Production and Paper Special Report: Get Smart About Print

Combat production challenges with technologies that stretch your direct mail dollars

June 2006 By Hallie Mummert

multipage

Today, the word technology most often is used to refer to online innovations. In the search engine marketing sector, in particular, new solutions are rolled out almost monthly—if not weekly.

By comparison, “most of what’s happening in direct mail printing is evolutionary not revolutionary,” says Barry Bogle, vice president, imaged products at Quebecor World, a commercial print media services firm based in Montreal, Canada.

All the same, he notes, this incremental progress is significant in helping direct mail remain a cost-efficient activity for direct marketers. While few in the industry would dispute direct mail’s advantage as a strong one-to-one communication method, the rising costs associated with this channel threaten to reduce its benefit to direct marketers seeking greater ROI for their prospecting and retention efforts.

Let’s take a look at the obstacles marketers face in producing their direct mail campaigns, as well as those evolving technologies that promise to help make the most of marketers’ direct mail budgets.

Key Production Challenges
The most obvious challenges facing companies that use direct mail are increasing paper prices and postal rates. Dick Goldsmith, chairman of The Horah Group, a full-service direct marketing agency in New York, reports that a number of paper mills are shutting down their lines. “There’s tightness on uncoated text [stocks],” he states.

In addition, the USPS filed a proposed rate case last month that would mean an average rate increase of 8 percent to 9 percent for all mail classes. Companies that mail catalogs, magalogs and other types of flats are going to get hammered with increases in the double digits, says Goldsmith. The reason behind this bigger jump for flats is that, while the postal service is installing new flats-sorting machinery, it still finds the amount of work required to process flats is far greater than that needed for letter mail; these costs are being passed on to the marketer, he explains.

Presently, the USPS does not anticipate implementing this rate case any earlier than May 2007. Bogle advises marketers to pay attention to the case and any reclassification requests, as these mail processing rule changes can turn into surcharges that take marketers’ postage rates even higher.

Beyond paper and postage, marketers also are finding it more difficult to battle mailbox clutter on tight budgets. “As response rates decline, there’s a tendency to develop ‘over-the-top’ packages that test well but can’t be produced efficiently at roll-out quantities,” says Debora Haskel, vice president of marketing for IWCO Direct, an integrated direct mail solutions firm in Chanhassan, Minn.

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