How to Offset Postage Increases for Direct Mail in 2021
Any day now, we’ll have the decision from the Postal Regulation Commission (PRC) regarding postage increases scheduled to take effect on January 24, 2021. In the meantime, the USPS has already announced their direct mail promotions for 2021 allowing direct marketers to finalize marketing plans for next year, ensuring these discounts are taken into account.
The new increases are below the range of the rate of inflation as measured by the consumer price index (CPI), so it’s fair to say the PRC will approve them. In USPS’s proposal, overall costs are expected to rise between 1.8 percent for First-Class Mail and 1.5 percent for other categories, per the USPS press release.
The proposed increases for each class are:
- First-Class Mail (metered) will increase from $.50 to $.51
- First-Class additional ounce will increase from $0.15 to $0.20
- USPS Marketing (Standard) Mail will increase by 1.509%
- Periodicals will increase by 1.456%
- Packaged Services will increase by 1.46%
- Special Services will increase by 1.458%
How does this affect our direct marketing clients? To break this down, our fundraising and membership clients primarily mail in the First-Class and Marketing Mail categories.
In the First-Class category, the “Forever” stamp cost will remain at $.55; however, the First-Class presort rate could increase by 2.163%. The First-Class metered mail rate will increase by $0.01, with additional ounces costing $0.20 instead of $0.15.
In the Marketing Mail category, overall prices are expected to increase by up to 2.373%.
What does that mean to the bottom line? For example, a 50,000-piece direct mail package mailing First-Class Meter could increase by $500. A direct mail package mailing in the Marketing Mail category that previously mailed 500,000 pieces could increase by $1,500 and the same for a non-profit could increase by $2,000!
If these are direct mail campaigns that mail monthly, you can see how these increases can cut into marketing budgets.
There are options that can be taken advantage of, with the USPS, to lessen the effect of these increases on your marketing budgets in 2021.
To help offset the costs of these increases, the USPS is offering the same promotions offered in 2019. These promotions could result in substantial savings for your direct mail programs should you choose to implement them. The easiest one to implement, and the most common one, is the Informed Delivery promotion. This program happens towards the end of the year, just in time for year-end and holiday mailings. Here are all the promotions being offered next year.
|Tactile, Sensory and Interactive Engagement||2% postage discount||Marketing Mail||2/1||7/31|
|Emerging and Advanced Technology||2% postage discount||First Class Mail and Marketing Mail||3/1||8/31|
|Earned Value Reply Mail||$0.02 postage credit||First Class Mail and Marketing Mail||4/1||6/30|
|Personalized Color Transpromo||2% postage discount||First Class Mail||7/1||12/31|
|Mobile Shopping||2% postage discount||Marketing Mail||8/1||12/31|
|Informed Delivery||2% postage discount||First Class Mail and Marketing Mail||9/1||11/30|
For more information, and to stay up to date on all things USPS, visit their News Page https://about.usps.com/newsroom/national-releases/2020/1009-usps-announces-new-prices-for-2021.htm.
Not big on any of the postal promotions? The following are other ways to offset these postal increases and cut costs overall:
- Take advantage of lower printing costs by preprinting components that are used in multiple direct mail campaigns.
- Utilize vertically integrated shops that have both print and lettershop capabilities.
- Think about running NCOA updates once per quarter as well as any other address hygiene tools to eliminate undeliverable mail.
- Consider looking at alternative formats that are less expensive to produce but still yield good results.
- Negotiate yearly volume-based printing, lettershop, and commingle rates.
- Look at all aspects of postage and how to mitigate the increase; combinations of drop ship, co-pal and commingle can help with postage overall.
- Don’t forget about other ways to enhance your direct mail. Utilizing other channels in combination with direct mail can create powerful results!!
These are just a few ways to help offset the postage increases expected to take effect in 2021 while still getting great direct mail results. If you’re looking for more ideas or advice on how to hit your budget goals in 2021, email us at .