3 things you can be sure of in life: Death, Taxes and Postal Rate Increases!
The United States Postal Service announced that it will be raising rates on letters, magazines, and marketing mail by as much as 6.8 percent this August. Part of Postmaster General Louis DeJoy’s 10 year plan to financially stabilize the Postal Service, this increase is not only historic for its size, but also for the fact that this is the second postage increase in 2021, placing it in the middle of the calendar year.
For perspective, this postage increase equals the size of the past 5 years of increases combined. While any increase in price requires a business to pivot, having an increase of this magnitude in the middle of the year adds additional layers of complexity from a budgeting and planning perspective. Marketing budgets are set and oftentimes inflexible, meaning that in order to accommodate this postage increase, we’re going to see a major market shift to smaller mailings. Does this spell the beginning of the end for mass direct mail campaigns? How can you communicate this to your clients without scaring them off? The answer lies in offering integrations that make your mailings targeted, trackable, and measurable.
Don’t Forget The Discounts
While the USPS is increasing postage rates, did you know that they also offer opportunities for discounted postage? To encourage marketers and printers to integrate mobile and online experiences into their mailing campaigns, the USPS offers a percentage postage discount to all qualifying mail through the Emerging & Advanced Technology Promotional Program. Mailings can receive upwards of a 4 percent discount in certain situations, thus cutting the postage increase by two-thirds in one fell swoop.
Upcoming changes to the program include timeline extensions and an increase in the discounts offered. For example, the Informed Delivery® promotion will be extended from 3 to 5 months and the discount will increase from 2 to 4 percent. It’s also projected that approximately 15 percent of the Emerging & Advanced Technology promotional mail volume will qualify for a 3 percent discount instead of the current 2 percent discount based on the technology that is used in conjunction with the mailing.
It’s Time To Get Targeted
We’ve already established that marketing budgets aren’t going to get bigger to accommodate an increase in postage, so in order to cut costs and stay within established budgets marketers are going to opt for smaller mailings. This will set the industry up for a major shift from saturation mailings to a more targeted approach to direct mail. In the past, it’s been tempting for marketers to go for the “spray and pray” method with mailings by buying a huge mailing list with the hopes of hitting the right people with their mailer. Now’s the time to have the conversation with your clients about the importance of curating a data-driven, quality mailing list comprised of qualified leads to set up a direct mail campaign for success.
It will also be important to communicate the value of having a branded presence in the mail. Valassis’ 2020 Consumer Study found that 71 percent of consumers and 72 percent of millennials read direct mail ads, with 60 percent of consumers and 58 percent of millennials having done so within the past 30 days. The allure of direct mail in part lies in the tactile experience it offers. Being a physical piece of marketing in your hands, direct mail has a tangibility that other forms of marketing lack, further reinforcing the fact that direct mail is an irreplaceable part of any robust marketing plan.
Make It Or Break It With Mail Tracking
We’ve all had that tough call where a client asks us “Has my mailer even been sent out? I haven’t received a single phone call!” How do you respond in this instance?
Moving forward, providing robust tracking reports and proving attribution will be critical to communicating your clients’ return on investment and showing the value add that direct mail campaigns have when it comes to a marketing program. Mail tracking is an excellent way to provide your clients with delivery data showing the exact pieces that were delivered and when they hit mailboxes, confirming that their mail was delivered to the right people at the right time.
Using Attribution As A Powerful Measurement Metric
Mail tracking is powerful on its own, but by coupling mail tracking with a metric that proves attribution is key for showing ROI when you’re having these conversations with your clients. Direct mail already has a reputation for being an expensive marketing tactic and this postage increase will make the exact same mailings almost 7 percent more expensive than they were before. Proving the inherent value clients can receive from direct mail will be critical in helping curtail additional sticker shock from future proposals. When asked the question “How did you hear about us?” the answer overwhelmingly is “the website.” The problem with this is that a website is a destination, not a source. Something drove that person to your client’s website, but how do you know what it was? By using a call tracking number on your direct mail pieces, you can effectively attribute specific calls to your direct mail campaign.
While a historic postage increase can seem like it will derail your direct mail business, there are ways to turn it into an opportunity for direct mail growth. Between opportunities for discounted postage and empowering yourself with the tools and data needed to track campaigns and prove attribution, you can turn that conversation into the perfect time to reiterate the versatility and efficacy of direct mail campaigns.
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