This afternoon, the United States Postal Service announced it would not increase the price of its market dominant products including First-Class Mail, Standard Mail, periodicals and single-piece parcel in 2010.
This announcement demonstrates the commitment the USPS has to their direct mail partners. While they are concerned about their dwindling finances, they recognize “the value of mail and encouraging its continued use is essential for jobs, the economy and the future of both the Postal Service and the mailing industry.”
While I’m happy the Postal Service recognizes the importance of direct mail to their bottom line, you have to wonder what strategy they will use to stop their financial bleeding. If they aren’t going to increase prices, how will they decrease their deficit?
The full announcement is below:
October 15, 2009
DMM Advisory
Pricing — keeping you informed about the prices and mailing standards of the United States Postal Service
To Postal Service Customers:
Many of you have expressed concerns regarding mailing costs for 2010. The tough economic climate has presented significant challenges to all of us and pessimistic speculation has suggested that postal prices could increase by as much as 10 percent.
As we begin a new fiscal year and as many of you, our business clients, are preparing your 2010 operating budgets, we want to end all speculation.
The Postal Service will not increase prices for market dominant products in calendar year 2010.
Simply stated, there will not be a price increase for market dominant products including First-Class Mail, Standard Mail, periodicals, single-piece Parcel Post. There will be no exigent price increase for these products.
This is the right decision at the right time for the right reason. Promoting the value of mail and encouraging its continued use is essential for jobs, the economy, and the future of both the Postal Service and the mailing industry.
While increasing prices might have generated revenue for the Postal Service in the short term, the long term effect could drive additional mail out of the system. We want mailers to continue to invest in mail to grow their business, communicate with valued customers, and maintain a strong presence in the marketplace. Changes in pricing for our competitive products—Priority Mail, Express Mail, Parcel Select, and most international products—are under consideration. We expect to announce a decision in November.
We are committed to working with customers to find ways to grow the mail through innovative incentives like the Summer Sale and contract pricing. Mail is the most effective means of communication and advertising and we will continue to work together to increase the value of the mail. Mail is a smart investment for the future.
Photo Source: Casey Serin, Flickr
Ever wonder why your direct mail campaigns just don’t meet up to your expectations? If you are like many marketers, you are probably ready to throw in the towel when it comes to direct mail. You have a hard time justifying direct mail campaigns with so many cheaper options like e-mail marketing that produce a similar ROI for less.
Don’t discredit your direct mail campaigns yet! Direct mail is still a valuable resource in your marketing arsenal – it’s relatively cheap, easy to test and customizable. So what’s the problem? Well, most marketers are just plain doing it wrong. I see marketers make the same 5 mistakes over and over again:
1. Inefficient Market Research
All marketers should start off with a good understanding of their customers – who they are and their demographics. The biggest mistake I see in direct marketing is the tendency to mass market without any thought to market segmentation. You need to have an accurate picture of who your consumer is and how they prefer to be reached.
Don’t waste your time and money marketing to people that couldn’t care less about your product or service. Direct mail campaigns are only efficient if you target your customers.
2. Low Quality Lists
Even if you designate your target market correctly, without a quality list representative of your target market you can’t deliver effective results in your direct mail campaign. If you are spending your money buying a list or using valuable resources to create your list, you should verify the list represents an accurate sample of your target market.
The last thing you want is to be sending your direct mail to the wrong people. Otherwise, you’re just wasting time and money while decreasing the effectiveness of the campaign.
3. Problematic Copy
You’re using the correct list that’s a good representation of your target market – yet, you still have a low response rate. Check your copy. Are you using effective calls-to-action? Think of your copy as the conversation you have with your customers. You might be talking to the right people, but if your conversation is boring or unclear, you aren’t going to connect with your customers or convince them to do what you want.
Thankfully, direct marketing lends itself to testing. You can tweak and test different aspects of your copy to see what gives you the best results. For tips, check out Copyblogger’s Copywriting 101 for a great copywriting tutorial.
4. Distracting Design
Maybe it’s not the text, but the actual design of the piece. While you might have the right copy, if you don’t display it correctly you won’t influence your customers. An effective design strengthens the message of the copy. Don’t put more emphasis on your design than on your copy – it should never eclipse the copy.
Test different layouts, fonts and colors to find the ones that work best for your message. Don’t forget to take in consideration color theory, personalization and other design elements.
5. Lack of Innovation
Most marketers assume that all the different uses of direct mail have been discovered. Wrong! Direct mail continues to evolve and be affective in reaching customers even in a digital age if used correctly. Use your direct mail campaigns to differentiate yourself from your competitors. Instead of just focusing on an online campaign or just an offline campaign integrate the two for maximum reach and awareness. With the data you collect about your customers online, craft personalized direct mail pieces that your customers would be interested in. Be creative! Direct mail isn’t dead yet.
Don’t be one of those marketers – avoid the mistakes above. Don’t turn your direct mail campaign into junk mail.
The US Postal Service announced its plan to increase its mailing rates. Effective Monday, May 11, 2009, the price for a 1-ounce First-Class Mail stamp will increase from 42 cents to 44 cents. The rate for additional ounces will remain at 17 cents per ounce.
Prices for most shipping services like Express Mail and Priority Mail will still reflect the January rate increases. The prices for standard mail, periodicals, package services, extra services will increase. For a detailed list of the new prices, please check the USPS Complete Price List.
The USPS will continue to sell their Forever Stamps for 42 cents until May 11. Forever stamps remain valid regardless of rate hikes – no additional postage will be necessary after the rate change.
While the rate hike will help ease the current financial burden of the USPS, it is not the prescription they need to cure their economic woes. Raising rates will not get them out of the crisis they are in. The USPS needs to come up with new and possibly controversial ways to cut their major costs – and I’m not talking about another bail-out.
Trying to find some sort of financial relief, the US Post Office suggests cutting back on its mail delivery days going from a 6 day mail week to a 5 day mail week. After losing over $2.8 billion last year, the post office estimates it will lose up to $6 million or more this year. With rising costs in a recession and dwindling mail volume, Postmaster General John E. Potter doesn’t think a 6 day mail week is economically feasible.
Studies have shown that decreasing mail delivery days from six to five could save the post office between $1.9 billion to $3.5 billion per year. It doesn’t necessarily mean the end of Saturday mail delivery – other days like Tuesday are being considered.
Other options being considered:
- Relief from $5.8 billion obligation to pre-fund retirement health insurance
- Closing rural and small offices
- Reduce routes
Both the Miami Herald and Direct have great articles with more information.
What surprises me is why no one has talked about reducing the massive pension plans the USPS has for its employees. I know it won’t win any political favor – not to mention, the unions will go crazy. But, the USPS just simply can’t afford to be paying so much to previous workers and break even. What do you think the USPS should do?
The Direct Marketing Association just released its latest report,
Hispanic Direct Marketing: Techniques and Best Practices. The study provides the most current benchmarking practices for direct marketing methods with expert analysis and in-depth topic including segmentation, channel use, and Spanish-language promotions. I would recommend it to anyone looking to really penetrate the Hispanic market.
If you don’t want to spend the $240 for nonmembers or the $135 for members, Direct of the Chief Marketer network has a great article summarizing some of the more interesting finds.
One of the major keys to cracking the Hispanic market is to segment data based on the number of generations that have lived in the United States to increase the response rate. Ninety-two percent of marketers use non-catalog direct mail. Specifically, 77% of companies tailor non-catalog direct mail messages while almost half use both Spanish and English promotions. Also, 52% of companies use telemarketing services to reach their Hispanic markets.
- Beatriz Alemar
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