Postal Optimization: A Growing Business Imperative
By Pat O’Brien, senior VP of
sales and marketing at Direct Group
As U.S. postal rates continue to rise each
year—including a projected increase of around 4%
this May—direct marketers are continually challenged
to offset these costs, which can represent up to 65%
of total direct mail project budgets. Yet many
marketers fail to focus their cost-reduction efforts
on postage, trying instead to reduce expenses
involving printing, materials and other campaign
elements. Only by focusing more on reducing postage
costs and optimizing campaigns will marketers be
able to proactively manage budgets for profitability
while still maintaining the integrity of their
direct mail programs.
It will be up to marketers and their industry
partners to find ways to lessen the hardships
created by escalating postal costs. No longer can
postage be considered a “pass-through” cost over
which marketers have little or no control. This
would lead to dwindling budgets for program
execution and less effectiveness overall for direct
mail. It also could potentially move customers to
look more closely at other marketing platforms that
could be viewed as economically advantageous due to
the rising costs of print mail.
In addition to examining creative ways to reduce the
cost of postage itself, the overall optimization of
a campaign has become paramount. Diminished consumer
response rates, postal waste due to the large amount
of undeliverable-as-addressed mail, and
inefficiencies in the National Change of Address
system pose their own unique challenges, as does the
movement toward environmentally friendly business
practices to reduce paper usage.
Smart marketers already have begun meeting these
challenges by aggressively integrating postal
optimization, logistics strategies and campaign
optimization techniques that not only promise to
curb postal costs but also to improve address
accuracy and enhance response rates, contributing
significantly to the ultimate success of a campaign.
It is possible to significantly reduce postage costs
while still guaranteeing highly accurate and fast
delivery of mail. The key is to take advantage of
new, cost-saving production and mailing techniques
available today, including:
• Aggressive
presorting
programs that maximize postal discounts
• Co-mingling opportunities;
• Data hygiene, or campaign optimization,
programs that help reduce waste caused by
undeliverable mail or incomplete addresses; and
• Other logistics strategies such optimal
packaging, targeted in-home delivery dates, load
planning, reporting, co-palletization and
standardized interfaces that determine the most
efficient trucking and transport options.
Despite the tools and technology available, many
marketers have yet to fully integrate a
comprehensive postal optimization plan. Marketers
need to ask themselves, “Is my service provider
truly moving my mail as effectively and
cost-efficiently as possible, given the realities of
the economy today?”
It is important for any provider to demonstrate its
qualifications and experience as a
total solutions
provider, delivering streamlined, optimized mailing
strategies, as well as trigger mailing tools and the
latest in digital printing techniques. In addition,
providers must have the resources and industry
experience to provide clients with the benefits of
the latest data hygiene and intelligent mail
technologies, including automated and/or
Web-based
processing and interface systems that help the USPS
process mail more efficiently, resulting in cost
savings.
Furthermore, marketers should be assured that their
provider of choice can offer significant mailing
facility volume, co-palletization certification and
their own logistics capabilities. Providers that
contract with third-party facilities for co-mingling
may not be able to deliver maximum efficiencies.
Comprehensive postal and campaign optimization plans
not only offer the best defense against escalating
postage costs but also provide ways to increase
speed to market, improve response rates and enhance
the overall effectiveness and return on investment
for mailing campaigns. Those marketers that insist
on such proactive approaches will be most likely to
succeed in today’s competitive marketplace.
---Source: Reprinted from BtoB
Marketing Magazine at www.btobonline.com. Pat
O’Brien is senior VP of sales and marketing at
Direct Group and can be reached at
www.directgroup.net.
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