6 Ways to Survive High Postage Costs

While the U.S. Postal Service has offered a reprieve to mailers by vowing not to increase rates in 2010, many mailers are still struggling with their expenses. Rates increased earlier this year, and these increases—combined with the struggling economy—are making it a very difficult year for direct mailers. They're scrambling for new and efficient ways to keep their direct mail costs down.

Here are some creative ways to assuage the increases.

1. Clean Up Those Lists
List hygiene is important when it comes to postal savings. Make sure your mailing list is clean and optimized for postal savings prior to any mailings you plan to drop. Also, use do-not-mail and suppression lists to drop off unwanted records.

A clean list is important to Boardroom, the Stamford, Conn.-based publisher of books and newsletters focusing on health and wealth. The firm uses a technology solution from a Creative Automation Co./CognitiveDATA strategic alliance that enhances its merge/purged file so it includes even more accurate addresses.

"It's worth it for us to pay a little extra [for this type of technology]," says Rita Shankewitz, director of marketing for Boardroom. "Since our mail costs are so high, if we can suppress the mail pieces that aren't getting to the correct names and addresses, it's worth it for us."

Also, make sure to update and standardize your addresses with the USPS' National Change of Address system. Starting Jan. 4, 2010, the USPS will require all Standard-class mailings be run through NCOA processing no more than 95 days prior to mail entry.

2. Test More Packages
Another strategy involves changing the type of direct mail packages you send. Certain types of mail—such as mail pieces sent at the flat rate—have seen higher-than-normal increases recently.

Boardroom, for example, regularly uses magalogs and tabloid-sized packages to promote its books and newsletters to prospects and customers. But, since these mailings are sent at the flat rate, and thus more expensive, the firm began testing bookalogs instead. Bookalogs are sent at the less-expensive letter rate; other types of packages that can be sent at the letter rate are # 10 envelopes or postcards. Boardroom recently tested bookalogs that have become controls for several of their book mailings. "In many cases, our bookalog tests have been very successful," reveals Shankewitz.

3. Choose Your Paper Stock Wisely
Boardroom also saves money by using less expensive, commodity-grade paper. This paper is available at any plant, and printers oftentimes maintain large inventories of it in a variety of weights and then pass along volume discounts from paper suppliers to the customers who make use of this paper.

"We try to print direct mail promotions on paper that's a little easier to get and get rid of," says Shankewitz. "With our mailing quantities down, we sometimes still get stuck with a lot of extra paper. "

4. Maximize Your Print Sheet
To get the most out of your printing dollar, also try designing your printed components to get the maximum number of pieces per printing impression.
This tip comes via a whitepaper called 10 Cost-Saving Direct Mail Production Tips, published by d.trio marketing group, a direct and multichannel marketing agency. A more efficient print run means less paper and less waste, as well as less total press time. Most printing facilities have several presses. Understanding the specifications of each press will help you achieve a more efficient press run and lower overall printing costs.

Ask for a complete list of equipment, and pay particularly close attention to each press's maximum/ minimum roll width (web presses) or sheet size (sheet fed). For web presses, make sure to note the printing cylinders cut-off or cylinder size measurement.

5. Mix Direct and Social
Combining direct mail and social media to create engagement with customers and prospects is another great strategy for meeting the demands of these tough times.

"It's not enough to just push out messages to customers anymore," says Jim Gilbert, president of Gilbert Direct Marketing, a Boca Raton, Fla.-based catalog and direct marketing agency. "For a modern company to succeed, it must cement its customers to its brands and products using every possible channel."

Gilbert offered the following examples of how to engage:
I. Give your customers a look behind the scenes in your company. Bring a human element to the "cold face" of business.
II. Add random contests to the mix. Do testimonial contests. Add pictures of your customer service reps and have your customers guess which one is which.
III. Add bios of your employees, especially the frontline people who speak to customers daily.
IV. Use Twitter to offer specials that last only a few hours.
V. Deal with customer service issues quickly. Ask how you can better serve.

6. Step Up the Personalization
Beyond these rules, mailers also must test and integrate technologies such as pURLs (personal URLs) and variable data printing to allow for greater personalization, Gilbert says.

According to the d.trio report, adding laser personalized variables makes your mailing more of a one-to-one correspondence-and saves you money on plates and multiple versions.

If your direct mail package uses variable offers, calls to action and/or body copy, for example, make changes to create versioning through the personalization process rather than generating multiple preprinted shells, the report advises.

Reducing printed versions by making use of variable personalization also helps you gain higher geographic saturation in your presort, resulting in deeper postal discounts.

Ultimately, putting these cost savings back into the mailing and going out to a larger targeted population will positively impact your return on investment.

"Due to the economy, there are less buyers buying," Gilbert says. "As a result, multichannel engagement via personalization can lift results and turn a marginal campaign into a profitable one."

[sidebar]

Direct Mail Not Dead!

Many people are claiming that direct mail is dead. Jim Gilbert, president of Gilbert Direct Marketing, a Boca Raton, Fla.-based catalog and direct marketing agency, believes the exact opposite. With less clutter in the mailbox, he says, now is a great time to mail and get your message seen. But, oftentimes direct mail is done wrong. To do direct mail right, Gilbert offers the following rules:

1. Have the right product with the right margins;
2. Know your mailing costs up front;
3. Do your math in terms of breakeven and lifetime value analysis, and know what you can afford to spend; and
4. Follow the 40/40/20 principle. Concentrate 40 percent on lists, 40 percent on offer and 20 percent on creative.