Firstlogic Insights

Another Postage Increase This Year

·Insights

Heads up… Did you know that new postage rates are slated to become effective on August 29th, 2021? This may surprise marketers and mailers who have grown accustomed to annual rate changes that normally occur in January of each year. The USPS® has been approved for a second rate hike this year under new guidelines that give the Postal Service more rate-setting authority connected to declining volumes and budget shortfalls.

An unexpected mid-year rate change that can raise some rates by ten percent or more can cause some genuine problems. Marketers and mailers set their postage budgets back in January, based on the published rates. The increased costs will require organizations to find the money elsewhere, which means making cuts — probably in mail volume.

Last January, Firstlogic® published an article advising marketers and mailers about some strategies for lessening the impact of a 2 percent postage rate increase. Now, with rates climbing even higher, that advice is even more relevant.

Instead of a knee-jerk reaction that causes organizations to cancel mailings or slash mailing list sizes, we recommend a more surgical approach. Mail is still a good investment, even at the higher costs. Don’t arbitrarily cut good prospects from your mailing list! Instead, make sure you accurately target every piece you put into the mail. Take the time to ensure your mail will reach the right people at the right time. Executing that strategy requires some work with the data before addresses ever get printed on envelopes, flats, or postcards.

 

Cost Containment

Here again is Firstlogic’s advice for minimizing the budgetary effect of a USPS postage rate increase:

Unless they are legally required to do so, organizations shouldn’t send mail they are reasonably certain won’t be delivered. It’s an unnecessary waste of money spent on postage, materials, and production costs. Companies can minimize the impact of undeliverable mail by using readily available tools like Firstlogic’s DQ10 Data Quality Suite, which includes modules like Firstlogic Match/Consolidate®, Address Correction and Encoding (ACE®) and Mover IQ®.

Mailers waste money needlessly in four ways:

  1. Sending mail that won’t be delivered
  2. Sending mail that will arrive late
  3. Sending duplicate mailpieces
  4. Sending mail to unqualified addressees

You can avoid all the above conditions by working on your data before you ever address a piece of mail. The methods you use to clean up your mailing list will vary depending on the information you are sending, the data points included in your files, and the rules that regulate your industry.

Let’s tackle the four conditions in the list using software most mailers already have, whether provided by Firstlogic or another vendor.

 

1. Mail That Won’t be Delivered

It’s easy to find addresses in your database or mailing list that will probably not reach the intended recipients. Addresses lacking critical elements such as street directionals or apartment numbers won’t receive a postal barcode from your address standardization software, like Firstlogic ACE, that compares your addresses to USPS databases. Other addresses in your files may include unknown street names or feature house numbers outside the range of known addresses on a named street. Those won’t receive a postal barcode either. You should consider removing addresses from the mailing list if you can’t validate them with the USPS databases.

Receiving a delivery point barcode doesn’t guarantee postal delivery in all cases, but not receiving a barcode is a good indication that a mailpiece could be undeliverable.

 

2. Mail That Arrives Late

The US Postal Service® will forward mail addressed to someone who has moved and filed a change of address notice with the USPS. First Class mail is forwarded at no charge to the mailer, but the postal service only forwards Marketing mail if the mailer agrees to pay an extra fee. We don’t recommend relying on forwarding to get your mail to the right place. Time-sensitive materials, such as insurance policy cancellation notices or utility disconnect letters, may not arrive at the new address in time for the recipients to take necessary action.

 

Keeping Up With Movers

By updating movers’ addresses before creating a mailing, mailers avoid the negative aspects of forwarding. Performing move update processes also gives you the opportunity to eliminate records from the mailing file if the new address falls outside your targeted area. You should drop an individual who moves from Ohio to California, for instance, on a campaign promoting an Ohio-only restaurant chain.

Mailers and marketers accomplish move updates with software that compares addresses in your file to the USPS National Change of Address database (NCOA). Firstlogic has recently released a new module, Mover IQ®, which outperforms most NCOA software in terms of speed and accuracy. Algorithms in Mover IQ match more addresses to the NCOA file than ever before.

Advanced methods can update even more addresses for individuals or businesses that don’t appear in the regular USPS databases. Firstlogic’s newest software, Enhance IQ® provides access to these advanced move update resources.

 

3. Sending Duplicate Mailpieces

The second or third mailpiece sent to the same person or the same household at the same address is a big waste of money. Consumers will not buy more products, donate a higher amount, or support your cause more vigorously just because they received identical mail pieces!

Mailers and marketers send duplicates because they find it too difficult to remove them from the file. Duplicate detection can be tricky, mostly because the duplicate data isn’t a 100% exact match. Data from multiple sources may be formatted differently and names can have variations. Firstlogic built their Match/Consolidate software specifically for name and address data and uses sophisticated matching algorithms to find unique data relationships using both deterministic and probabilistic matching techniques. The software understands common (and not so common) variations that can occur with this data. Match/Consolidate drops or combines data records so you don’t spend more than you should on a mail or marketing campaign.

 

4. Sending Mail to Unqualified Addressees

The fourth mistake many mailers and marketers make is sending mail that has almost no chance to convert to business. Avoid this condition by employing two exclusion tactics – Suppression Lists and Selection Criteria.

Suppression Lists are databases containing the names and addresses of groups of people you should remove from your mailing list. Common examples are lists of deceased persons and people who are in prison. Sending mail to these groups is a complete waste of resources. They will not come to your grand opening or take advantage of your coupon offer! Some suppression lists can be generated from inside the organization. For example, you should always suppress current customers from new customer acquisition offers.

Selection Criteria can be based on just about anything, depending on the mail piece you are sending. Is the direct mail campaign advertising rain gutter replacement services? Then you’ll want to filter out any people on your list who live in apartments. If you are promoting a brick and mortar retail establishment and you know people will not drive over 5 miles to reach you, then use geolocation coordinates to target those within a 5 mile radius and drop customers faced with a lengthy car trip.

Selection Criteria doesn’t always eliminate names from a mailing list. Mailers and marketers use this technique to divide their mailing lists into segments that receive different offers.  In the retail store example, you may offer customers living between 5 and 10 miles from the store higher value coupons than customers in nearby neighborhoods.

Enhance IQ® is a hybrid on-premise/in-cloud software solution that provides on-demand access to enhancement services like data suppression and appended demographic information marketers use to target mail campaigns more effectively. This unique hybrid solution combines the benefit of an on-premise user interface to build and manage jobs with an in-cloud maintenance-free back-end system… meaning you don’t need to worry about costly USPS certifications, software updates, or monthly address data updates. Contact Firstlogic for a demonstration of this new offering.

 

Summary

All marketers and mailers have to pay printing and postage costs, and any small increase makes a huge difference at high volumes. Offsetting printing costs and postage rate hikes by making mail more targeted and accurate are ways mailers can absorb postage rate increases while still enjoying the advantages this high touch communication channel provides.

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