Why Your Postage Rates Could Go Down in April

Since postage is the most expensive part of direct mail marketing, any postal rates changes are big news. Usually, the USPS announces a pending rate increase. On Feb. 25 the USPS filed a notice with the Postal Regulatory Commission that would reduce postage rates.

direct mail postalSince postage is the most expensive part of direct mail marketing, any postal rates changes are big news. Usually, the USPS announces a pending rate increase. On Feb. 25 the USPS filed a notice with the Postal Regulatory Commission that would reduce postage rates. Within the filing, the USPS stated:

“… It intends to remove the exigent surcharge on Sunday, April 10, absent action by Congress or the courts to make the existing exigent surcharge for Market Dominant Products and Services part of the rate base or to otherwise extend it.”

In this filing, the USPS also noted that while it “… recognizes that daily revenue fluctuations could result in a one or two day variation on when the revenue limitation is reached, our current estimate is that the revenue limitation will be reached some time on Saturday, April 9, 2016.”

The end of the 4.3 percent increase surcharge has been anticipated for some time, though the rate of collection left the actual date hard to determine. The reason there was a 4.3 percent increase was because the post office was granted an exigency rate case that allowed it to try to recoup some of the funds lost during the great recession. The court ruled that the rates could not be permanent and must be rolled back after the allotted amount was reached. That means that on April 10 we will see an overall decrease in postage by 4.3 percent.

The post office has been hoping for either legislation or court action to allow the higher rates in order to help offset the losses the post office has suffered for the past several years. The Postal Service worries how it will replace the 4.3 percent of revenue that’s been essential to keeping it in the black for the past two years. These rates have been in place since January 26, 2014, so it will be good for marketing budgets to have more money for the rest of 2016.

So let’s take a look at what some of the most common new postage rates will be:

  • First class single piece letter = $0.47
  • First class single piece postcard = $0.34
  • First class single piece flat = $0.94
  • Presorted automation first class letter mixed rate = $0.419
  • Presorted automation first class postcard mixed rate = $0.272
  • Presorted automation first class flat mixed rate = $0.75
  • Presorted automation standard letter mixed rate = $0.291
  • Presorted automation standard flat mixed rate = $0.539
  • Presorted automation nonprofit letter mixed rate = $0.176
  • Presorted automation nonprofit flat mixed rate = $0.40

As you can see, these amounts will add up over time to marketer’s postage savings. This means you may be able to mail more pieces or add additional design elements that would not have been affordable under the current postage rates. There is still a chance that action could be taken by either the courts or Congress to change the rates, but as of now, it does appear that we will have a postage reduction starting on April 10. What will you do with your postage savings?

3 Common Direct Mail Questions and Answers

Direct mail can be a complicated and intimidating marketing channel if you are not familiar with it or have encountered problems in previous campaigns. Don’t let that stop you from using it.

MailboxDirect mail can be a complicated and intimidating marketing channel if you are not familiar with it or have encountered problems in previous campaigns. Don’t let that stop you from using it. Here are answers to three common direct mail questions and concerns that can help you not only avoid issues, but have confidence that your direct mail will provide you a good ROI.

1. What Do I Do if My Data Files Are Not Current?
There are a few ways that data files can be cleaned to give you a fresh list. The first is to update addresses for moves. This can be done before mailing with the USPS NCOA (National Change of Address) data file. Your list is run against the USPS file and any move addresses are appended to your file.

In some cases, people move and do not update the post office with their current address. In those cases the records are flagged and the addresses can be removed.

Many times an outdated file will have people on it that are no longer living. In order to correct that problem, your data file can be run against the national deceased file.

This will provide you with all the people that should be removed from your mailing.

2. How Do I Keep My Postage Costs Down?
The first thing to do is to make sure that the design of your mail piece is USPS compatible. If it is not, you will have to pay postage surcharges. If you need help with the USPS regulations, contact your mail service provider and they can guide you.

The next thing to do is to make sure that you are only mailing to addresses that have been CASS/DPV validated, so you are sending to good mailing addresses.

Finally, choose your mailing list wisely. Only send to people that are interested in your specific offer. You can save the rest of your list for the next campaign that is a better fit. Sending an offer to someone who is not interested is more than just a waste of postage and printing, it can aggravate the recipient and have them think twice before buying from you again.

3. How Long Will My Mail Take to Deliver?
Since the post office has made so many changes over the last two years we have seen drastic changes in delivery times.

The worst recorded times were last spring. At that time, the post office really stepped up to the plate, admitted a problem and took measures to fix delivery times.

On average, the delivery times we are seeing for letter size mail are: First Class Mail to the other side of the country in five to seven days, Standard Mail in seven to 15 days. This can vary depending on the amount of mail at each post office along the way.

The closer the recipient is to the origin post office, the faster they will get the mail. In many cases, in order to speed up delivery of standard mail we will drop ship the mail to a post office closer to recipients. The cost of the shipment is usually offset by the postal savings when submitting mail to a local SCF (Sectional Center Facility).

Direct mail is a great way to reach recipients — even millennials like to get mail. Using the information we have discussed you can create direct mail that is cost effective and will contribute towards your ROI.

The three key factors that you must plan for in direct mail are the list, creative and call to action. Taking the time to create a formal marketing plan that includes direct mail is vital to your response rate. Do not send out direct mail without a plan, a way to track it and how you will follow up. Do you have a great direct mail story? I would love to hear it!