Postage Increase Impact!

We drop a lot of mail on behalf of our clients. The recent postage rate change by the USPS impacts the Direct Mail Advertising industry more than most people realize. The USPS not only raised the overall postage, but widened the gap between letter rate and flat rate.

Additionally, the USPS changed some of the physical criteria making it more difficult to qualify for the lower postage discounts for volume mailings. Obviously the USPS is moving towards automated letter-sized mail pieces and encouraging volume discount mailers to do the same.

The challenge for direct mailers has always been getting noticed in the mail box. This has been accomplished in the past by oversized mail pieces (flats), thick or lumpy packages (NOT-FLAT Machinable mail). The new rates and physical requirements have amplified that challenge!

Babcock & Jenkins has met that challenge head on through postal webinars and meeting with the local USPS authorities on numerous occasions to gain better understanding of the new requirements and rates.

Rate Class Changes

While the retail First Class rate for 1-ounce LETTERS increased by approximately 5%, the retail First Class one ounce FLAT rate increased by 105% ( yes, that’s more than double).

In the First Class volume discount area, the 1-ounce LETTER rate increased by only 1/2%, while the First Class 1-ounce FLAT rate increased by 88%.

The Standard Class letter rate actually decreased by 9.5%, but the Standard Class FLAT rate increased by almost 42%.

Physical Requirement Changes

The most notable physical restrictions are:

• The allowable thickness of a mail piece to maintain the flat rate has been reduced from 1-¼ thick to ¾ thick before being subjected to the NEW higher NOT-FLAT Machinable rate for standard class mail or Parcel rates for first class mail.
• Uniform thickness of a mail piece has now been defined, and the USPS has created a new standard class mail category called NOT-FLAT Machinable mail. This new category covers standard class mail that has an uneven thickness of more than a ¼ variance (as well as with other criteria). This new category increases postage by 183% from the former standard flat rate which greatly affects what type of premiums are included in a mail piece.

A few methods we use to stand out in your mailbox, even with the new postal rates and restrictions are:

• Exhaustive searches for premiums that are relevant to the recipient and the marketing objectives and that can be mailed without moving up to the higher postage levels.
• Innovative mailing formats showcased in unique carriers that stand alone and capture the attention of the recipient without enclosing premiums (lumpy package).
• Designing mailing packages that intrigue the recipient to visit a Web site with the enticement of a significant incentive.
• Creating custom premiums that are mailable within the new postal constraints.

By understanding these postal changes we’ve been able to turn these rate and requirement changes into a competitive advantage for our clients.