3 Strategies for Reducing Your Direct Mail Postage Costs

  • Jan 23, 2019
  • @ 09:28 AM

Efficiency Up_Cost DownIt’s that time of year, when the seemingly inevitable postal rate increases go into effect and marketers grimace as they assess the impact said increases will have on their budgets.

While the first inclination may be to cut – whether that’s programs or the number of recipients – this doesn’t need to be the case. Here are three simple, yet effective strategies that can reduce a campaign’s postage costs without sacrificing its integrity or effectiveness.  

Strategy 1: Actively Manage Your Mailing Database

Today the undeliverable-as-addressed (UAA) mail rate tends to hover around 5% of a mailing list but can easily go as high as 10% if not managed effectively.

Translating to upwards of hundreds of thousands in wasted dollars and lost opportunity, data hygiene is critical to direct mail’s success.

First and foremost – it’s essential to understand that data hygiene isn’t a one-time execution but an ongoing process. Here are three activities that should be a regular part of managing your contact data:  

1. Define Data Management Standards

The growth of consumer privacy laws and usage of multiple data sources makes having a data management process a must. If you haven’t already, create standards that not only regulates the collection, entry and modification of all address records currently in or entering your database, but manages consumer preferences as well.

2. Use Multiple Variables to Eliminate Duplicate Records

With multiple sources feeding information into your database, tiny changes are bound to occur. For instance, when filling out a form a person may list their company name by its abbreviation while a house list may use the company’s full name. Although merge/purge systems can easily remove duplicate records, identifying the tiny changes between two records is more difficult. This makes running de-duplication programs by more than variable vitally important.

      3. Monitor and Update Outdated Contacts

Each year nearly 40 million Americans change their residence. Using the USPS National Change of Address (NCOA) service to update any contacts who have submitted change of address requests will help to ensure your list stays current. Plus, for those submitting mailings for basic or full-service automation pricing, using the NCOA is required.

With the myriad of services and systems available, data hygiene can be complex. The good news though is that you need not go it alone. Using an end-to-end direct mail partner such as SG360° to help navigate the various data hygiene practices and USPS standards can prove invaluable.

Strategy 2: Reassess Your Format Size

The opportunity to impact postage costs starts the moment you begin developing your creative. 

Format size plays a big role in the postage rate as the USPS has created different rates for different size pieces. Designing your format to follow the USPS automation standards for marketing mail letter-size pieces can have a big impact on the price you pay to mail. Consider the following scenario:

You have a simple folded self-mailer that measures 7” x 10.5”. Exceeding the USPS letter-size dimensions of 6” x 10.5”, it will cost you upwards of $0.63 per piece to mail.

Reducing the length of the piece by just one inch to meet the 6” requirement brings your postage down to just $0.29 per piece. With a postage difference of $0.34, the savings quickly adds up. The chart below illustrates the cost savings for this piece across standard mailing quantities. 

Letter-Size Rate Comparison Chart

If you have a piece in progress or a winning piece you’re going to continue using, if the opportunity exists, consider reducing its size to meet the letter-size dimensions. These changes can often be made with little-to-no impact to the piece’s overall design and effectiveness.

For help designing to letter-size format dimensions check out the following resources:

Strategy 3: Leverage Commingling Opportunities

Beyond the traditional methods of reducing postage costs through data hygiene and format design is a perhaps lesser utilized avenue – commingling.

At a high level, commingling takes place post-production when the mail-ready pieces of multiple brands are combined and sorted by delivery destination to create mailing volumes large enough to achieve maximum discounts.

What’s more, because commingled mail requires less handling by the USPS, your mail not only moves through the system faster thus arriving in-home quicker, but with less wear and tear.

Commingling services can be found through third-party providers and end-to-end full-service direct mail partners such as SG360°. By using a full-service partner, you not only achieve maximum time and cost efficiencies but with one point of contact you maintain control and transparency of your program as well.

While commingling may not be available, or make sense, for each of your direct mail programs, leveraging it when and where you can is a simple way to earn additional postage reductions without impacting your delivery date.

In Closing...

There’s no denying it – with postage comprising more than half the cost of executing a direct mail program, leveraging optimization strategies such as those noted above are essential to reducing the impact postage increases have on your marketing budget and program ROI.

However, even as we set our sights on ways to reduce postage costs, it's worth the reminder of how powerful a tool direct mail continues to be. With response rates teetering on 3x greater than all digital channels combined, direct mail continues to attract and engage in ways digital cannot.

By offering a full circle platform that starts with data and ends with delivering finished mail to the USPS entry point, SG360° not only maximizes time and cost efficiencies but ensures our customers transparency and control.

Offering a full suite of postal solutions, we help customers optimize the cost and deliverability of their direct mail programs. To learn more or to receive an analysis of your unique mail files, contact us today.


Related Articles:

Understanding the New USPS Move Update Standards



Written by Jeana Garms

Vice President, Marketing at SG360°. A seasoned marketer experienced in designing and executing omnichannel marketing campaigns that combine the spectrum of marketing channels to drive desired actions and achieve results.