Despite rate increase, opportunities abound to deliver efficient, cost-effective direct mail campaigns

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Today, May 11, 2009, the U.S. Postal Service’s new (and higher) rates go into effect. This is significant because, for direct-mail marketers, postage expenses can represent up to 65% of total project costs and annual rate increases continue to add to these costs.

Despite the postal increases going into effect today, there is some relief on the horizon. The USPS recently announced special discounts for this summer for direct mailers that increase their standard mail volume.

In addition, marketers can further reduce their mailing costs by using the latest in “intelligent mail” technologies. Benefits include full-service discounts, which will be available Nov. 29, to marketers that use USPS-certified producers of full-services mailings.

In addition, full-service mailings are eligible for such benefits from the USPS as its Address Correction Service and tracking of mail pieces throughout the mail stream. This, in turn, aids date targeting and response management. There are many other cost-saving techniques, which I’ll address below.

Direct marketers face multiple challenges, and rate increases is just one of them. With the economic downturn significantly impacting marketing budgets of companies both large and small, we have seen a dramatic decrease in mail volumes. As recently reported by Time magazine, “9.5 billion fewer letters and packages [were] delivered in the 2008 fiscal year compared with 2007, [representing] the biggest mail volume decline in the U.S. Postal Service’s history.”

But direct mail still is an extremely viable medium, commanding more than $50 billion in U.S. marketer spending. And in response to the challenging economy, direct marketers are taking a closer look at how to most cost-effectively target customers and prospects.

They are finding that the precision timing and targeting of campaigns are increasingly critical. In addition, the leveraging of multiple distribution strategies also has become vital to campaign cost management. This is made possible by the planning and design of a postal strategy that is usually a hybrid of several processes.

It is widely known, for example, that customers and prospects tend to respond more favorably to personalized messages than mass, impersonal mailings—especially when combined with full color and informed by dynamic customer history. The latest data, digital printing and precise measurement tools work together to execute at a high level of sophistication, and deliver targeted, timely campaigns that boost ROI.

In addition, to achieve greater cost savings on mailings marketing services, providers are employing a variety of distribution strategies (such as the combination of co-mingling, co-palletization and direct trucking) to ensure that mail reaches its recipient in the most cost-efficient way possible.

Technology also exists that enhances in-home targeting by combining mail for maximum density and allowing for staging and delivering mail in a coordinated sequence. This, in turn, paves the way for consolidated campaign-response management.

At the same time, sophisticated address-hygiene tools are focused on ensuring that mailing information is updated with the most recent and automated mailing addresses.

Putting these options into play now also leverages one of the upsides of declining volumes: less competition in the mailbox. Marketers would do well to recognize these opportunities to reach their target audiences in an increasingly clutter-free environment now.

It is time to shift gears and look toward the future of direct marketing. Despite today’s postage rate increases, opportunities abound for companies to reach customers using high-impact, low-cost messages in a less-competitive environment.

June Busch is exec VP-client development at Direct Group (, a direct marketing solutions provider. She can be reached at [email protected]

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