As I wrote to you in my first installment, there are 7 ‘take it to the bank’ rules to remember which will help you find that next control package.

In that first missive, I concentrated on your target audience – and the paramount importance of understanding who they are, what they want, and how you might connect with them in a memorable way:

Rule #1: Always Remember … It’s Not About You.

Rule #2: It’s all about ‘them’ … and meeting their needs.

Today, we get to talk about someone who’s probably a little more near and dear to your heart – you.  And the 5 Rules you can start implementing now to ensure your blockbuster success in 2012.  You ready?  Let’s do it….

Rule #3:  Fix your current winner.  Then fix it again.

Want to know where you’re most likely to find your next great acquisition winner? The first place to look is your current control.

After you’re done reading this article, try something you probably haven’t done in a while.  Grab three people from your office (preferably people who look and act like your target prospect), usher them into a room … and then ask them to open your control. Then watch.  Do they even read your envelope teaser?  Do they look at the reply slip first before anything else?  How do they react to the letter?  Do they read the first few words and put it down? Do the older people in your audience excuse themselves so they can find their glasses (a sure sign your stuff is too hard to read).  How does your audience  react?  A sigh … a smile … a yawn?

Once you’re done collecting this information, then take another look at your control, and ask yourself – is this package clear?  Does the opening line grab them enough, or am I hoping the recipient will read the whole letter to get my point (oh-oh).  Is my photo grabbing the recipient, or just taking up space … and what could I replace it with.  Does my reply slip headline scream ‘return me now!’   In other words, could I dramatically improve what I have so far by making it bigger … shorter … more visual … less crowded.  Chances are your next control is already sitting right in your hands.

Rule #4:  Stop the Insanity … do something truly different.

You know the definition of insanity, right?  Doing the same thing again, and again, but expecting a different result.   More often than not, charities whose control is a window envelope/4-page letter package choose to test the exact same format again and again, hoping for a breakthrough.

Recently I worked with a great overseas relief agency whose control package (a #10 window envelope with a 4-page letter inside) had run out of steam.  They asked me to ‘write a letter to beat it,’ but I instead gave them a totally different approach – a personalized greeting card with a short message inside, supplemented by 4 Polaroid photos that told the mission’s story on the back of each one.  This new approach covered the same ground as the 4-page letter, but broke up ‘the story’ into easy-to-digest, bite size pieces – and was a clear winner.  An aberration?  Hardly.

Last fall, the good folks at the Pine Street Inn (a homeless shelter) in Boston asked me if I could ‘write a letter’ to beat their 10-year control (which featured a long letter).  My suggestion – a personalized greeting card that told the Pine Street Inn story in easy to read, bite size pieces.  The results skyrocketed almost 50%.

The moral?  After you’re done following through on Rule #3, and tweaking/improving/messaging your control to death, make it a point to ‘test big.’ Turn your program on its head.  Think differently.  If you’re always testing long letters, test a slip with a strong headline and a compelling photo instead.  Or an index card with multiple photos alongside.  Or a one-page letter, with a long personalized handwritten message that spills over to the other side.

Rule #5:  You’ve got 3 seconds before you die (direct mail-wise, at least).  Make every second count.

Here’s the hard truth in a nutshell: even though you will probably spend 10, 20, 30, or even 100 plus hours developing your next acquisition package, the typical prospect is going to give you 3 seconds to decide if she likes it … maybe.  Unless your package does something to provoke/incite/inspire/attract your prospect, all your hard work is going to end up in the wastebasket faster than you can say ‘I-can’t-believe-she-just-threw-my-package-away.’

What to do?  Begin each new package assignment with the assumption you’ve got three seconds to make your case, and make it as strongly as you can.  That means, if you have a fantastic offer – scream it on the outside envelope. If you have important news that will really provoke your prospect’s emotion?  Show it on the outer envelope, or the first line of your letter.   Got a photo that will make someone’s blood boil … a story that will leave a prospect shaking her head … a real opportunity to make a once-in-a-lifetime difference?  Make sure you whack your prospect over the head with it right away.

Remember – prospects don’t have the time, or the inclination, to patiently wade through our packages, searching for something to excite them.  Don’t hide your good stuff!  Unless you hit them with it quickly, they’ll hit the road.  And you’ll lose an opportunity to find a new friend.

Rule #6: If you want the prospect to treat you special, then treat them special.

The process of acquisition is pretty incredible when you stop to think about it.  Every time you send out that package you’re asking someone to stop what she’s doing … listen to what you’re saying … and then thank you for intruding on her life by reaching back out to you with a check.    So it’s fair to ask – are you doing enough on your end to make the experience as special as it can be?

As direct marketers, we sometimes become jaded about personalization, because we’ve seen it so often.  But guess what – leveraging its power is still one of the most powerful ways to find a new friend.   Examples?

• When was the last time you tested a closed face envelope in acquisition?  Simply using this kind of envelope, which makes your outer envelope look truly personal, often lifts response in acquisition 25% and more.
• What about using a cornercard namesticker on your outer envelope, or a commemorative stamp created for your mission?  One of my longest running control packages saw results jump over 10% when I introduced those simple concepts.
• I’ve seen instances when real-looking, handwritten imaging on an outer envelope increases response 25%.  And if you image that type in 18 point type (so it’s the same size normal people write their address blocks), it can increase response another 10%.
• A handwritten teaser on the back of the envelope?  A personalized post-it note on the reply slip?  A long, handwritten P.S. which starts at the bottom of the page, and runs vertically up to the top?  I’ve seen these simple, highly personalized approaches increase results in acquisition 20% and more.

And you know those name labels you’re going to include in your next acquisition package?  If you simply indent and bold the name … make the type bigger (just mail to prospects with three line addresses!) … and add gold foil … you could easily lift results 20% or more.  ‘Making it special’ can make a truly special difference in getting results.

Rule #7: Focus on the right side of the brain first, second, always.

More often than not, there’s a direct correlation between how much emotion a package creates, and how much response it generates.

Next time you’re ready to drop a new test into the mail, stop for a moment and ask yourself this simple question – does my package touch a nerve?   Is this likely to make the recipient feel (and that’s the operative word) anger?  Guilt?  Compassion?  Hope?

Our donor public is filled with good and caring people who feel even better about themselves when they can help a fellow human being in need.   So the more you can touch a prospect’s heart, and let that prospect share in the miracle of making a difference for someone touched by your mission, the more successful you’ll be. Always remember – people don’t give to you because you have needs.  They give to you because you meet needs, most of all the human need we all have to make a difference in the world.  Is your prospecting mail doing that today?

To read more News Articles Click here

Formats in the ‘News’: Part 2

In this month’s comparative review of newsletter formats you’ll find a quick checklist of the newsletter assets that are working for many organizations. Newsletters inserted within special appeals, year end campaigns and to support invitations to special levels of giving – monthly sustainer and planned giving – are just a few examples of how the newsletter insert is evolving as a very strategic cultivation and revenue generating fundraising vehicle. Consider these essential elements as you plan your next newsletter communiqué….

To read more News Articles Click here

While the implementation process can be mysterious and meticulous, there are several misconceptions that are important to recognize in order to have a thorough understanding of today’s direct mail production process.

1) All Commingling is Equal – Not!

The purpose of commingling is to provide mailers postage cost savings and faster in-home delivery.  The financial savings and in-home delivery depend on volume.  In order to be cost effective, the commingler must build up enough volume to fill the trucks to deliver to NDCs (National Distribution Centers) and SCFs (Sectional Center Facilities) around the country.

Important factors to consider with commingling are how many days per week will mail drop and to what type of facility will the majority of mail deliver.  Larger commingle facilities tend to drop three days per week, with most of their volume delivering to SCFs.  Smaller comminglers, including mail shops that commingle in-house, may only mail once or twice per week in order to accumulate enough volume to fill the appropriate trucks and to deliver to the SCF or NDC levels.

If smaller comminglers mail more frequently, the volume may be too low to where the mail may not qualify as deep into the postal system and in-home delivery could be negatively impacted.

2) Print Overs / Spoilage – A Must

Highlighted in our newsletter article several months ago (http://www.productionsolutions.com/i-don%e2%80%99t-pay-for-overs-really/), print spoilage causes industry confusion.  How much quantity is being added?  Is any quantity  being added at all?  The truth is that spoilage is always being factored into print quantities whether it is “rolled into” the price per thousand, listed as a separate line item or simply added onto the mail quantity.

The spoilage amount should vary on factors like quantity, how many names are printed on one sheet (for personalized components), how expensive the job is to reprint and how many mail shop processes the component will run through.

For example, a generic letter of 250,000 pieces may only receive 2% spoilage, as it only runs on the mail shop’s inserters.  But an affixed and personalized membership card and reply form may receive 8% – 10% spoilage due to the multiple names on a sheet and the processes of affixing the card, personalizing, trimming, folding and inserting.  Each of those steps will have jams and errors where sheets will need to be re-run.

3) Overseas Premium Schedules – Does it Always Have to Take 3 Months?

With premiums, the concern is always the schedule.  The assumption is that production will take three or more months to complete.  But there are ways to shorten that schedule.

Option # 1 – You can produce the premium in the United States.  There will more than likely be a cost increase, but if delivery is the driving decision, this move can turn completion time from months into weeks.

Option # 2 – The majority of the overseas production schedule is the boat freight across the ocean.  Air freight is an option to speed up delivery.  Like producing the premiums domestically, air freight will certainly add cost to the bottom line, but it will shave weeks off delivery.

Option # 3 – Almost always, a significant amount of time is built in to create the premium prototype.  Once the prototype is approved and one successful production has been completed, any reproduction using that same prototype will have that time removed, which will expedite the implementation process by one or two (or possibly more) weeks.

4) Seed Names – Are They a True Representation of the Mail File?

Seed names are added to a mail file to verify the in-home delivery to a specific location and to verify that the mailing was produced as requested.  The expectation is that the seed names represent the entire mailing.  But if the seed names are sent as a separate file, mail shops may produce them separate from the live data.  This practice is obviously discouraged, as it can lead to mistakes on seed names  not present in the main mail file.

For example, if the seed names do not receive an ID number or source code in the original file, the mailing may still be produced perfectly, but panic may set in when seeds are received because the two codes happen to be missing from those specific packages.

5) Production Schedules – Why Have Schedules Gotten Longer, Not Shorter?

One misconception that consistently arises is the length of the production schedule.  In the “old days,” the basic production schedule was one week to print and one week to process data, personalize, insert and mail.  Nowadays, that “basic” schedule seems to have lengthened to three to four weeks.

The production schedule has a lot to do with quantity, complexity, time of year and ability to problem-solve.  Yes, with the right type of mailing, production can be done in two weeks.  The package should be basic, i.e. no labels (with dies), affixed plastic membership cards, hand-work or premiums.  The quantity should be a reasonable amount confirmed with vendors.  And most importantly, everything must be delivered on time.

With a two week production schedule, there is little margin for delays, incorrect instructions, misprints, machine breakdowns, etc.  In addition, with the increased production speed, you may be assessed a surcharge for logistics like overtime, rush freight, etc.

The three- to four-week schedule may seem unreasonable but, if planned appropriately, it allows for a cost-effective mailing with time to make adjustments for changes, unforeseen delays and errors.

6) Digital Art Changes – Has Digital Art Really Changed the Game?

Technological advances have increased efficiency in many stages of the production process, including  the move to digital art files.  However, there is an assumption that, because the art file is digital and the proof is produced as a PDF,  changes can be made at the last minute with no consequence to cost or schedule.

Changes during the proof stage will certainly add time and cost because the situation involves pre-press going into the existing file and making the corrections needed.  Anytime changes are made, there is an opportunity for error and the file must still be re-manipulated and calibrated for their presses.

7) Quick Estimating – Awarding Work on Fast Price Turnaround

When quoting work, patience is important.  Mailers that demand pricing in a few hours can leave money on the table.  If a buyer can allow time for multiple bids, companies who may take a little longer to quote could provide an excellent price.

There is no correlation between the speed of a quote returned and the price.  And there is little correlation between the speed of the quote and the speed of service when the job is in production (as you will probably deal with different departments).  Allowing some time in the bidding schedule could represent savings to the mailings’ bottom line.

For more information about the common misperceptions of direct mail production, email one of our client service managers at psi-clientservices@psmail.com or call (703) 734-5700.

To read more News Articles Click here

So where do you begin?  First, ask yourself three overarching questions about your current production resources.

1. Does the quality of the finished product meet your expectations?
2. Are you getting consistent and dependable service?
3. Is the production process efficient enough to save you time and money?

If you hesitate to answer YES to any of these questions, it is time for a production audit.

Status quo is no longer acceptable

It is natural to get stuck “doing things the way we have always done them.”  If it is not broken why fix it?  But in today’s marketplace, mailers do not have the luxury of maintaining status quo any longer.  Ask any seasoned direct mail production manager if one of their trusted resources has been sold, merged with another company or, even worse, closed their doors in the past few years.  I doubt that anyone could answer no.  With all of the industry consolidation in the past ten years and the advancement of technology, the production process has had to evolve to remain effective.  In today’s environment you must take nothing for granted.  Now is the right time for you to verify that you are aligned with the most effective resources in the marketplace, that you are leveraging the benefits of the new technologies and that your systems and procedures are as efficient they can be.

7 key questions to ask as you perform a production audit.

1. Are you leveraging your mail volume?

We all know that the greater the mail volume, the better the pricing you can negotiate.  Many mailers don’t leverage the volume of their total program to achieve the greatest cost savings.  Take your program as a whole and look for similar component sizes, paper stocks and colors.  Review your different production schedules and look for opportunities to gang multiple print jobs into one larger run with plate changes.  Consolidate your work with fewer key suppliers to increase your total volume to negotiate a lower price.  However, be careful not to put all of your eggs in one basket.  With all of the current industry consolidation, limit your risk by having your work balanced between your key suppliers.  This philosophy has served us well.

2. Are you taking advantage of new industry suppliers and production technologies?

Let’s face it – everyone is busy.  Just getting the mail out “right and on time” is hard enough given the challenges you have with limited staff and large workloads.  It is easy to get stuck producing your packages with the same old suppliers on the same old machines.  But now, the supplier landscape is changing at an unparalleled rate, and a good production manager needs to keep on top of these changes.  Though it is hard to balance the deadlines of today and the research projects for tomorrow, you must make it a priority for your team to continually learn what today’s marketplace has to offer.  Here are some resource areas to think about as you expand your industry outreach:

• New in-line (or quasi in-line) formats
• Digital printing advancements
• Lower-cost personalization techniques
• Automation of traditionally high touch processes
• Managing postal logistics by “in home” date
• Affordable premiums

3. Are you testing alternative cost-saving package formats?

Everyday a new package technique, treatment or format is being tested in the mail, whether it is to increase response or to reduce cost.  The supplier marketplace is filled with ideas that could be incorporated into your programs.  Start investigating these new ideas with your current production resources.  Ask the question “how can I produce this package more cost effectively?”  Ask your lettershop how you can optimize your postal logistics for the lowest cost possible (ensuring an acceptable “in home” date).  Hopefully, they will offer a number of suggestions to reduce cost and boost your package ROI.  Then reach out to additional suppliers in the marketplace to see what they can offer.  You just may find that a new technology or alternative resource can provide the cost savings you are looking for.  For example, you may be able to convert a traditional high-volume “lettershop” package to an in-line format. You may not only decrease your cost but increase your ability to personalize additional components.  The key to optimizing your package costs is leveraging all of the resources and technologies available in today’s marketplace.

4. Have you considered “contract” pricing instead of bidding your program job by job?

Traditionally, production jobs were bid out on a per package/job basis.  Each component was competitively bid and the supplier who came in with the lowest price won the work for that job.  As the next job began the same bidding exercise would begin again.  Some mailers have embraced contract pricing.  Mailers with higher and more predictable volumes have been able to establish annual contracts with their suppliers.  In exchange for the commitment of a year’s worth of work, the supplier would, in turn, offer a very competitive price.

The advantages of contractual pricing are:  1) no job-by-job bidding, 2) predictable budget costs, 3) reserved production time throughout the year and 4) expectation of consistent quality and service from job to job.  However, contractual agreements don’t work for every mailer.  If you don’t have a solid handle on your annual mail volume per program or package this arrangement may not be a feasible option.

Be sure to weigh the risks and benefits of contractual pricing carefully before you make the commitment to your suppliers and base your budget costs on the committed volume.

5. Have you recently tested the effectiveness of your “contract” pricing by “spot” bidding your active jobs?

As discussed above, many mailers routinely negotiate program or contract pricing with their suppliers.  But, even though contract pricing should save time and money, it may not always get you the best pricing.  With the volatility of the paper market and the dynamics of an ever-changing printing and mailing marketplace, your original price may no longer be competitive.  After many years of testing “spot” buying vs. negotiating contract pricing, we have determined that “spot” pricing can, at times, be more competitive than contract pricing.  For this reason, PS periodically performs market price checks for all of our contractual arrangements to ensure that our clients are truly getting the best pricing.

6. Have you reviewed the efficiency of the production process with your current suppliers?

To ensure that you are working with your supplier in the most efficient way, we suggest that you schedule periodic meetings to discuss the workflow process for the different programs they produce.  Ask your team to give you candid feedback about your suppliers in the following categories:

• Accuracy
• Product Quality
• Schedule
• Customer Service / Responsiveness
• Pricing and Problem Solving

Once you have collected the feedback, share it openly and honestly with your supplier.  Then ask your supplier to give you feedback on how your team is doing.  Focus on what each side could be doing differently to make the production process more streamlined.  You may be surprised by what you learn.  The discovery from these meetings has led to many process improvements with our supplier base.  In most cases the efficiencies come from improvements in communication between the client and supplier.  On the client side, the format, timeliness and accuracy of instructions are crucial.  Timeliness, accuracy of approvals and deliveries are the main concerns on the supplier side.

7. Are your production resources adaptable to the new multichannel marketing environment?

With the introduction of the digital age, the marketing and fundraising world has been permanently changed.  More and more marketers and fundraisers are integrating their traditional print and mail programs into multichannel programs.  Print and mail suppliers will need to be flexible and technologically advanced enough to work with these multi-dimensional programs.  The suppliers that continue to evolve will be our suppliers of the future.

Our marketplace will continue to evolve.  We will continue to see more consolidation and decreases in demand.  What the landscape will look like in 3-5 years is anybody’s guess.  We need to continue to ask the right questions.  Making a production audit part of your annual plan will help keep your team focused on keeping your program as streamlined and cost effective as possible.

For more information our production audit services, email one of our client service managers at psi-clientservices@psmail.com or call (703) 734-5700.

By Tom Gaffny, Tom Gaffny Consulting

If there’s one thing all nonprofit organizations can agree on these days, it’s that finding new donors (or recapturing old friends) has never been harder.  Whether your mission feeds the hungry, rescues animals or enlightens the community, building a donor base is tougher today than it’s ever been.

And are you ready for the really depressing part?  There’s no one, or easy, answer to this challenge.  As is the case with every aspect of marketing and fundraising, Finding Your Next Control is really a case of reaching the right person, with the right message at the right time.  How?  Here are 7 simple rules to keep in mind which will help you.

Rule #1: Always Remember … It’s Not About You.

Before you even think about developing your package strategy, you must first come to grips with the reality every fundraiser faces — none of this is about you.  It’s about your audience.

The plain truth is, 99.9% of the American public isn’t waiting breathlessly by the front door today, waiting for your next mailing to arrive.  Unless you can do something which engages them, which speaks to them, which excites them and connects with them – you’re going to fail.  Miserably.  No matter how brilliant your package is.

So the first step to finding a new control that achieves out of the ordinary results is to force yourself to have an out of body experience.  Step out of your shoes, and into those of that person you’re trying to reach.

Rule #2: It’s all about ‘them’ … and meeting their needs.

As a fundraiser, you are not in the educating or informing business — you’re in the engaging and selling business.  So before anything else, it’s important you remember the mantra which guides every successful salesperson: people don’t buy from you because you have needs, but because you meet needs … specifically theirs.

How then do you speak to your target audience’s needs?  Psychologists tell us there are four basic emotions that guide every human action, whether it’s the type of clothes they wear, the car they drive, the job they hold or the mission they support.

• Fear: We’re all motivated in some respects by fear, whether it’s our fear of getting a disease or seeing the planet destroyed.  If you can speak to your target audience’s fears, and provide a solution, you’ve got a chance.   Want real world proof?  Consider these ideas that help drive many of the best control packages in the industry:
  • Petitions
  • Invitations to send a card to your Congressperson
  • Deadlines … ‘Respond now or it will be too late.’
  • “Imagine” letters … ‘Imagine if you visited your doctor today, and were told you had cancer.’
  • Emergency appeals … ‘Act now before it’s too late.’

Fear is the friend of every marketer who wants to grab someone’s attention and get results.  Are you using it enough in your communications?

• Greed: Everyone these days wants “more” – whether it’s a better ‘free gift’ (why do you think 10 greeting cards invariably works better than 5?), or a great deal (there’s a reason ‘matching gifts’ almost always work).  Give people a deal they like, and they’ll give you their support.

Keep in mind, even if you are not giving them something tangible (name labels, cards, a calendar) you are giving them something even more important – the chance to feel good about themselves by doing good for others.   Take a look at your current control, and check out three areas in particular: the opening of the letter, the P.S. and the reply slip:

• Do these three components speak to your target audience?  Do they speak to the reader’s needs, aspirations, goals and hopes?
• Does the P.S., and most importantly, the reply slip, sum up the offer in language that promises the donor something in return?   Simply saying ‘yes I want to help’ in the reply slip is ok.  But saying ‘yes, I want to make a life-saving difference for children who need someone to care’ promises more psychic benefits to the donor.   Make sure your package reminds the donor what he or she is getting something back too, even if it’s just a good feeling.

• Guilt: If you’ve ever created a mailing for an overseas relief charity, you know from experience that a photo of a starving child invariably raises more money than a photo of a happy child.  Your Board of Directors hates hearing this, but ‘guilt’ sells.  Are you leveraging this emotion enough in your packages?

• Are you showing the problem … in honest, but vivid terms?
• Are you using stories which help the reader truly grasp the problem in a way that humanizes your cause, and helps the prospect take a walk in someone’s else’s shoes?
• Are you closing every appeal with a clear ‘consequence of inaction’ … something which spells out what will happen if the prospect doesn’t respond now?
• Are you asking … and asking again … and asking one more time?  Look at any successful control package, and you’ll see a common bond – every successful mailing asks for something back from the recipient.  If you’re shy about asking, your results will fall shy of your goal.

• Exclusivity: We all have a basic human need to feel special.    And this need doesn’t pertain only to your $1,000 super donors — it’s something that drives results across every demographic, and every giving group.  Proof?

• Personalization: The act of calling someone by name, as opposed to ‘friend’, is itself a way of setting someone apart from everyone else.  Simply addressing someone by their name can have a dramatic impact on results.
• Fancy packaging:  Ask yourself — are you more likely to open a closed-face envelope than one with a window?  Are you more likely to read a handwritten greeting card than a typed note?  Are you more likely to return a reply envelope that’s already been stamped for you, as opposed to one that isn’t?  These are all examples of treating someone in a more exclusive way, and your target audience is turned on by these treatments every bit as much as you are.  Are you using them?
• Distinguishing credentials: If you were to spread out the 50 most time-tested controls in fundraising, I’d wager that at least a quarter of them are driven by some kind of distinguishing credential — a Member/Supporter card, a Certificate of Appreciation, a promise to list the recipient’s name in a Book of Honor.  Have you tested these within your current control?
• A passionate ‘you’ focus: If someone were to ask me the biggest error fundraisers make, it would be that they focus too much on what they want, and not what the prospect wants.   How does your current control measure up?  Take a moment to spread it over a table, and circle all the ‘you’ words and thoughts in green, and all the ‘we’ words and needs in red. If your package is covered with too much red, that’s a certain red flag that you’re not talking enough about the person you are hoping will write the check.

Before you create your next package, take a moment to review your current control and ask yourself two questions:  Am I leveraging all these four proven emotional triggers now?  And, if not, what can I do right now to introduce them into my package?

OK, now that we’ve talked about the really important stuff (understanding your target audience, and speaking to their needs).  Now the big question — what are the other ways you can leverage these insights into finding your next control?  Let’s talk about that next time…

Stay tuned for Part Two in our next issue.

Tom Gaffny is the principal of Tom Gaffny Consulting, an agency dedicated to providing breakthrough Strategic and Creative support for America’s leading nonprofit organizations.   In the past two decades, he has won 23 ECHO awards for creative excellence from the International Direct Marketing Association, as many as any Creative Director in the world, and more than 200 Creative Awards from the New England Direct Marketing Association.

To read more News Articles Click here

Based on what we know today, mailers should plan for a 2% – 3% postal increase to take place on January 22^nd 2012.  These new postal rates, which were based on the Consumer Price Index (CPI), were announced by the USPS in October and were just approved by the Postal Regulatory Commission (PRC) on November 22^nd.   But will this be the only increase we should be worried about in 2012?

There are many threats on the horizon for the USPS and for organizations that rely on it for their business survival.  Listed below are some highlights of the current situation and some suggestions on how to navigate the rough waters ahead.

U.S.Post Office Facts

1. The Postmaster General recently predicted that standard mail volume could potentially increase 2% by the year 2020.  However, he also predicted that first class mail will decrease as much as 47% by 2020, and will continue to decline due to the growing trends of online bill pay and online retail sales.
2. Overall, total mail volume is expected to decrease 20% in the next eight years.  To return to profitability, the USPS must find a way to close a $20 billion gap in the balance sheet.
3. Rates will continue to increase; the questions are how much and what classes of mail will be affected the most.  Annual Consumer Price Index (CPI) increases will fall short of profitability, but sharply increasing rates beyond the CPI will surely drive down demand.
4. Recognizing Fact #3, the USPS will have to dramatically reduce its expenses.

U.S. Post Office proposes to cut $20 billion of their costs over the next four years.

Legislative Changes (Congressional Approval Required)

• Retiree Health Benefit — Eliminate the pre-funding requirement into the retirement health benefit fund and allow the Post Office to privatize its health care and manage it like any private business would.  This change would save $5.5 billion dollars in 2011.
• Federal Employees Retirement System (FERS) Refund — Already approved in the president’s plan, a refund of $6.9 billion over two years will rectify the overpayment into the Federal Employment Retirement System.
• Five-Day Delivery — The Post Office assures mailers that it can start five-day delivery by January 2013 and have minimal impact on the mailing industry. This change would save $3 billion by 2015.

Operations

• Network Solutions — The Post Office proposes to optimize their network facility structure, which is currently set up for processing much larger first class mail volumes (300 billion) than actually exist (150 billion).  For example, SCFs and BMCs (now referred to as NDCs) will be consolidated, reducing processing from 480 facilities to an estimated 190, saving an estimated $3 billion.
• Consolidate Retail / Customer Service Facilities — Focusing on unprofitable facilities, the USPS has proposed to save $1.5 billion by consolidating consumer offices, contracting work and extending rural delivery for small retail post offices around the country.
• Delivery Route Reduction — By reducing over 20,000 carrier routes, the Post Office estimates $2 billion in savings and greater overall efficiency by 2015.

Compensation

• The USPS is looking internally at employee benefits, interest, flexibility and wages. It recently announced a 2-year executive salary-freeze and non-personnel efficiency opportunities that will save approximately $5 billion.

The Postmaster General has made it clear that charging predictable prices and providing good service are the keys to USPS survival.  He suggests increases should be based only on the Consumer Price Index (CPI) because increasing postage too much will drive mail volume down even further than projected.

In addition, the USPS plans to implement more programs that incentivize businesses and organizations to stay in the mail, such as eliminating the surcharge for the 2^nd ounce on first class mail and the Quick Response (QR) code program that was successful in integrating direct mail with the online marketing efforts in 2011.

Congressional Proposals:

1. An unpopular Congressional plan proposed this year to reduce the federal deficit further threatens nonprofit mailers. The “Postal Reform Act of 2011” also known as the “Issa Bill” proposes to eliminate the nonprofit postal rate subsidy altogether.  If passed, the nonprofit rate would increase an additional 2% over the CPI index each year until 2023, when nonprofit rates will equal that of standard mail. This could have a devastating effect on a nonprofit’s direct mail fundraising program. Click on the below link to see an ad campaign by Food for the Poor in association with DMA Action Legislation Center that attempts to portray the devastating impact of eliminating nonprofit rates: http://www.youtube.com/watch?v=C-jQWtbHcIY&feature=youtu.be
2. An alternative proposed Congressional plan that counters the ‘Postal Reform Act of 2011’ is the ‘21^st Century Postal Act of 2011.’  This bill tackles retiree health benefit prefunding, five-day delivery, door delivery, labor arbitration and USPS downsizing while maintaining the nonprofit postage rate.

What can you do?

We encourage our clients and colleagues to take action against the possible elimination of the nonprofit postal rate by clicking on the link below and completing a petition courtesy of the DMA Action Legislation Center: http://www.votervoice.net/core.aspx?AID=1129&Screen=alert&IssueId=26043&APP=GAC&SiteID=-1&VV_CULTURE=en-us

Another proactive solution is to utilize the Intelligent Mail Barcode (IMB), which tracks mail as it travels through USPS facilities.  As more facilities are consolidated, delivery delays will increase and mail dates may have to be adjusted to match last year’s in-home dates and corresponding cash flow projections.

In addition to mail tracking, businesses and nonprofit organizations should begin to integrate online campaigns with direct mail campaigns.  Knowing that customers are moving to online bill pay (60% in 2011 compared to 5% in 2000), people will soon follow with nonprofit donations.  To leverage all channels of communication and interaction, organizations must make it easy for constituents to donate online in conjunction with their direct mail programs.

The bottom line is — direct mail is here to stay!  Recent studies have shown that direct mail recipients have a higher emotional response to the physical package received in the mailbox versus an online communication.  While the U.S. Postal Service works to adapt in the changing market, mailers must embrace the changes by planning ahead, supporting USPS initiatives and fighting Congressional proposals that threaten to devastate the future of direct mail.

For more questions about the financial status of the Post Office or how to set your organization up for success during these uncertain times, email one of our client service managers at psi-clientservices@psmail.com or call (703) 734-5700.

To read more News Articles Click here

1.  Are you Talking to Me? (Click Thumbnail To View Video)

Opening this double panel self mailer you are taken by surprise by this special technique that gets your attention and makes a lasting impression.

2.  Engaging Techniques (Click Thumbnail To View Video)

Oversized and bumpy – this folded mailpiece engages the audience with an exclusive offer but once inside you’ll see this mailpiece keeps on giving. A tipped on booklet, interactive sticker, special discount cards – this is interactivity personified!

3.  Self Mailer Under Wraps (Click Thumbnail To View Video)

The poly wrap is a very distinctive technique frequently used in the catalogue and magazine industries but can be easily adapted to ‘wrap’ a direct mail communiqué – like greeting cards, gift wrapping paper or a self mailer. For example, this self mailer has 38 inches of potential that can be spliced and diced to accommodate many layouts and messages.  Adding the poly wrap gives the piece an additional level of intrigue.

4.  Not an Ordinary Envelope (Click Thumbnail To View Video)

This die cut template is a work horse mail format —available in a wide array of sizes offering the option of duplex personalization throughout.  Standard formats sizes are readily available with production schedules as short as 3 weeks.

To learn more about these and other innovative formats, email one of our client service managers at psi-clientservices@psmail.com or call (703) 734-5700.

To read more News Articles Click here

PS attended to learn what the best of the best are starting to do, and what they’re predicting is to come.

Giants such as the New York Times, Google, The Harvard Business Review, the American Marketing Association and the American Advertising Association taught us that:

1. social media is here to stay;
2. mobile is here and now;
3. paid ad words are a necessary evil;
4. and if we’re not on top of all of these advertising and marketing waves, we’ll be lost at sea.

The following are the top 10 corporate best practices we took away from the conference, all beneficial to both our commercial and nonprofit clients:

10.  Tumblr is the 8^th largest social media site and growing.   Anthony Pappas of the Pappas Group couldn’t stop his mantra: BELIEVE In Tumblr.  It’s the perfect marriage of Twitter and Facebook.  Check it out: www.tumblr.com.

9.  According to the Harvard Business Review (HBR), social media was born from the ancient days of cavemen around the campfire swapping stories.  It’s almost no different now, except the impact of the fire is up to you.  Social media merely amplifies what is already there; without substance and strategy, it might as well not exist.  Social media can breathe new life into solid brands such as HBR.

8.  According to Google and their faithful followers, Google Wallet is soon going to change how we use credit cards.  All of our affinity and rewards cards can all be tied to this purely mobile, plastic-less magic wand.

7.  The Yahoo! Mobile online study found that compared to 2010, consumers are spending 54% more time on their mobile Internet, 29% more time watching videos on a mobile device, and 49% more time talking and texting on a mobile phone.

6.  According to Eric Ludwig, Rosetta Stone’s Senior Director of Online Marketing, using social media is not much different than A/B testing a print package: “throttle” a campaign, track it and compare it to another campaign.  What yields better responses is the keeper.

5.  Bobby Franklin, the EVP of CTIA (The Wireless Association) said that mobile is not on the horizon … it is here.

4.  The Yahoo! Mobile online study concluded that mobile advertising will need to leverage location-awareness, portability and voice activation, thereby enhancing the mobile experience with meaningful content framed to the individual mobile mode.  In other words, you need to build it, because they are here already!

3.  8% of people are viewing ads via their mobile device, yet only 1% of corporate budgets are being spent on mobile advertising.  According to Elliott Nix, Senior Account Exec of Google Mobile Ads, even large players need to up the ante when it comes to mobile advertising.  Therefore, ad words on Facebook and Google are crucial to capturing a mobile device user.

2.  Bobby Franklin of CTIA and Elliott Nix of Google looked into their crystal balls and predicted that video phones are the next opportunity on the mobile horizon.  Think Skype on your phone.

1.  During the 2011 Oscars, World Cup and the Super Bowl, Yahoo! tracked online activity and found that it spiked during TV commercials … so basically, companies are still paying dearly for prime time ad slots even though their audiences are online.

We hope these nuggets will give you food for thought and help you gauge where your priorities will lie when it comes to social media, mobile and marketing.

To learn more about what we learned at AdWeek DC 2011, email one of our client service managers at psi-clientservices@psmail.com or call (703) 734-5700.

To read more News Articles Click here

The changes average 2.1%, the rate of inflation as measured by the Consumer Price Index.

Highlights of the proposal include:

The Postal Regulatory Commission has 45 days to review the proposed changes and verify that they comply with the legal requirement that the increases for each class of mail average no more than 2.1% as measured by the Consumer Price Index.

For more information or questions regarding this announcement, please contact the Production Solutions Client Services Department at psi-clientservices@psmail.com

To read more News Articles Click here

If you have ever produced a premium overseas then you will be familiar with some, or maybe all, of the pitfalls we highlight in this article.  However, if you are considering overseas premiums or have had issues with overseas production management, you may find this article helpful.

Including a premium in a direct response package can dramatically increase response rate.  But premiums are expensive, and for that reason many mailers have chosen to produce their premiums overseas to keep the cost down, even though managing overseas production can be challenging.  This article provides fifteen important areas to understand and anticipate before beginning an overseas production project.

1: Planning for Long and Unpredictable Production Schedules

The typical overseas premium production schedule is 90 to 100 days from purchase order to delivery (via boat).  Be sure to accommodate the timeline for this specific premium mailing as well as other direct response marketing programs depending on its mail date.

The production schedule is also subject to change based on worldwide events outside the buyers’ and sellers’ control.  For example, United States Customs must inspect all items arriving into this country.  Any issues with your product or even other products on the same boat will delay the check-in process.  Terror alerts can provide especially lengthy delays, as U. S. Customs slows down or even ceases operations!

Air freight will be faster than boat, of course.  But air freight transportation is so expensive that, in many cases, the premiums can be produced domestically for less cost.

2: Confirming the Details – Samples, Quantity Minimums and Overs

First, there are many interpretations to generic-sounding products like “grey t-shirt,” “stuffed elephant” or “umbrella.”  The most effective way to drive the bidding process is to provide samples, or even an image, for vendors to reference and replicate.

Second, since many overseas vendors need to meet minimum quantities to produce an item, you may need to negotiate if the order quantity is too low.  Incentives might include future work at higher quantities or repeat orders on a consistent basis.

And third, it is standard procedure for premium vendors to charge for extra quantity above what a buyer orders (commonly called “overs”).  This additional product cost should be discussed during the bidding process so the vendor knows how to accurately price and manage the work to avoid surprises on the final invoice.

3: The Small Details of the Pre-Prod Sample Approval

“Pre-Prod” is the proof the vendor provides before proceeding with production.  This sample is as important as any other proof, but there are many more points to quality control.  No question is too small to ask, as complete clarity on every detail is necessary.

A few examples of the miniscule details are the type, color and length of string used for a holiday ornament, the way the premium is placed in the plastic bag to ship and the method of affixing a premium to the inside of a paper tent card.

4: Machine Insertion Testing

Never assume that the premium will machine insert if it is mailing inside of an envelope.  Provide the letter shop samples as early as possible so test inserting can be run on their machines.  Ideally, this testing should be done before ordering the premiums to confirm the costs and schedules as early as possible.  Assuming successful machine inserting could be a budget and scheduling nightmare when the letter shop is forced to insert by hand!

Also, never assume that successful machine inserting at one letter shop means all letter shops can machine insert the same premium.  Letter shops have different equipment and each company should test before production begins.

5: Packaging Considerations

There are two types of post-production packaging to consider before the jobs starts.

How will the product be received?  The U.S. letter shop needs clear instructions on how the product will arrive so it does not add unexpected costs to remove the premiums from the boxes.  How will the items be packed?  Will the items be wrapped in plastic?  Will they be individually wrapped or wrapped in groups?

How will the product be shipped to your recipients?  Mailers will typically use Pre-Prods as a guide to order the packaging material.  If the premium needs to be protected or is 3-dimensional like a plush doll, coffee mug or flashlight, a box might work best.  However, if your premium can lay flat and withstand some postal processing like a hat or t-shirt, a Jiffy-Pak© might be a more cost effective, and eco-friendly, mailing method.

6: Postage Rate Classifications

Packaging also has a considerable role in the postage cost.  The important items to evaluate postage costs are the package type, quantity, size and weight.  Since the postal logistics surrounding these types of mailings are more complex than a normal letter-size package, it is imperative that the postal service is involved to determine the proper per-piece cost when budgeting.

Weight is a particularly sensitive item.  Premiums that are produced overseas, especially ones that are produced by hand, can fluctuate in weight.  It is possible for premium mailing postage rates to not have one per piece rate, but to have a range based on the varying package weights.  Because this range makes it difficult to accurately budget, discussing consistent weights before production begins is important.

If the premium is being inserted into a basic letter-size paper envelope, testing is also recommended to confirm the proper postage rate.  The mailing may fall into a non-machinable postal category if the mail piece is too rigid, which will greatly increase your postage cost.

7: Understanding Foreign Countries’ Holidays

Foreign countries observe their own holidays, which of course tend to differ from U.S. scheduled holidays.  Some of these foreign country holidays will be extended beyond one day.  It is essential to incorporate the nation’s holidays into project planning.

China, a popular country for overseas premium production, has their New Year (typically in February) that can last two weeks!   This easily-preventable oversight can wreak havoc with the quote receipt and production time, which ultimately will delay the mail date.

8: Currency Exchange Rate Fluctuation

Overseas vendors will only allow pricing to remain valid for a short time (as little as a few days!) due to current worldwide economic conditions and the fluctuating currency exchange rate. Not surprisingly, vendors are attempting to reduce their financial exposure by minimizing the time between the bid and the order placement.

Buyers must be aware of this time period, plan accordingly and be open to price changes if the approval timeline is not met.

9: Confirming Labor Practices and Raw Material Testing

Type “overseas labor practices” into Google and a list of top U.S. companies is displayed with common “responsibility” and “criticism” themes posted throughout the articles.

We are not concerned simply about child labor laws either.  Overseas labor practices should also include the number of daily work hours, fair employee wages and working conditions.  Most U.S. companies and organizations will require paperwork confirming that the overseas factories producing their premiums are compliant with U.S. standards.

In addition, paperwork should be filed confirming that the premiums are not made of harmful chemicals and materials like lead paint or asbestos.  While this step may seem obvious, these discussions should happen before beginning a project, especially with a new, untested vendor.

Make sure the paperwork received is written in English and not the producing country’s native language!

10: Country of Origin Identification

It is a requirement that products created outside the United States must clearly display the name of the country of origin, i.e. “Made in China” on every piece.   The international rules can be challenging to decipher, so it is beneficial to consult the vendor for best legal practices.

Most organizations that produce premiums overseas will display the language in creative ways, such as a small font size on the back of the piece or on a sticker that is affixed to the shipping bag.  This way, the text is removed once the person receives the gift and opens the bag.

To read more News Articles Click here