After a decrease of 5.2 billion pieces of mail for its first quarter of FY2009, its eighth consecutive quarter with decline in volume, and the anticipation of an equally devastating second quarter, the U.S. Postal Service recently announced its desire to offer mailers a carrot instead of a stick to get volume going. If the proposed program gets enacted, the top 4,000 U.S. mailers will be eligible for a 20 percent to 30 percent discount on their postage bills for mail volume between June 15 and Sept. 15 that exceeds the baselines established by the Postal Service. These baselines will be determined using each mailer's volume from the June 15 to Sept. 15 period last year, and then adjusting "downward by the current mail trends for that mailer during the first two quarters of Fiscal Year 2009," according to the Direct Marketing Association (DMA).
Two years after headline-making postal reform, here we go again. The U.S. Postal Service witnessed a headline-making drop of 9.5 billion mail pieces in fiscal year 2008, which contributed to a net loss of $2.8 billion. But having to pay $5.6 billion to prefund its retiree health benefit fund was the major hit that made the USPS management’s aggressive cuts of $2 billion from annual operating costs practically disappear into thin air. And with no relief in sight, Postmaster General John Potter has stated the organization is on track to post a revenue shortfall of $5 billion in fiscal year 2009.
One of the biggest developments in parcel shipping over the past decade is the increased use of consolidators. Consolidators compete against standard UPS and FedEx ground services by using a special rate from USPS called Parcel Select. The consolidators sort and drive the parcels to USPS Bulk Mail Centers (BMCs), Sectional Centers (SCFs) and local post offices. Delivery times normally increase by a few days over UPS ground, but Parcel Select rates are very low, so even with the consolidator's fees added on, the costs can be 30 percent less than standard UPS, USPS Priority Mail and FedEx rates.
More than 10 years ago, commingling was introduced to marketers as a way to reduce postage costs and get mail in-home faster. The monetary benefits of commingling are numerous—highest possible automation discounts, deepest penetration into the postal system, lowest postage expense—yet concerns about how it works cause some to turn away from savings opportunities.
In late January, U.S. Postmaster General John Potter played a game of Mother, May I with Congress, asking for the ability to reduce the delivery week from six days to five. “The resounding answer from Congress was, ‘No, you may not have the authority to do this,’” says Bob McLean, executive director of the Mailers Council, in Arlington, Va. And, he emphasizes, Congress has a long track record of supporting six-day delivery.
Self-mailers are popular across multiple sectors for their affordability and visibility. In fact, more than a third of all mail received annually by the Who's Mailing What! Archive, Target Marketing Group's library of direct mail and e-mail campaigns, fits into the self-mailer category, including catalogs, booklets or slim-jim mailings, folded self-mailers, and postcard formats.
There are only about two dozen Bulk Mail Centers in the United States, and to qualify for the lowest rates, commercial mail—including parcel post, media mail, Standard mail and periodicals in bulk form—must travel through one of these centers before delivery.
The new postal regulations have made it hard for mailers to keep doing exactly what they had been doing with their envelopes, as in format choice, ordering and even design. Here, from a recent white paper from the direct mail envelope company ColorTree, based in Richmond, Va., are three tips to tackling those challenges.
Our Who’s Mailing What! Archive, the world’s greatest library of direct mail, lists 31 merchandise categories. A careful examination of this sector reveals some real trends in 2008, many of which were caused by economic downturn and postage increases. For the purpose of this article, I compared the first six months of this year to the entire calendar year for 2007, 2006 and 2005. First, with so many categories, you’d rightly guess that this sector continues to dominate the mailstream despite economic woes. This is true, to an extent. In the first six months of 2008, merchandise mail made up a solid 4.5
As a direct marketer, you now that the list, creative, product, offer and mailer all play significant roles in motivating your customers to buy from you. The list-your file of customers-is often cited as the single most important factor in your marketing. We suggest that the delivery process is the second most important factor because the most beautiful package featuring a compelling offer of a marvelous product is wasted if it does not get into the hands of a potential buyer.