Insights / Direct

PUBLISHED: Aug 12, 2021 6 min read

The US Postal Service Just Increased Prices — Here’s How to Optimize for Direct Mail’s Immediate Future

While this is a big change, it should not drive overall decisions with regard to marketing strategies.

“As presently constituted, the Postal Service’s ability to serve its twin mandate to bind the nation together and remain financially self-sufficient is profoundly threatened,” United States Postal Service (USPS) Board of Governors Chairman Ron Bloom said during a February 2021 hearing in front of the U.S. House of Representatives. “For too long the Postal Service has been burdened with unsustainable liabilities and its own failure to adapt to the changing needs of its customers.” The USPS announced several cost-cutting measures in the wake of the hearing, including a decade-long strategic plan meant to modernize operations and increase postal rates. The proposed bulk mail[amsive_tooltip term=”bulk-mail”] and direct mail[amsive_tooltip term=”direct-mail”] changes had been in the works for some time now, but they’re finally here. The Postal Regulatory Commission approved the price hike to take effect on August 29, 2021. 

Postmaster General Louis DeJoy would say the changes were necessary to achieve financial stability and to avoid $160 billion in projected losses over the next decade. The plan, titled “Delivering for America,” hopes to create enough space for the USPS to turn a profit for the first time in 14 years and meet modern market realities head-on. But what does this mean for everyone else outside of the USPS; and, more importantly, what does this mean for direct mail marketing[amsive_tooltip term=”direct-mail-marketing”] purposes? 

New Changes, New Opportunities

The changes force a raise in overall “market-dominant” products and services — such as direct mail letters and postcards — by an average of approximately 6.9 percent. Even in a year where the COVID-19 pandemic upended forecasts, budgets, and strategies, the increase in price — to 58 cents for letters, 40 cents for postcards, and $1.16 for larger flat envelopes — could fundamentally change this still-viable marketing channel. 

The price hike is, in effect, the tangible marketing version of when tech giants like Google, Apple, or Facebook make changes to their policies or algorithms, which causes a regulatory ripple effect for entire industries. Marketers and businesses that rely on direct mail touchpoints[amsive_tooltip term=”touchpoint”] will have to shift and keep options open. While this is a big change, it should not drive overall decisions with regard to marketing strategies.

Here are some tactics that companies can use to face such aggressive changes and uncertainty to optimize their direct mail going forward. 

1. Be Proactive, Not Reactive

Let’s just get this out of the way: Ignore August 29. While the price increase is a change, the end-of-August deadline should not be some kind of point of no return. External factors are always going to happen and they will happen again, so any nimble-minded company should already be able to be proactive rather than reactive to such external events. 

Focus on what channels activate customers and leverage strategies like A/B testing[amsive_tooltip term=”a-/-b-testing”] in this pre-deadline framework to prove what works and what does not work. It also opens up the opportunity to ensure list accuracy to make sure money spent goes to the right customers with deliverable addresses. This saves time and could save money depending on campaign response.

While the price increase is a change, the end-of-August deadline should not be some kind of point of no return.

2. Optimize Direct Mail Investments

Just over 42 percent of direct mail recipients still either read or scan the mail they get, and 73 percent of American consumers actually prefer being contacted by brands via direct mail. The bottom line is that direct mail still works. Amsive’s long-standing relationship and experiences with the USPS mean we garner postal savings for you and get your communications seamlessly into the mail stream.

The looming changes are the perfect opportunity to determine how to reallocate and reinforce direct mail portions of campaigns beyond the August deadline. Move beyond activity to implement attribution and match-back capabilities, or control groups, to accurately attribute factors to marketing campaign touchpoints throughout a customer journey for better ROI visibility.

3. Utilize Data Tools

Companies should make sure to target the right customers by going back to see what the data tells them. By reviewing previous campaign analytics, companies can prioritize the customer segments that have most recently purchased to those that have more frequently purchased and more. Companies can also determine the creative layout and offers that could be projected to bring the most success within a shorter timeframe.

Additionally, companies could also look into alternative formats such as the USPS’ “Informed Delivery,” a new multichannel marketing option with an average open rate of around 70 percent that allows potential customers to see scanned images of their mail via an online dashboard or mobile app before it’s delivered to their mailbox. Businesses have the option of adding interactive campaigns and custom photos to the scans, making it a short-term extension of both direct mail and digital marketing touchpoints.

The looming changes are the perfect opportunity to determine how to reallocate and reinforce direct mail portions of campaigns.

4. Think Omnichannel

While partnering with a direct mail and print marketing provider that can help optimize costs within the framework of USPS requirements, it’s not out of the realm of possibility for the costs to continue to go up beyond with August change. But Amsive has a consistent track record of using direct mail as a performance marketing tool to acquire new customers and drive additional revenue from existing ones.

An omnichannel solution like Amsive uses multiple channels that ensure effective overall campaigns that could decrease costs. Consider adding integral digital channels like email and display to drive connected experiences. Testing and analyzing an ongoing omnichannel strategy that offsets the costs of a single channel should be enough to react in real-time to avoid significant and constant cost increases. Complete direct mail services connect with millions of consumers – including design, personalized messaging, printing, and mailing services — all backed by the power of our vertical market know-how and our data intelligence.