the image that represents the impact of USPS rate increases on direct mail advertising costs, along with strategies to manage these increases effectively.

Direct Mail Advertising Cost: Strategies to Navigate USPS Rate Increases

The U.S. Postal Service has delivered mail since 1863, so it’s natural that they’ve needed to do periodic price adjustments. What used to be fair upgrades, including raising their rates by one cent from 1995 to 1999, have now segued into changes twice a year. [1] Is it even still profitable to keep sending direct mail? It is, as you’ll soon find out! 

The impact of USPS rate increase on Direct Mail Advertising Cost

When it comes to advertising, you’ve known for a long time that direct mail is where the money is. After all, 59% of marketing survey respondents indicated that direct mail—when added into a multichannel approach—resulted in a positive ROI. [2] However, as the cost of direct mail advertising prepares for yet another postal price increase, how can you keep your costs in line? 

According to the USPS rates table, the average mail advertising cost will shoot up by 7.8% in July 2024. If you send out a smaller batch of direct mail (less than 500), you may utilize First Class rates, which are increasing by .05. [3] Either way, you’re going to feel the pinch in your budget. 

4 Smart Moves to Navigate USPS rate changes

Although there is nothing that can be done to convince USPS not to increase their rates, there are ways you can reduce your associated expenses. 

1. Take Advantage of Mail Designs to Increase Cost-Effectiveness 

Using current trends can offer you great benefits. For example, if you place a QR code on your direct mailers, you’ll be eligible for the Emerging and Advanced Technology promotion. You can also place the “Hey Alexa” prompt on your mailers to help minimize the blow of the USPS rate increase.

2. Use Data Modeling to Target People Most Likely to Respond

Utilizing postal optimization and logistics is one of your best overall choices. Let’s say that the latest USPS rate changes will make you send out fewer mailers. This doesn’t have to be a bad thing, as long as you incorporate data modeling into your approach. Essentially, you’ll be able to choose who should be dropped from your mailing list by letting data modeling indicate who is most likely to respond. In other words, you can reduce the total number of mailers you send out without sacrificing your response rate.   

3. Utilize USPS Promotions and Discounts 

Taking advantage of various USPS promotions and discounts can save you a lot of money! For instance, if you sent out more than 1 million pieces of mail last year, you may qualify for a 30% discount. We’ll go over these USPS incentives and promotions in greater detail later in this article. 

4. Ensure Clean Data to Increase Deliverability 

Are you relying on a mailing list that is more than a year old? It’s time to double check that your data is still correct. In fact, a visit to the National Change of Address (NCOA) website can help ensure postage savings by eliminating your outdated information. [4]    

Boost ROI to counter postage price increases

Even with the latest price increase, direct mail is still your best option to achieve a positive ROI. In fact, 67% of marketers claim it provides the best ROI out of their advertising options. [5] You can increase your ROI by up to 60% by sending direct mail to the same recipients. By taking similar multichannel steps, you should be able to boost your ROI enough to counter the new USPS rates. This is in addition to the helpful tips listed below. 

2024 USPS Incentives

We promised more info on incentives that would provide postage discounts, so let’s dig into this very helpful topic! As previously mentioned, you may be eligible to receive 30% off future mailings. There are three pieces of criteria you must meet to enroll in this program. 

  • You must send out at least 1 million pieces of mail in 2024 (calendar year) that are either Marketing Mail or First-Class Mail. 
  • You must send out more mail for the calendar year of 2024 than you did in the fiscal year for 2023. 
  • You must meet the registration requirements to join this program, including a baseline volume determined by USPS. 

If you qualify for this program, you’ll receive postage credits at three points throughout 2024. 

  • June 2024 (Q2)
  • September 2024 (Q3)
  • December 2024 (Q4) – Final adjustment for your year-to-date average postage paid 

2024 USPS Postage Promotions

Make sure you go to your USPS Business Customer Gateway account to register for USPS promotions. Failure to do so can cause a significant delay in getting approved. Next, look into each of the following programs. [6]

  • Personalized Color Transpromo – 3% to 4% discount on colorful statements.
  • Tactile, Sensory, and Interactive – 5% discount on Peel and Review, gloss stock, etc.
  • Emerging and Advanced Technology – 3% to 4% discount on QR codes, ‘Hey Alexa,’ etc. 
  • Informed Delivery – 4% discount with a digital mail piece. 
  • Reply Mail ImbA – 3% or 6% discount for Qualified Business Reply mail. 
  • Retargeting – 5% discount with Retargeted Technology Solution. 

Each individual promotion lasts between three and six months. Therefore, you should be able to utilize at least two promotions per year. 

Partner with an Experienced Direct Mail Marketing Company

The best way to take advantage of each tip listed above is by partnering with an experienced direct mail marketing company. At Century Direct, we’ve been providing cost-effective, high-quality campaigns since 1932. We use state-of-the-art equipment to produce your direct mail, and we utilize any savings you have coming to you such as nonprofit bulk mail rates. 

Between our omnichannel marketing, postal optimization and logistics, addressing and inserting services, and our digital printing, bindery, and data management, we’ve got the skills and experience to take your direct mail to the next level. Plus, we remain up to date on any USPS incentives and promotions to ensure you get the best possible rate! Trust our experience, and you’ll receive great results every single time. 

Are you ready to send out direct mail that’s been optimized to provide you with a better ROI? Turn to Century Direct today, and let us show you how much of a difference spending almost 100 years in business can make! 

SOURCES: 

1 https://about.usps.com/who/profile/history/domestic-letter-rates-since-1863.htm

2 https://www.businessnewsdaily.com/15776-direct-mail-marketing-guide-for-small-businesses.html

3 https://faq.usps.com/s/article/2024-Postage-Price-Change#july_2024_price_change

4 https://postalpro.usps.com/mailing-and-shipping-services/NCOALink

5 https://www.lob.com/ebooks/the-state-of-direct-mail

6 https://postalpro.usps.com/promotions/2024-cal

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This post was written by Eric Seid