As you know, most often the single largest cost to a direct mail piece is the postage. Often, the postage can dwarf the production costs. The most obvious way to save postage is to change the service level from first class to standard rates, but there are a number of ways to get the postage cost down another 20% and more, freeing up budget to increase the circulation or increase profitability of the campaign.
4 ways to cut your postage cost if you are already sending your mail presorted standard:
The postal system is a hub and spoke network of postal processing facilities, distribution points and local post offices. Mail dropped locally first goes to a regional NDC, then to a SCF, and then to a DDU. The deeper into the postal system and closer to the destination that you insert your mail, the less the post office charges because they don’t need to move it as far. These discounts can be up to $.03 per piece after the freight charge to get it there.
Presorted standard is not just one rate. It is a series of rates and it declines based on how much of your mail is going to a given area. The secret to co-mingling is to mix your mail with mail from other companies to create a higher density of mail in that area. This ensures that more of your mail qualifies for the lower rates within the standard rate classification. This strategy is also most often coupled with NDC and SCF drops to maximize savings. Co-mingling mail can save up to $.02 per piece.
Too often we see marketers employing the “spray and pray” direct marketing strategy. Mailing more pieces than necessary can work, it’s just way more expensive than it needs to be. The key to saving real money and increasing your ROI on direct mail is to mail only to targets that are most likely to respond. This of course saves the entire postage cost for that piece as well as the printing and data acquisition cost. Now we are talking! There is some complexity to the analytics of your house file and understanding the buying habits of your customers, but there is no better substitute for improving the profitability of the campaign. There are companies out there that can help you with the analysis and it is well worth the money.
Choose the right partner
SCF’s, co-mingling, analytics, it sounds complicated. It is. One of the biggest keys to success and profitability of your direct mail program is choosing the right partner. Some companies do strategy and analytics, some companies print and some companies mail. Ideally you find a company that can do all three disciplines. There is serious strength in doing the postal planning during the strategy and analytics phase that flows right into the seamless backend execution of the printing and mailing. Just because your vendor can do direct mail, does not mean they know how to employ these strategies or have the volume of mail to do so. You need to ask. Every mail project at Baesman starts with a custom drop plan to maximize postage savings while ensuring maximum deliverability. Clients that work with the Baesman Insights & Marketing team are ensured that we are mailing only to the people most likely to respond to the offer. We have the analytics to prove it.
If you want to improve the profitability of your direct mail, give us a call. We are here to help.