Postal Rates on the Rise

Four Simple Steps to Offset Postal Hikes

Customer notices. Newsletters. Sales promotions. Statements.  Enrollment kits.  At their core, businesses rely on the proper and efficient management of information, much of which resides in the form of widely distributed printed documents.  The production of these high-volume documents is a task all in itself.  Unfortunately, the process doesn’t stop there.  Once a document has been produced it must be delivered, and the majority of printed documents are eventually mailed. 

Despite the increased use of the Internet, in 2002, the United States Postal Service delivered 203 billion pieces of mail.  According to analysts, mail volume continues to increase.  Indeed, the USPS adds approximately 1.7 million homes and businesses to its delivery network every year.

In January of 2006, the Postal Rate Commission announced a 5.4 percent postal rate increase.  The cost of a first-class stamp increased two cents, to $0.39, and the remainder of presorted and bulk mail rates increased, as well.  Even on the heels of this rate hike, yet another increase took effect just recently on May 14, bringing the cost of a first-class stamp to $0.41 and organizations scrambling for ways to cut costs. 

Some reputable organizations spend in the neighborhood of $250 to $300 million annually on postage.  Considering this level of expenditure, the recent 5.1 percent rate hike represents a multimillion dollar increase in postage expense.  As a result, many organizations are exploring ways to offset the additional expense by bolstering print/mail efficiency and enhancing the marketing value of their customer communications and other key documents. 

The following are four simple steps you can take to offset the postal hikes and prevent serious implications for your business. 

• Plan the Mailpiece – In addition to weight, the new postal rate structure will put a greater emphasis on size and shape.  Previously, letters, flats and parcels over 1-ounce had the same price at every weight increment.  The new rate design recognizes that each of these shapes has substantially different processing costs and should have separate prices.  With proper planning, you can implement creative design/kitting/folding/inserting services that allow for combining multiple mailings into a single mail piece.  Such practices could actually create an opportunity for savings, all based on your organization’s marketing objectives and budgetary considerations.

• Pay Attention to Shape – Strong financial incentive exists for combining multiple communications into a single envelope.  By adding inserts or cross-selling materials into regularly-distributed materials, you could increase mailpiece productivity.  In addition, under the new rates, switching from flat (9” x 12”) envelopes to standard #10 envelopes reflects the U.S. Postal Service’s lower costs for processing the smaller envelopes.

• Sort Out the Savings – Who would have thought that a simple presort could offset the effect the postal rate increase has on your organization’s operations?  Whether in-house presorting or partnering with a high-quality mailing presorter is your preferred method, the new first-class mail presort rate is nearly two cents less than today’s single piece rate – and even lower rates are available at the 3- or 5-digit presort levels.

• Keep a Clean List – Millions of Americans change their address each year.  As your database ages, your organization could be wasting valuable marketing dollars mailing to invalid addresses.  The Postal Service new address quality rules will raise the bar on providing discounts pertaining to address quality. This makes it more important than ever to incorporate address quality software or list cleansing processes in your operations to ensure mailing addresses are NCOA and CASS certified.

While the new postage rate system has come as a shock for many, don’t let this be the case for your organization.  The proposed changes represent the perfect opportunity to take a fresh look at the entire mailstream process, identifying opportunities to minimize the costs and maximize the effectiveness of customer communications.

For additional information on how you can transform your customer communications to beat postage costs, contact Standard Register today.  Our subject matter experts can provide you strategic direction and practical advice on everything from paper and printing, to postage and distribution.