Putting your .02 Cents In!

It's Valentines Day, and with the massive dose of red envelopes in your mailbox comes the annual announcement from the United States Postal Service on the annual rate of increase for postage. Beginning May 11th, we will all being paying an additional .02 cents for a First Class stamp and a penny more for direct mail post cards. Seems incremental at best given the economy...if you are a consumer sending valentines or birthday invitations. But, if you are a business owner who relies on direct response ROI to drive your margin, it's not such a little increase.

In the past 10 years, there has been a 31% increase in the price of a first class stamp affecting the way everyone does business. Of course there is a lot written about how it rises as a reflection of inflation and the price of transportation, gas, you know the dribble. Most of it is true, however, even with the regular increases the service hasn't improved and in fact in spite of the increases, the postal service still threatens to decrease service hours and streamline locations. For business owners, every move the postal service makes affects bottom line. Whether it be delivery times and service for products being shipped, business communication by post (greatly reduced by the efficiency of the now nearly dead fax machine and new fave- EMAIL), or distribution channel management there are more costs to doing anything that involves getting something somewhere in a particular period of time to drive response.

Direct Response driven marketing tactics are turnkey methods of seeing a rise in response if your call to action is right on to your profiled customer! There are still many tricks to getting the post card or newsletter or magalog/magazine into it's desired location and navigate the United States Postal Service to get the best deal. Peter Lineal, President of our sister company, Plum Grove Printers is one of those magicians who is a wizard at navigating the postal service and all of its incremental increases for his customers. He evaluates the message and consults to design the direct mail piece (whatever it might be) to the size and shape that is the most efficient for mailing. Ok, it's .02 cents first class, bringing that stamp up to .44 a letter. But what if, like a number of businesses, you are mailing out 1000 pieces of mail weekly. And as it relates to the direct mail postcard, a penny higher at .28 a piece, if you are mailing out 10,000 pieces at a time, 3-4X a month with multiple calls to action, it has to be accounted for in your ROI. So what do you do? Increase the price of your product to make up for the increase in the cost to market it?

The slippery slope of increases everywhere we turn has to be navigated carefully. There will surely be increases in nearly everything a business owner has in overhead relating to the cost of transportion, or the cost of utilities, or the cost of healthcare. The cost of postage, as incremental as it seems, can be the cherry on the sundae...or worse, the straw that breaks the camels back. There are many strategic methods for navigating the small stuff....never be afraid to ask your direct mailer, printer, or agency for support in this area. It should be integral to the service they offer you - effectiveness and efficiency! Staying ahead of the next .02 increase is the way to stay above break even in a business of any size in any economy.

Read more info on the postage increase and how it will affect the Direct Mail Industry, When you click HERE (DM News 2/16/09 issue)


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