Postal : Navigating the New USPS

4 keys to profitable direct mail in 2013

"We're in a deep financial crisis today because we have a business model that's tied to the past," Patrick Donahoe, USPS postmaster general, told The New York Times. "Our business model is fundamentally inflexible. It prevents the postal service from solving its problems."

"The fact is, there are many options to cut costs and expand revenue while preserving service," said U.S. Senator Susan Collins (R-Maine).

"The Postal Service needs a comprehensive solution, not more tinkering around the edges," said Senator Tom Carper (D-Del).

"Postal reform requires hard choices … the financial condition of USPS grows more precarious with each passing day," said Senator Scott Brown (R-Mass).

These statements tell the story. While reports and predictions continue to run rampant, what we do know is that throughout 2012 and 2013, the USPS will undertake the most widespread changes ever attempted in the history of the organization. Postage rate increases, new mail piece specifications and a significant reduction in the delivery network will result in significant cost savings for the USPS and big changes for marketers.

For direct mail to continue to be a profitable marketing channel, businesses and organizations must identify the most cost effective solutions for their marketing programs in light of this coming USPS transformation. Getting up to speed on these regulations and the impact on mail programs is critical to success.

1. New Postage Rates for Folded Self Mailers
While the actual rate increase percentage varies by product and service, the overall average rate increase across all classes of mail is capped at 2.1 percent. Several common mail formats are considered "folded self mailers" (FSM) and currently mail at standard automated letter rates. The 2013 FSM specification changes now categorize these campaigns into a higher postage rate tier. In addition to altering package size, such as moving from flats or oversized packages to letter-size packages, paper modifications also can offset the impact of postage rate changes on folded self mailers and unenveloped mail pieces.

Additionally, marketers mailing First-Class Presort now can mail a second ounce free for automation and presorted letters. A thorough understanding of all specification changes will allow marketers to modify and test formats that comply with the new regulations without losing any of the impact. Partners who offer comprehensive postage analyses can help marketers make an informed decision about the optimal designs of mail programs.

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