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Analysis of the Proposed USPS Postage Increase for 2011

From a bird’s eye view, the 2011 increases don’t appear too severe and average well within the USPS’s price cap as legislated by the Postal Enhancement and Accountability Act of 2006. As a result, we see no apparent reason why these rates would not be approved by the PRC and are scheduled to go in to effect on April 17, 2011.

However, drilling down into the proposed rates revealed a few surprises – Good & Bad:

The Good:

Contrary to last year’s rumors that non-profits would be hit the hardest, they did surprisingly well with no increase whatsoever for automated mail. In fact, the highest  sortation level (Mixed AADC) actually decreased by a little over ½ of 1 percent.

Automated Flats, both First Class and Standard, also did surprisingly well with an average increase for both classes of mail of less than 2 tenths of 1 percent.

While the postage on presorted standard automated letter-size mail (the majority of all business advertising mail) did increase, the increase was relatively small at 1.6 to 1.7 percent as compared to some of the other mail categories.

The Bad:

Not surprisingly, non-automated, non-machinable prices for standard and non-profit letter-sized pieces received the highest increases at 15 to 20 percent.

By not increasing the price of a 44-cent first class letter as sent by a typical American consumer, the entire burden of this year’s postage increase will shift to the commercial business sector.

Flats – in order to meet the legislated annual price cap, many categories actually decreased in price to offset other increases in excess of the price limitation.  However, from a “volume” standpoint of an average mail job, those decreases occur at sort levels that would normally contain only a small percentage of the overall mail job volume (often called “residual mail”). The resulting impact may cause total final postage figures in excess of the legislated cap percentage while still allowing the USPS to be in compliance with the regulation.

Below is the line-by-line analysis of the most (but not all) of the commonly used postal rate categories. For more information, or for categories not listed here, you can go to www.USPS.com/prices and click on the link “New Prices For Mailing Services April 17, 2011”.  

Increased demand and higher volume for our digital 4-color variable-image, variable-data printing, mailing & fulfillment projects has lead us to increase our IT & computing capacity.

We have replaced our IT Network servers with top-of-the-line 64-bit, Quad Four lightening-fast processors to speed up data flow and large data file manipulation.

We have upgraded our XMPie (variable image and art engine software) desktop versions to the much faster and more efficient XMPie-Server version.

These additions now allow us to produce many more 4-color variable-image, variable data booklets, letters, postcards and brochures at a much faster rate than ever before!

We have now installed multiple in-line high-speed tabbers from Kirk-Rudy that makes it possible for us to inkjet addressee information and place multiple tabs on any side of a booklet mail piece all in one high-speed pass !

The new equipment acquisition not only puts us in compliance with the new US Postal Service regulations, but, gives us a distinct advantage over other mailers who must perform multiple ink jet and tabbing passes to accomplish the same result. This means we are able to process more jobs much quicker than our competitors!

Fulfillment Partners – Millennium Marketing Group doubles print capacity on its high-speed

ink jets. With 12 print heads distributed over 4 banks, we now have the ability to ink jet

variable information on an area of 6” x 13.5”in a single pass.

Consumers Like Cards !!!!!

We’ve noticed a significant increase in the number and quantity of mail pieces that we are generating that includes a plastic, credit-card-sized promotional card. There are several ways to produce this effect, ranging from personalized cards that have to be hand matched and glued to the inside pages of a brochure, to pre-mounted cards that can be lasered with the required information. These cards are called “DocuCards” and can be ordered in virtually any configuration with as little as 1 card on a form to as many as 6 cards to a form.

We also have a card “tip-on” unit that can affix generic cards to mail pieces at a high rate of speed.

The cards are extremely effective as it gives your mail piece a sense of “exclusivity” as well as giving the recipient something to remove from the mail piece and place in their purse or wallet.

Direct mail remains one of the most effective response-driven media channels available to marketers. It offers advantages few other mediums can match — in target ability, measurability and almost limitless creative possibilities. By being more environmentally focused and becoming environMAILists in producing and implementing direct mail campaigns, companies will continue to benefit from the power of mail while increasing its value and reducing its impact on the planet.

A new survey of 1,000 consumers revealed a large gap between the perceived eco-impact of direct mail and its actual influence. “They widely overestimated direct mail’s impact on the environment,” says Michael Critelli, executive chairman of Pitney Bowes, Inc which co-sponsored the 2007 DMNews/Pitney Bowes Survey of Consumer Attitudes. Critelli says he expected a disparity between perception and reality – “but not nearly as much as we saw.”

For instance, asked to estimate the amount of municipal waste created nationwide by advertising mail, 48 percent of respondents thought direct mail accounted for more than half of it. Thirty-six percent said it accounted for more than a third. In fact, direct mail generates just 2 percent of all U.S. municipal waste according to a DMNews article about the survey.  However, many opportunities exist to lessen it’s impact even more.

Taking advantage of the digital print-on-demand technology we offer instead of printing large quantities and warehousing them until they are needed is one way to lessen direct mail’s impact on the environment.

Have you ever had an application where you needed to insert multiple personalized, targeted documents into an envelope? These types of applications are normally used in a “fulfillment” environment.

Let’s suppose, for a moment, that your application entailed responding to requests

from potential tourists about what types of activities exist in and around the Orlando area.  

Inquiry number 1 needed to know about area golf courses and any golfing discounts that can be taken advantage of. Inquiry number 2 was interested in theme parks and Inquiry number 3 needed to know about area fishing charters.

Traditionally, these three inquiries would be fulfilled by pulling pre-printed brochures and coupons relative to their area of interest , inserting them into an envelope, addressing the envelope and mailing it back to the potential visitor. Along with the brochures and coupons, you would also want to insert some type of personalized letter thanking them for their inquiry along with a strong appeal to entice them to come and stay here in Orlando.

Ok, so, inquiry number 1 gets a personalized letter, 6 brochures (1 for each golf course in the area), some greens fees coupons from a couple of the courses, a couple of discount coupons for motels and resorts that are near the courses, and maybe a coupon for golf equipment from one of the equipment manufacturers all inserted into an envelope.

Inquiry number 2 gets a personalized letter, along with brochures and coupons relative to theme parks, while, inquiry number 3’s package would be relative to area fishing charters, professional fishing guides, discount coupons from bait and tackle shops, and so on.

Along with the tedious work of hand-inserting all the correct individual pre-printed brochures and coupons, one also has to keep up with the on-hand quantity of each brochure and coupon you have left in inventory so you know when to reorder the printed material.

The new “envelope” streamlines, simplifies, and automates the entire process by printing an on-demand facsimile of each of those brochures, personalized letters and coupons all in one pass and then binding them into a “booklet” that is then wafer-sealed and mailed immediately. No inventory to keep up with, no hand intervention, and no possibility of inserting the wrong information into the wrong envelope.

The inquiring tourist perceives a higher value by receiving a professional looking, fully personalized, and fully targeted booklet containing all the exact information requested.

It’s also less expensive, overall, to produce these “new envelopes”.  Since all the pieces are printed “on-demand” from blank paper, you have no money tied up in inventory. You don’t pay for for warehouse storage and also don’t waste money by throwing away and re-printing existing inventory due to current changes that render the original brochures or coupons obsolete (new theme park rides, changes in rates, etc).

These printed-on-demand, digital, variable image, variable data booklets are being used more and more each day for everything from insurance enrollment kits, 401-k investment fund reports, stock and investment portfolios, to travel itineraries and resort reservation confirmations. It’s the wave of the future, the “New Envelope” and, it’s available right now at Fulfillment Partners – Millennium Marketing Group! Call today for more information.

Four-color variable image mail is, hands-down, proving to be the single most successful innovation in mail advertising since the invention of the envelope. With success stories of mailers who have received response rates as high as 80% and return on investment rates in the one-thousand-percent range, advertisers everywhere are beginning to take a serious look at this new technique.

“How do I get started?” Actually, it’s easier than you think.

The ability to vary pictures, images and text based on what you know about the recipient all starts with taking a good look at the data file that you will use in your mailing.

For instance, is the recipient male or female? If “male,” you may want to design your images, text, and motif for a male or masculine point of view. Whether working with tools in the garage, cars and trucks, or maybe even a sport such as football, basketball or baseball. If “female,” you’ll want to tailor your images, text and motif to more of a feminine angle, possibly, with images of shopping, family, health and fitness, and so forth. 

If “gender” isn’t one of the stored columns in your database, there are several software packages that we can use to assign gender, based on the prospect’s first name. Keep in mind that you will need a “default” non-gender-specific motif for instances where the recipient’s first name could be either male or female such as “Francis” or “Jackie.”

Of course, the more information you have about a recipient, the easier and more effective your message will be. But, lack of information is not as detrimental as you might think. More often than not, the information is there; it just takes a little imagination to capitalize on it.

For instance, the city, state and zip can give you a lot of information, if you think about it. Does this person live in upscale Metro-West, downtown Orlando, or out in rural Eustis? If you are mailing in the middle of winter, does this person live near the beach in Florida or in Green Bay, Wisconsin? Is the address type an “SFDU” (single-family dwelling unit) or an apartment complex? All these little pieces of information can fit together to allow you to produce a variable image and text mail piece that is targeted specifically toward that person. Your message and offer becomes relevant and personal to the recipient, which results in much higher response rates.

Remember, designing successful variable image advertising campaigns starts with your data file. Try and put yourself in the shoes of your prospect and what they deal with on a day-to-day basis.                 

Just in case you’ve been living in a cave over the past year, “Going Green” is the new initiative and battle cry for 2008 and beyond. It’s in the news, It’s on radio and television commercials. Automobile manufacturers are building Hybrids. New fuel resources are seriously being investigated. It’s all the rage.  It’s what happening now! New environmental issues such as global warming and preserving our natural rain forests as well as rising fuel and transportation costs dictate that we all begin to be a little more responsible with what resources we have left.

In fact, I predict that over the next 5 years, you will see mandates from the large users of printed material that their print buyers must begin to use Digital Print On Demand rather than traditional offset print.

Digital print on demand allows you to print only what you need, when you need it.  Because it is printed in smaller quantities and “on-demand”, it is always current – never obsolete.  An InfoTrend study done in 2003 showed that, on average, 12.6% of all printed material, nationwide, sitting on pallets in warehouses becomes obsolete and must be thrown away before the first piece is ever used. A study by Xerox back in 2002 showed that, on average, businesses will spend $4 in usage, storage, obsolescence and shipping of printed material for every $1 actually spent in printing the material in the first place.

Does that make any sense to you?

So, save some trees. Be “eco-friendly”. Go “Green” and save money at the same time! Use Digital Print On Demand from Fulfillment Partners – Millennium Marketing Group.