The Challenge of Working with New Postal Rates
It hasn't been sufficiently long enough to determine the major impacts of new rates (and rules) on mailing behavior, however, some early signs are indicating changes taking place.
Standard flat-size mail is being hit particularly hard with postage increases, with the exception of campaigns that are high-density and low-distribution. As a result, many mailers who regularly employ flats in their direct mail campaigns are being forced to make some tough decisions. There are a few options that combined can generally keep an organization within its marketing budget.
Convert Flats to Letters If You Can
What makes a mailpiece a flat is that it exceeds one or more of the maximum dimensions set for letter-size mail. Shrinking the length and height to be within letter-size parameters while remaining under one-quarter-inch thick offers more advantageous letter-size postage.
It isn't really all that simple though. To be a letter, the address should be presented in landscape modethe address block being parallel to the long dimension. (Enhanced Carrier Route-Non-Automation letters are excluded from this requirement.) Thus, using portrait orientation of the address to the mailpiece will preclude these letter-size automation discounts.
To qualify for letter-size automation discounts, a mailpiece needs to meet the established "aspect ratio" parameters (length divided by height equaling a number between 1.3 and 2.5, inclusively). Perhaps more importantly, the mailpiece must be sealed. If the mailpiece is not an envelope, and is rather a self-mailer booklet or "flexi," it will also need to be tabbed or spot glued to meet postal specifications. Until this recent rate case, the cost to tab or otherwise secure/seal a mailpiece has often exceeded the postage savings. The new rates give cause to reexamine this issue as the savings are generally now in excess of the costs associated with sealing the mailpiece.
Automation Concerns for Flats Migrating to Letters
The cost to address the mailpiece and to prepare for U.S. Postal Service (USPS) mailing equipment is often different between flat- and letter-size mail. Because letters are required to be placed in postal trays (versus flats prepared as bundles on pallets) the costs are usually a little higher. Many companies that mail flats also have a fair to greater portion of their mailings qualify for Enhanced Carrier Route (ECR) discounts, resulting in lower rates.
This is where a new twist in letter-size mail crops up from the new postal rates for the Enhanced Carrier Route-Automation category. Even though the USPS makes it quite clear that its automation equipment performs significantly better when mail is not bundled, and even though one might have thought "bundling of letters" was a dead practice, an old rule now raises its ugly head: 5-Digit Mixed Route trays require the use of "separator cards" between carrier routes, and 3-Digit Mixed Route trays require bundling of individual routes.
While the Mailers Technical Advisory Committee of the Postmaster General has initiated an effort to eliminate this rule, companies that mail letter-size pieces will be forced to incur the additional steps and costs for the time being. Many mail houses are "up-charging" that single segment of the mailing to cover these extra costs.
One other point: Letter automation requires that the barcode represent data that shows the delivery point, which means adding two more digits on the ZIP+4 barcode. Because flats only require a ZIP+4 barcode, there could be an issue if companies mailing flats sizes, now seeking letter rates, ignore this requirement. Normally, most lettershops or service bureaus will automatically handle this without any problem. An in-house mailing operation should review the requirements to assure compliance.
Costs aren't everything. A smaller format and orientation may not work with the marketing effort in producing the desired response. The larger image that a flat format provides sometimes is simply necessary for the requisite response rate.
Now, what else can one do to stay within the budget?
A Merger of Flats Mailings
For flats, taking an already efficient mailing program and trying to contain the damage done by severe postage hikes may require some innovative moves.
One alternative is to make that flat heavier. That's correct, make it heavier. Pound rates for mailpieces weighing more than 3.3 ounces rose marginally and offer some very real ground to save if you can reduce the number of mailings.
You need to determine whether you can consolidate two or more mailings into one. Suppose a company send its entire housefile a customer newsletter on a regular basis. Next, suppose a special discount on a single product/service is going to be promoted in a separate mailing to a targeted portion of the housefile.
If these campaigns are mailed at the same time, the two mailings could be "merged" by polywrapping them into one mailpiece. For the applicable addresses, a marginally higher postage rate is incurred along with the cost of polywrapping the pieces. However, the cost of an entire mailing is eliminated.
This merging may work better where there are separate offerings mailed at the same time and most of the targeted audience will receive the "heavier" mailpiece(s).
Polywrapping is not the only answer either. The two offerings may be bound together as one mailpiece, without the more expensive post-processing cost of polywrapping. Of course, you have to weigh your postal cost savings against the potential for reduced response rates to a combined campaign. Design issues also come into play, as you need to determine how to present most effectively the two offers in one effort.
Obviously, the opportunity to combine two or more mailings into one will not happen with every mail campaign. But with proper planning, it is a solution to employ that can be very effective in controlling mailing costs.
Don't Forget Mail Handling
An additional bonus to this approach should be better postal packaging and the ensuing postal delivery performance. The sheer physical presence of the mailpiece allows "containerization" at deeper levels of the USPS, such as 5-Digit pallets resulting in more direct transportation.
Polywrapping of mail does offer challenges other than cost, too. If your organization is concerned about the amount of non-biodegradable plastics contributing to landfills and questions the degree to which households separate and include polywrap in recyclables, you may want to weigh this in your decision-making.
Another problem with polywrap can occur in warmer climates, where polywrapped mailpieces in bundles on pallets can "caramelize" into bundle chunks of mailwhere the poly and mail have bonded together. Combining mailpieces in the bindery, or in paper wraps, may be the better option.
Regardless of switching to letter-size mail or remaining within the flats realm, targeting is always a prudent move. Targeting needs to be balanced with the need to gain new customers. Current customers "move" out of market or, worse, switch loyalties.
Reducing the volume of the mailings may not be the best solution to containing mailing costs. These new postage rates force us to change the way we mail. There are many opportunities facing the direct marketer and with some thought and planning, beneficial results will accrue.
Charley Howard is vice president, postal affairs and special projects at Harte-Hanks, and has been in the mailing industry with the company since July 1983. Howard develops the methodology behind Harte-Hanks' integrated Mailstreaming, Drop Shipping and Mail Tracking services, and he secured the company's first National Change Of Address license in 1986. He is active with all levels of the U.S.