Do you include direct mail in your marketing mix? Then I'm sure you're not excited to learn that the USPS just announced a postage hike effective January 22nd, 2012. This represents the second postage increase in less than a 12-month period for the USPS.
Why is the USPS allowed to keep increasing postage rates? I get asked this question all the time, and as long as the proposed rate increase falls within the rate of inflation, there's no need to for approval from the US Congress or any other entity. In this case, the inflation rate is 2.1% (as measured by the Consumer Price Index) and the overall proposed hike falls below this number.
Will it cost more to mail a first class letter? Yes, the cost to mail a regular first class letter will increase from 44 cents to 45 cents. Of course if you want to stock up on forever stamps, you can preserve the lower rate for a longer period of time.
What about postcards? It will cost three cents more to mail each postcard; postage is going up from 29 cents to 32 cents-that's more than a ten percent increase-ouch!
How about foreign letters? Currently it costs 80 cents to mail to Canada and Mexico; this will increase to 85 cents. Mailing to all other countries is now 98 cents apiece, but will increase to $1.05 apiece.
How will this increase impact bulk mail rates? Both presort standard and first class presort are expected to increase about 2.1% across the board.
How will Every Door Direct Mail impacted? The rate increase will barely impact the relatively new Every Door Direct Mail program from the USPS. This new program was launched in April of this year, and it allows marketers to mail at the dazzlingly low postage rate of just 14.2 cents apiece; as of January 22nd, 2011 this will increase just slightly to 14.5 cents apiece. This is by far the most cost-effective way to utilize direct mail marketing to target by geography.
How will this impact those who mail at the nonprofit rate? I contacted the USPS directly regarding how this change will impact nonprofit postage since it was not addressed in their official press release. There's relatively good news for nonprofits.
To balance out the overall 2.1% increase, the USPS has opted to actually slightly lower the nonprofit postage rate for letter-sized pieces (6" x 11" or smaller) and slightly increase postage for flat sizes pieces that are larger than 6" x 11".
If you're a nonprofit, this means it's time to fold your newsletter in half before you mail it. A standard 8.5" x 11" newsletter mails at the higher flat rate, but by folding it one more time to 8.5" x 5.5" you can mail at the lower letter rate.
Remember, the post office prefers that you tab your newsletter at the top. If you don't want to worry about tabbing your newsletter closed, you can always drop your newsletter in a 6" x 9" envelope and still mail at the letter rate.
When was the last postage increase? The last USPS postage hike took place in April 17th, 2011. This increase was pushed through on the heels of a larger 5.6% increase that was rejected by Congress in late 2010.
The interesting thing about the last increase is that the rate of a regular first-class stamp was left unchanged. This meant that while the increase was felt by business marketers and nonprofits, it was largely unnoticed by the general public. It will be interesting to gauge public sentiment from this latest increase.
What other changes can be expected from the USPS? I'm disappointed that that the USPS has yet to push through a five-day delivery schedule. In terms of labor and fuel costs, this seems like a simple way to save a substantial amount of money.
While five-day delivery is relatively painless to the consumer, postal unions have leveraged their resources to fight against this every step of the way. I still think it's inevitable that the USPS will transition to a five-day delivery. My hope is that this happens sooner than later.
Although there's nothing that you can do to prevent the planned postage rate increases, smart marketers like you should use this as an opportunity to reevaluate your direct mail options. If you can transition any of your direct mail prospecting to Every Door Direct Mail, this will not only mitigate the postage increase, but it will actually save you a substantial amount of money in postage.
If you're mailing first class presort, you may want to consider using precancelled stamps and mailing at the lower presort standard rate.
If you have questions about which bulk mail options make the most sense for your organization, I hope that you'll please contact me for help.
Many thanks to my friends at Post & Parcel for breaking this story first.
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What strategies do you have for dealing with the planned postage increase? Please share your comments below.
