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Sean Connor 12/21/17 1:01 PM

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

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

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 increases.

The Good News: Response Rates Improve

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:

  • 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 mail piece 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: This includes better design, content, and presentation with increased use of digital variable print.

The Bad News: Postal Increases Take Effect 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 First 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. 

  • First Class: The average price increase is 1.9%

  • Bound Printed Matter: This will increase 1-3% overall.

  • Nonprofit Mail: The postage increase is higher, from 4.4% to 6.9%.

  • First Class Forever Stamp: It's currently at $.49, but 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 thus 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 and Parcel Select prices will see increases between 4.9-7%, and 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 is the Move Update. Tolerance for noncompliance 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.

Prepare For Postal Increases With Jet Mail

To best prepare for these changes, contact the experts at Jet Mail. We have the infrastructure, technology, and expertise to keep your business ahead of the curve.

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