2018 Direct Mail and Postal News: Increased Response Rate and Postal Rate Increase

Sean Connor  |  December 21, 2017  |   Marketing Fulfillment,   Distributed Sales Force,   Fulfillment,   Life Sciences Marketing,  

Sean Connor
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There are plenty of exciting changes and improvements coming to the US Postal Service in 2018.  Today we’ll tackle the status of direct mail responses and the upcoming postal increase.

 

First the good news… 

 

Direct Mail Response Rates:

Overall direct mail response rose to 5.1% in 2016 according to the DMA.

 

Direct mail response rates took a tremendous leap in 2016 with a 5.3% response rate to house lists and 2.9% to prospect lists. These are the highest levels the DMA has tracked since 2003. For comparison, in 2015 the rates were 3.7% and 1.0% respectively. In 2010 it was 3.4% and 1.4%.

2016 direct mail response rates far exceed digital channels. No other channel exceeded 1% response.  Digital channel response rates were Online Display (0.9%), Email (0.45%) Social Media (0.6%), and Paid Search (0.5%).  

This increase can be attributed to several factors:

  • Better targeted mail- getting the right message to the right recipients at the right time through data capture, analytics and list/offer segmentation.
  • Increased personalization- tailoring the mailpiece and message to each individual recipient’s needs even within a large mailing
  • Address quality- as boring as it may seem, reducing poor address quality and ensuring the message gets to the person is vitally important
  • Response options- in addition to reply mail and phone, recipients can now choose to respond easily via email, web sites, PURLs, and mobile devices
  • Coordination with other marketing channels- the use of email, social media and purls along with direct mail enhances the likelihood of a positive response
  • Better mailers- including better design, content, and presentation with increased use of digital variable print

 

And the bad news…

Postal increase 1/21/18-

The US Postal Service and Postal Regulatory Commission have approved a rate increase effective January 21, 2018.  All new rates can be found on the USPS website.

For reference Market Dominant products and prices are required by law to be tied to inflation based on the Consumer Price Index (CPI).  These products include 1st Class, USPS Marketing Mail (formerly Standard Mail) and Bound Printed Matter.

Competitive Products do not have this same pricing restriction.  These products include Shipping Services such as Priority Mail, Parcel Select and International services. 

  • 1st Class - the average price increase is 1.9%
  • Bound Printed Matter will increase 1-3% overall.
  • The postage increase for Nonprofit mail is higher- 4.4% to 6.9%.
  • 1st Class forever stamp – currently at $.49 will increase to $.50

In addition the postage discount for Letter SCF entry will decrease- the gap between NDC and SCF discount is narrowed- reduced from 2 cents to 1.6 cents.  USPS had been overstating the savings of this work-sharing, and so made this adjustment.  This could also increase mail at NDCs which some analysts feel could impact USPS service performance due to increased workload.

Shipping Services such as Priority Mail, Parcel Select prices will increase between 4.9-7%, International about 3.9%.  The Postal Service has strategically adjusted pricing higher in areas where competition is not as fierce, and less so where the USPS has more competition.

FedEx is also raising its rates next year by an average of 4.9%, effective January 1, 2018, while UPS will raise rates by an average of 4.9% on December 24, 2017.

 

Move Update

Another change taking effect on 1/21/18- the tolerance for noncompliance with Move Update was 30%, meaning if 70% of the mail was in compliance, there was no issue.  The new tolerance for noncompliance- will be .5%.  The noncompliance charge is $.08 per piece- up from $.07.  It is now crucial that mail owners and mailers ensure their CASS and Move Update software is up to date and process correctly.

 

Next time in 2018 Postal News: Informed Visibility and Informed Delivery explained

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