How will cutting Saturday mail affect direct mail operations?

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Jennifer McNally, VP-global marketing for Discus Dental in Culver City, Calif., runs a mind-boggling direct mail operation.

Her company, which sells tooth whitening systems and other dental technology to dental practices, has thousands of discrete direct mail campaigns, including 700 campaigns aimed at international audiences. Discus sends so many pieces of mail that the company has a full-time staff person assigned as liaison to the local postal distribution hub.

So McNally has a good reason to pay attention to the U.S. Postal Office's economic troubles. Currently, USPS is studying a shift to a five-day-delivery week and dropping Saturday delivery, beginning in the next fiscal year.

This drastic move is in response to the rapidly declining volume of mail moving through the system, which has sent a great tide of red ink washing over the Postal Service. According to the agency, total mail volume declined by 16.4% from 2007 to 2009.

So far, though, McNally isn't too worried about her direct mail operation—Saturday delivery isn't necessary to her success. Rather, it's the possibility of rate hikes that worries her.

“Saturday delivery won't affect the business,” she said. “But we hate rate hikes. Whenever there's a rate hike, we have to build it into our plan. We have very strict ROI measurement on our direct mail and, if it doesn't make money, we're not going to do it.”

No one knows yet how the loss of Saturday delivery or huge rate hikes would affect b-to-b direct marketing, but experts across the industry are watching the Postal Service carefully.

“There's a potential that Saturday delivery being eliminated will depress results,” said Doug Sauerhaft, president of DCS Marketing Solutions. “People will get a huge pile of mail on Monday, so advertising mail is more likely to go into the garbage.”

Smaller businesses especially, which often drop mail on Saturday or collect mail on Saturday, might be harder to reach. Larger businesses with mailrooms would likely be unaffected, Sauerhaft said.

At the same time, some direct mail experts see opportunity in the Postal Service's troubles. Greg Grdodian, exec VP-management and data solutions at Edith Roman Associates, said the volume of mail has been steadily declining for so long that a potentially heavy “Monday drop” won't be a factor. Instead, lower volume makes any single mailer stand out.

“More and more, we're seeing business mail getting opened because the volume is reduced,” Grdodian said. His company has been recommending more multichannel campaigns, with an e-mail announcing the impending delivery of a direct mail piece.

Whatever happens, there is wide agreement that USPS will have to do something to shore up its shaky revenues.

“With the deficits they're running, they're going to have to make a choice,” said Christian Templeton, account manager at Godfrey Advertising. “Either rates will go up dramatically or they'll cut back to five days and rates will just go up less.”

McNally agreed. “Nobody should be in the business at a loss, so I don't begrudge the postal service raising their rates,” she said. “Fortunately, there are alternatives.”

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