As you most likely have read by now, late Tuesday the Postal Regulatory Commission (PRC) allowed the full request from the USPS for a 4.3 percent exigent rate increase on Standard Mail which goes into effect one month from today. First class postage increases 3 cents to 49 cents.
The Commission found that the Postal Service showed a causal link between mail volume losses and the exceptional circumstances of the Great Recession. They estimated that 25.3 billion pieces were lost as a result between 2008 and 2011. This rate increase will essentially allow the Postal Service to be reimbursed for the volume fall-off determined by the Commission to be equal to $2.8 billion in profit. The new rates enable the Postal Service to recover this loss in less than two years. The PRC did instruct to the Postal Service to develop a plan to phase out the rates once the appropriate contribution is met.
This news has been universally received with dismay among mailers and marketers. But instead of focusing on this decision and how ill-advised it is, it will be more productive in the coming weeks to talk about the enhanced role effective postal strategy will play in direct marketing programs.
In this new rate environment, effective postal strategies will become more important than ever. IWCO Direct leads the industry in strategies that not only help reduce postage costs but also increase response rates and improve ROI. While we pioneered integrated commingling more than 15 years ago to capture the lowest possible postage cost, we did not stop there. We continue to innovate our approach to bring a new level of sophistication to planning, execution and analysis. This includes our digital platform which lowers postage cost through single-stream optimization.
We also keep a close eye on new opportunities for our customers. As I wrote earlier this month, there are several mailing promotions and incentive programs available from the USPS for 2014. These include the branded color mobile technology promotion, an incentive program for saturation and high-density mail, the earned value reply mail promotion and the premium advertising promotion.
If you would like to discuss opportunities to enhance your current postal strategy, be sure to contact your IWCO Direct account team. If you’re not a current customer, but would like to explore postal saving opportunities to help mitigate the upcoming increase, contact our sales team.
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