Cost Savings Series – Topic #6: Postal!
Another great round of Cost Savings Tips to share with you is here – this time around Postage! With the upcoming postal rate increases going into effect on August 29th, it may be a good time to double check if there are wiser ways to spend your postage budget.
Tip #1 – Take advantage of the USPS Mailing Promotions.
If you walked out your door and were surprised by dollar bills falling from the sky would you make an effort to jog around and grab as many as possible? Most people would because free money is worth a little effort. Well, the USPS is handing out free money in the form of discounts for mailers that sign up for one of six promotions and the lift on your part is well worth the effort to garner up to a 2% discount on postage or a $0.02 credit with the Earned Value Reply Mail promotion. And to make it even more enticing to try something new, in 2022 the USPS is increasing the discount to up to 4% and the length of time you can take advantage on some promotions such as Informed Delivery. Trust us – this is a no brainer and relatively easy to sign up to take advantage of so don’t be left out and leave free money on the table.
Tip #2 – Consider Single Piece First Class Meter Mail over Stamped.
If you mail Single Piece First Class Stamp mail consider applying a meter rather than a stamp. A couple years back the USPS created a $0.05 difference in the two postage treatments so if using an actual stamp isn’t vital to your campaign creative consider switching to a meter.
Tip #3 – Check your weight.
Every ounce matters when it comes to Flats – especially with the new postage rates. When your mailpiece is 4 oz. or less the actual weight of the piece doesn’t impact your postage cost and you can add a component or increase page size without increasing postage expenses. But when your mailpiece is over 4 ounces the pricing increases incrementally based on weight and you’re charged a “per piece” rate along with a “per pound” rate. If your mailpiece is hovering around 4 ounces it’s a good idea to consider if any small changes could get you to the 4 oz. or less break point as it will save you postage dollars.
It’s even more important to review this due to the Aug 29th price changes because while pricing for Nonprofit Flat Mail 4 oz. or less is increasing 12% on average the Nonprofit Flat Mail over 4 oz. piece rates are increasing 11.5% on average in addition to close to 5% increases at the per pound factor that makes up your pricing.
Here is an example: A Nonprofit Marketing Mail Flat that’s under 4 oz. prepared as 3 digit DNDC entry will cost $0.367 per piece. If the same mailpiece was bumped up to 5 oz. it would cost $0.406 (+$0.04) which for a mailing of 150,000 pieces would be almost an additional $6,000 in postage. So, you can see that weight really matters with flats and its best to count your ounces.
Tip #4 – Annually review your Postage Paid Reply Mail.
We often see Non profit mailers include live stamped reply envelopes in their mailings and we get that they do so because of the perceived value and return they have on their campaigns. But we encourage mailers to consider whether the USPS Business Reply Mail (BRM) or Qualified Business Reply Mail (QBRM) makes sense. Here are some examples of the math break down for the upcoming postage rate changes on Aug 29th;
A mailer that receives 970,000 pieces or more would end up paying $0.69 cents a piece if they were signed up for BRM. Sure this is more than the $0.58 cost of the stamp you would have applied but when you consider how many stamps you actually purchase that never get used you may find it more economical to switch to BRM. You can use this chart below that outlines the fee’s associated with using these services and an example:
Example: If you mail 50,000 pieces that contain a stamped Reply Envelope your RE postage expense would be $29,000 (50k x $0.58). Now let’s say you expect a 7% response (50k/7% = 3,500 pieces) it’ll be as if you are paying $8.29 a piece to get each of these 3,500 returned to you. If you take advantage of one of the USPS BRM services such as High Volume BRM the math could look like this; $1 ,065 for the annual fee’s divided by 3,500 responses = $.030 per piece + $.058 for postage = $0.88 per piece for a total investment of $3,095. Plus in this scenario you would have covered the expense of the annual fee so the per piece expense would be the pure postage of $0.58 per piece for any additional reply pieces you receive under this permit during the 12 month period.
Tip #5 – Take advantage of more real estate on your Presorted First-Class Postcards.
To coincide with the upcoming postal rate changes the maximum size of Presorted First Class Postcards will be 9 inches length and 6 inches height, in lieu of the current limits of 6 inches length and 4 ¼ inches height. Why the change? The USPS hopes the increased size will create additional opportunities for mailers to include new technologies (e.g., QR codes, textures) as well as additional space for creative.
*All Postage Rate examples and reference to the changes in Presorted First Class Postcard sizes will be in effect with the upcoming August 29th Rate Changes.
Be sure to stay on top of the new rates by downloading our handy Postage Rate Chart!