as a legal entity. The DC area is not immune, either. Roughly 15% of our local POs are slated to close.

Next on the chopping block is Saturday mail delivery. While comprising only 11% of the weekly volume, Saturday delivery could save the USPS $3BB annually if terminated. The USPS would make exceptions for mail order prescriptions and for the high-volume holiday season. But how about making an exception for social security checks? For many seniors, getting that check is more important than getting a holiday card—even a hand drawn one—from the grandkids.

Post offices that survive the cuts would have curtailed weekend service, and no outgoing mail processing. People needing stamps or other services on Saturday would be referred to the internet. (Isn’t that ironic!) Consumers will need to plan ahead, procuring postage in advance.

Congress—acting with typical dispatch and derring do—has decided to put off any discussions until after the mid-term election. While widely seen favoring proposals to go to 5-day delivery and cut underutilized facilities, Congress realizes that closing post offices in their districts may mean losing their jobs in Washington. (Re-read the previous sentence about rural townships being de-listed as entities. Being wiped off the map does not please constituents.)

Cest la vie.

Madame LaFarge is waiting.

Don’t get Rooked: How to pay less for Postage

Every day someone asks me if I know strategies and techniques to reduce postage. And yes, I do. Lots of them.

But no, there is no “one solution fits all” answer. Getting a mailer to the optimal postage rate (please note I didn’t say “lowest!” rate—the highest rate may really be your lowest cost) is like playing three-dimensional chess.

A chess board is a simple black and red checkerboard pattern. It’s how you move those pieces to get to your goal that makes the game challenging.

Using postage regulations to your advantage is like playing that chess game.

To give you a strategy that will work for you (and generate an accurate postage estimate), I have to weigh your package size, weight and thickness; the distribution of your mailing list; the quantity you want to mail; and the delivery date you’ve got to have. I need to know if you are a for-profit, a non-profit, or running for elective office, as different rules and strategies apply.

Remember: Some chess pieces can move one square in any direction; some move only diagonally. Knowing which to move and when to move wins or loses games.

For instance, in Standard mail there are 27 postage rates for a letter. Even First Class Presort has 5 rates for that same letter. Throw in lumpy mail, thick mail, non-flexible mail, postcards and periodicals and you can see just how many variables I have to measure to get to your answer.

There’s one thing that is not variable, though. Unless you’re mailing a gold-leafed invitation wrapped around an original photograph by Annie Liebowitz, addressed with calligraphy by Zhang Dawo, postage will probably be the most expensive aspect of your direct marketing.

While every technique will not work for everybody—remember, a pawn and a rook can’t move the same way—here are 10 Tips to help you reduce that not inconsiderable postage outlay:

1. Clean your data. For every bad address you get off your datafile, you’ll save printing and postage. You’ll also increase your response rate, but that’s a different story. Data cleaning starts with NCOA, then goes into internal de-duping (look for identical names and identical addresses), running it against deceased data.

If you have the time and will be mailing multiple times, consider getting ACS—Address Correction Service. It will take you several weeks to apply, but will mean that we can use intelligent barcodes for you in the future (that’s another story, too) so you can track your mail in the postage system, AND you’ll be able to electronically get back corrected addresses for FREE.

2. Presort. You’ll save about .10 per letter at First Class Presort rates and twice that at Standard and about 30 cents per letter at Non-Profit rates. Yes, you can have a live stamp in any of these classes.

Of course, we have to NCOA (run your data through National Change of Address software) then presort, and sort/tie/tray, so some of your advantage will be eaten up with post office-required processing steps.

At small quantities—and that depends on the piece you are mailing and the destination address—presorting can actually cost you more than if you mailed straight First Class. Be sure you know the ins and outs of the postal regs before you reflexively say “Standard!”

Standard is not always cheaper and it is almost always slower. Unless you’re running for political office, in which case I’d suggest you mail at Standard Red Tag Political rate. You’ll get Standard postage rates but First Class delivery.

3. Mail Smaller. Flats—pieces larger than 6-1/8 x 11-1/2” cost more to mail. Of course, they stand out in the mailbox, so they have more visible. But that visibility has a price.

Postcards can be as small as 3.5x5 or as large as 6x11. Depending on the size of your postcard, the distribution of your list, and the needs to get it delivered fast, you may do better mailing at First Class, First Class Presort or Standard. Ask us to do an analysis for you.

4. Mail lighter. Keep your mail below 1 ounce in weight if you are mailing at First Class or First Class Presort. If you opt to mail at Standard or Non-Profit rates, you can mail 3.3 ounces for the basic rates. Hence, if you know your mailing piece is a heavyweight, reconsider mailing at First Class.

And of course, if lower postage is your thing, keep your piece thinner than ¼ inch.

5. Mail more. Higher mail volumes typically can reduce per-piece production—and often postage—costs. But not always. It depends on the distribution of your list.

6. Mail in highly concentrated areas. It’s easier for the post office to deliver mail that is highly concentrated; they reward mailers with lower postage rates. The optimal low rate is CRRT—Carrier Route—where the carrier delivers one piece to every address on his route.

7. Be sure your mail is automation compatible. Mail that is too stiff (or not stiff enough) or “lumpy” or square or outside aspect ratio rules or too highly reflective or with insufficient contrast between address and background or otherwise non-machineable will cost you money. Not sure about your mailing? Call us! We will help you figure it out :)

8. Be sure your mailing panel meets USPS requirements. The USPS just changed addressing requirements for self-mailers, newsletters and flats. Put the address panel in the wrong orientation and you’ll pay 10 cents more in postage. Be sure to check USPS design and folding requirements before you put ink to paper.

9. Comingle. If you’re mailing more than 25,000 pieces at a presort rate (ie First Class Presort, Standard or Non-Profit) you may find that using a comingler can save you postage.

10. Dropship. Mail going to a single, specific destination can often save time and $$ by being dropshipped to the delivery point SCF or BMC.

It works this way: We prepare the mail. We then take it to the postal facility where it is entered into the mailstream. But instead of being released into the mailstream at that point, it is put back on our truck with paperwork that says the postage has been paid and the mail passed postal inspection. We then drive the mail (or hire a long distance trucker to drive the mail) to the destination SCF or BMC. The savings per piece: approximately 4.3 cents. Hence, to save on postage, the cost of the shipping must be less than the postal savings.

It’s not just about postal savings, however. Dropshipping can cut a week or more off delivery time—even as it is saving $$. If time and $$ are both important to you, then you should be discussing dropshipping with us.

Like chess, minimizing postage is a game of strategy and nuance. Knowing these 10 tips will put you way ahead of your competition, but be sure to check with your local Mailing Requirements office and/or us for details specific to your own project.

Finally, work with us! We have your interests and needs in mind. We will help you make the right financial decision for your specific project.

And if someone tells you that the job can print and mail for less than the cost of published postage rates, run for the door. They are not your friend. They have you in Checkmate and you don’t know it yet.

The Deadliest Quote!

Determining postage is not for the faint of heart

I work in a very dangerous job. No, I’m not snagging crabs out of a frigid arctic ocean, or felling 3-ton trees in a rainforest. I don’t work in a coalmine or build bridges. It may not be one of the most death-defying jobs, but I promise you, my job is even riskier!

You see, I work with the US Post Office.

It starts out innocently enough: You’re on the phone with me. You’re a new client, with a new direct mail project—your first! The boss is pushing you to get answers. But you don’t know if you want to mail a postcard, a flyer, a brochure, a newsletter or a letter. And you don’t know your own data.

We select an option and work through all the necessary specs. Size of piece. Number of colors. Paper stock. Bleeds. Number of pieces. Class of mail. Stamp, meter or indicia. I am feeling better about this process. We’re working toward a manageable end goal in tandem.
And then the wheels fall off the wagon.

“What’s my postage going to be?” you ask me innocently.

Oh no! It’s the dreaded unanswerable question!

I stall. I sweat. I try to change the subject. My mind races. I’m stepping into a bottomless pit and I know it. Any answer I give you will be wrong.

What kind of a person are you? Will you accept when I say this is ESTIMATED postage? Will you hold it against me 2 weeks later when we discover I was one tenth of a cent off? Will you question my expertise when I tell you I can’t give you a simple two-digit answer—NOW? Will you understand that to be perfectly accurate we have to have your data and determine its distribution while factoring the size, weight and thickness of the piece you’ve decided to mail?

Will you wait patiently while I try to explain how I can’t answer that question with absolute accuracy? Will your mind wander as I present my truncated explanation of 5-digit sorts…3-digit sorts…AADC…Automation…letters…flats…dropshipping…co-mingling…SFC or BMC rates?

Will you cut me short so my carefully crafted, oft-rehearsed explanation makes no sense? Will you graciously allow me to finish and then ask again, perhaps a bit impatiently, “OK, so what’s the postage?”

My mind is awhirl with the possibilities.

All the possibilities are jumbled up in my head as I’m calculating what would work best for you. There is a lot to consider, and my circuits are overloading.

But curious minds want to know. You repeat a little more insistently since I obviously didn’t hear you earlier: “What’s my postage going to be?”

Deep breath. Clear the mind. Calm the raging mental storm. A sip of tea. Another deep breath. OK, here we go, plunging in without a life jacket:

Dearest Client, let me help you. Please tell me about your data. Is it local? Regional? National?

If you can’t tell me that basic fact, I can’t give you anything remotely accurate. I can give you ranges, but your boss is looking for a nice, neat, simple answer. Something he can put in a spreadsheet. A range of numbers won’t hack it.

If you don’t know your data distribution, how am I to know how it will split out over the 27 different rate categories that this one piece of mail could qualify for?

If you’re unsure about the size of the postcard you’re mailing, there could be 54 possible rate categories—just in Standard mail. Add CRRT and you’ve added another 9 possible rate categories. Add First Class Presort as a consideration and you’ve just added another 6 categories.

Complicating the situation even further, in many mailing projects there can be 5 or more postal rate categories, depending on the distribution of your mailing list.

The USPS’s rules are so complex they fill a volume the size of the Manhattan phone book. Even their experts in mailing requirements disagree as to the interpretation of various rules and sub-rules. It is a daunting question you put before me. And you want your answer NOW!

I know my chance of calculating your postage rate exactly right is comparable to my chances of winning the Lottery: nil.

If I under-calculate your cost, I’m a goat if when we presort your job. “Ellen promised me the postage would be xx-cents each! We won’t pay a penny more!”

If I over-calculate, we lose the job. Some guy in Florida has promised he’ll print and mail your 20,000 postcards for $100 over the postage cost I’ve just quoted you.

I know that $100 won’t buy the paper to print your job on, much less print and mail it. I know you’ve given me one set of specs and him another, but you insist you’ve given both of us exactly the same thing.

Pfffft. Just like that your job is gone.

Trying to explain to you, Dear Client, the byzantine postal regulations and relating them to your job is a guaranteed anxiety attack.

Trying to explain to your boss why you lost a simple postcard job to some guy in Florida who is clearly not playing by the same rulebook is another.

Like I said, mine is a business fraught with risk. Thank you, USPS.





Working in a coalmine is looking better all the time.




43670 Trade Center Place,
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Phone: 703.996.0800
Fax: 703.996.0888
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www.paulandpartners.net
sales@paulandpartners

Intelligent Barcodes are here!

They may save you $$ and aggravation. Eventually.

If barcodes—introduced about 25 years ago—revolutionized direct mailing by automating delivery, then intelligent barcodes go one step farther.

Postnet barcodes—that familiar “picket fence” on address panels—is really just a machine-readable presentation of the recipient’s address, sans the recipient’s name. The system has been evolving since its introduction.

V2 added 4 more digits after the basic 5-character zipcode to accommodate growing demand for new addresses. V3 added destination point barcodes (two additional machine-readable digits), but it didn’t enhance delivery speed, it didn’t reduce cost and it didn’t offer trackability.

When FedEx and UPS proved that they could track packages via barcodes, the bar was raised even higher. USPS knew it had to develop a comparable program or continue to lose market share to its two chief competitors. So about 10 years ago the USPS started working on the challenge. Voila! The Intelligent Barcode (IMB).

The IMB introduction took years longer than expected, cost much more than projected and did not solve everything it should have (this is a government project, after all!) It is, however, better than any predecessor and it becomes mandatory in November 2009.

The IMB which resembles the old barcode plus a reflected inverted mirror image of itself, increases the amount of data-on-board significantly. As a result it can do more. For instance:

You may get lower postage rates. It’s not firm yet, but the USPS has proposed that IMB-encoded letters and flats pay lower rates than mail using Postnet barcodes. If approved, this is doubtless a limited time offer as postnet phases out in May 2011. Stay tuned.

Get Free Address Correction Service (ACS). Yes, you still have to NCOA your data before you mail, but the new ACS service can catch outliers who made it through NCOA. Get corrected data electronically or the old fashioned “hard copy” way. You pick ‘em. Warning: setting up your account can be daunting.

Track your mail through the postal system with real-time on-line reports. Ever wonder what black hole your mail disappeared into? IMB will help explain the mysterious and find waylaid mail. And no, the mailshop is NOT responsible for your mail once it has been turned over to the USPS.

Which brings up:

USPS accountability. In a “Better Late than Never” move, the USPS is finally—200 years after Ben Franklin started it — putting accountability measures into place for itself. The IMB will help the USPS tell where there are repetitive roadblocks and service slow downs so the USPS can take corrective measures. The USPS’s standard of service states that 90% of domestic standard mail will reach its destination within 10 days. IMB will help prove (or disprove) the case.

Since the long-awaited IMB phase-in period has finally begun, expect to see the new barcodes in your mailbox soon. However, not all the benefits are immediately available to everyone. Thousands of smaller post offices around the country still lack equipment needed to support ACS and mail tracking.

OK, it’s not perfect. It never is. But IMB is a step in the right direction. In the short term it can help keep your data cleaner and it might save you postage. In the longer term it will give you information not currently available about tracking your mail.

All good things take time.

PAUL & PARTNERS

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

Psst! Want cheaper postage? I can get it for you Wholesale!

In 1968, Dustin Hoffman’s character in the Graduate’s learned that the future was Plastics.

In 2009, the future in direct mail may be Co-mingling.

So what is this thing, co-mingling?

Co-mingling is a process by which mail from many direct mail service bureaus and many clients served by those service bureaus are mingled together in another—possibly distant—location. The goal is to increase mail volume so that more pieces of mail go to one area. That effort results in a higher mail density (ie distribution concentration) which in turn reduces postage costs.

That’s the process in a nutshell. Here is how it works:

The co-mingler takes your postcard addressed to someone in 20001 together with my newsletters addressed to folks in 20001, and someone else’s fundraising solicitations addressed to people in 20001, then puts them on a huge machine that sorts them by destination address. Result: all the various pieces addressed to 20001 are all bundled up together in the optimal distribution sortation.

To get to the best sortation discounts (5-digit) you need at least 10 pieces of mail addressed to the same 5-digit zipcode. The next level of sortation is 3-digit, ie the first 3 digits in a zipcode. Again, you need 10 pieces of mail addressed to those 3 digits to get a reduced rate. Can’t get there? There are two more levels which are roughly regional and wider regional.

Co-mingling puts your mail in the mix with everybody else’s mail, and thereby increases the likelihood that your mail will fall into 5-digit or 3-digit sortation.

The post office rewards density of mail. The postage differential between 5-digit and regional sortation can be as much as 4 cents a piece in Standard mail. Voila! Co-mingling to the rescue.

But wait! There’s more!

The co-mingler puts all our various pieces of mail addressed to 20001—which are now in presorted order—and ships them to the SCF (postal Sectional Center Facility) serving 20001.

Again, the postal system rewards mail delivered closer to its delivery point. You can save as much as 4 cents more a letter by delivering it its DSCF—Delivery point SCF. After all, you’re paying the freight, not the USPS. So they save $$. Eureka!

Obviously, the post office is encouraging co-mingling. It means they have to do less work, and in this age of reduced staffing, that’s a big deal.

Mail houses like co-mingling because they can get their clients better postage rates.

End users love co-mingling because it can mean lower postage rates.

From one extreme to the other—from worst-case scenario to best-case scenario in Standard class—mailers could save about 9 cents per letter in postage. It all depends on density and delivery address.

It sounds like a win/win/win. But there is no such thing as a free lunch. There are some potential trade-offs. Here are 4 things to consider:

#1. Co-mingling works with First Class Presort, Standard Presort and Nonprofit Presort mail. If you’re mailing at these rates, then you’re looking for ways to save $$, so co-mingling could be just the magic bullet you need.

#2. Plan on it taking extra prep time. The mail has to get to the co-mingling plant. It can stay there for several days as the co-mingler accumulates enough mail to fill the truck headed to North Piscataway. Then it has to travel to the DSCF.

If you’re able to plan ahead and allow for the extra time, co-mingling might be just what you’re looking for.

#3. Small national mailings benefit more than large local mailings. Spread thin? Have addresses all over the country? Using co-mingling to get to higher density may reduce your postage. However, if you’re already blanketing an area, co-mingling won’t help.

#4. There’s a cost to this service, but the postage savings should more than compensate for the extra fee. You’ll be quoted a specific fee based on the number of pieces in your mailing.

So there you have it. The post office—which is already outsourcing much of its inter-city trucking to private shipping companies and drivers—is now outsourcing its sortation process to other private companies.

Privatization--It’s the future for the USPS. And co-mingling is a large part of that future. Co-mingling may not mean as much as Plastic to Mr. Joe Sixpack, but for those of us in direct mail marketing, it is just as revolutionary. ~


Interested? Wanna save on postage?

Boy, do we have a deal for you!

Call Paul&Partners to schedule an envelope mailing during July, and we’ll laser your letters for 50% OFF our usual price! If your job qualifies for co-mingling, we’ll save more $$ on your postage, too!

Here’s the dreaded fine print:
Minimum quantity of 2500 letters. Job must mail during July. You must mention special code 0709C to get this special offer.

Call us today! 703-996-0800

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

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

Get Personal. Get Results.
Part 1 Part 2 Part 3 Part 4

Personalizing Prospect Marketing

First, a definition.

Everyone starts as a prospect, ie someone that a marketer believes might donate/buy/subscribe/join/attend or in some fashion show interest in the sponsoring non-profit/company/magazine/organization, etc.

Not all prospects are created equal. To paraphrase George Orwell, some are more equal than others. Hence the first challenge is to find the right people who might want to donate/buy etc. That effort is called “prospecting.”

Looking for prospects starts with a definition of your optimal buyer. Then you define and refine until you get a many faceted profile.

Like grizzled 49ers of old prospected for gold in them thar hills of California, today’s frazzled marketers prospect for gold in the thousands of lists on the market. With the right list and the right approach, the marketer finds his gold.

Finding good prospects just starts with list selection.

Looking for donors? Go to donor files. Select donors to allied organizations. Simple. Or maybe not.

Looking for business owners? There are a thousand lists. Drill down through company size, gender of owner, location (and number of locations), industry sector, number of employees, type of organization (franchise, LLC, Inc, privately/publicly held, HOBO, etc) to find the list you need.

Now you can use the new technology of “data mining” to get even further into the prospect’s head.

Are you asking for the donors to support a non-profit summer camp for indigent children? Women would probably be your best prospects, and women with children would be even better. Families with household income over $xx would mean the family has expendable income to share, and those who have shown their love of nature and support for children’s causes would improve your “hit” rate.

If you’re looking for business owners who travel a lot, maybe those with multiple office/plant locations would be a starting point. If they have a second home, that’s a plus. If they are pilots or sailors, that helps define them as well.

Now you’re finding out what really makes these people tick.

Simultaneously with extracting the gold from the lists, you need to develop creative copy and design that maximizes the impact of your message. Find out what their individuals needs and interests are, then design your message to emphasize those issues.

New production technologies allow for variable full color graphics and copy. Here is how a few companies are using the latest in personalization technology to enhance their prospecting efforts...

Case Study #1. The exclusive mountain resort community. They sent oversized postcards to married couples with household income over $xx, in a specific geographic region. Artwork was based on the recipient’s ethnicity, age and hobbies.

If the recipients were Caucasian, 40-60 years old, so were the models. If he liked golf and she liked tennis, the male model had golf clubs in his hands; she had a tennis racket in hers. They stood in front of the magnificent clubhouse with a world-class view of receding mountains.

The graphic designer used the recipient’s name in color to eye-catching effect, thus creating a split second opening for the recipients to soak it all in. It wasn’t much of a stretch for the targeted couple to see themselves in the picture as it spoke directly to them and their interests.

Case Study #2. The Long Term Care Insurance provider. His marketing package utilized variable art and copy based on the recipient’s age, gender, ethnicity, physical location, and household income. The photo showed a couple waking on the beach with the statement “Now is the time to think about Long Term Care Insurance.”

The copy speaks to women by name as they tend to outlive their husbands and therefore need this product more, and because women make 70% of insurance decisions for their households. “Hypothetical” tables based on the couple’s age and income show what a plan could cost—and could deliver.

Case Study #3. The real estate agent. In an economy that had produced zero house sales for her the previous year, she opted to mail renters telling them to stop wasting rent money and buy a home.
The renters, selected on geographic proximity to her office as well as their household income, got an oversized postcard showing a photo of a home with a curbside mailbox. The home was in the background in soft focus; the mailbox was center front and crisp. On each mailbox was the name of the targeted family: Ramirez, Wong, Williams, Curtis. Subliminally the recipients could “see” themselves in this picture, in their new home.

These three examples show how the newly available filters can help inventive marketers position themselves in unique ways, to people who are specifically qualified for those messages. All three were working with prospect lists, using new technology and fresh creativity to stand out in the mailbox.

Are these individualized approaches more expensive than a traditional one-shot-fits-all marketing approach? Yep. Each individually prepared piece has a different mix of graphics and copy going to highly selected and qualified targets. That effort does have a price.

Are these personalized approaches more successful? Yep again. People see themselves and they respond.

The result: companies mail smaller quantities and get the same number of leads.

Technically, this extreme personalization process is called VDP or Variable Data Printing. It requires lots of computer power, marketing expertise and a precise mix of people and equipment to pull it off.

However, unlike shot gun marketing, with VDP you can approach only people that you know are the perfect target for your message. So you print less (that’s good green business practice), pay less in postage (that’ll keep the bean counters happy) and generate a higher return rate (that’ll make the boss ecstatic).

As the pharmaceutical ads say, VDP isn’t for everyone. It’s more expensive, it takes more time in development, and it can be nerve wracking waiting for the creative and data processing and programming to come together. But when it works, it’s amazing!

It’s state-of-the-art direct marketing. Until the next new-best-thing comes along.

Part III of this series focuses on personalization in housefiles.

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