Commentary

USPS Rate-Hike Playbook: How Multichannel Brands Can Cope With Increases

by Ray Schultz , Columnist, May 16, 2024

Many marketers use both email and direct mail — the channels work well together. But each has problems that could hurt profitability.

Take direct mail. Brands that use the mails are at the mercy of Postmaster General Louis DeJoy and his Delivering for America initiative, a plan designed to achieve financial stability for the U.S. Postal Service.

“We’ve had 8 increases since January of 2018, with an average rise of around 1.03%, and 33.4% just since the inception of dual rate hikes in 2021 alone (for First Class Presort, Non-Profits, and Marketing Mail),” Mailing.com says in a study titled, “The Postage Rate Reset of 2024.

It continues: “DeJoy is stepping off his 1.03% average and is getting much more aggressive over the next two years with proposed 7.7% increases coming in July of 2024 and 2025 and 2.2% in January 2025 and 2026.”

These increases could make direct mail prohibitive, especially for smaller companies. What to do?

“With postal rates increasing again, it’s going to be critical for companies to look at not only optimization, but reinforcing the message through a truly omni-channel strategy that leverages customer insights that strengthens conversion,” says Ryan Phelan, CEO of RPE Origin. “If you can achieve a higher return through these diverse strategies, the increase in costs is less of a factor, but companies need to invest in the data and coordination.”

Maiing.com suggests that mail senders automate their processes.

At an advanced level, “automation operates across channels by sending direct mail based on event- or behavior-based triggers. Data flows from point-of-capture (e.g., website visits, abandoned carts) into your CRM for printing and entry into the USPS mailstream.”

The study adds: “When you align your production process with customer data and mailing options choices, you can operate more seamlessly across your entire direct mail cycle. In addition to reducing costs, you’ll get into the mailstream faster, and with less friction, and reach your target audiences sooner.”

What does that entail?

Mailing.com advises mailers to start by ”assessing and documenting your current workflows and focus on those that generate the most orders. Identify any gaps in your processes and look for opportunities to integrate and automate using your workforce and solutions (software and hardware) already in place. And if there are none, then document your specific needs or challenges and then find solutions that achieve your goals.”

In addition, you should run your data through a series of vital checks, using these procedures: