On July 14, 2024, the United States Postal Service (USPS) increased postal rates for the second time this year. While this was announced well in advance and the agency has been increasing rates at more frequent intervals recently, many will still be concerned about hitting postage budget limits before year end.
What are the best ways to manage an inevitable situation drastically affecting your budget?
Keep a clear and open mind.
Price increases are an unfortunate part of doing business. Whether you figured an increase into this year’s budget estimates or not, you can adjust to these changes if you approach it with a clear and open mind. The market will typically justify your company’s pricing with profits following suit. Have faith in your ability to manage your business and be flexible to options that help you stay on track. If a postage increase is the worst thing that happens to your business this year, consider it a great year!
Be creative with your systems and designs
If you are faced with needing to cut your postal budget, look to more affordable piece sizes and weights or consider different delivery options or services. Although a glossy, full-color catalog may stand out in the mailbox, you can also try testing a lighter, flat mailer with a QR code that takes your customers to your website with those same products and see how that performs. Adding more lead time to your campaign and using a different mail service can also help cut costs. Could LTL, comailing or comingling be something you could take advantage of?
Whenever possible, look to changes in your creative or delivery services and save cutting your audience size as an absolute last resort. You may even find that these changes free up budget allowing you to increase your list size and reach even more potential customers.
Review and investigate every aspect of your program
It can also pay to take a second look at your entire approach to mailing, not just the big budget hits. Putting a fresh set of eyes on your lists, designs, schedules, service providers and anything that touches your mail campaigns can open up opportunities for not only cost savings, but delivery efficiencies and performance improvements.
When was the last time you really dug into the details of how your mailers are being produced and delivered? The industry is changing and innovating, and postage increases are nowhere near as simple as they seem on the surface. Most times they are accompanied with changes to service-level discounts that are added or eliminated. That means a class level, service or drop-in point that once made good financial sense for you may no longer, but without being well versed in the intricacies of the postal code, it’s hard to keep up with that.
Think ahead
The bottom line with this increase, and others you will see this and next year, is that costs can and will rise, it’s the nature of the economy. If you didn’t plan ahead for an increase this year, be sure that you keep it in mind for next year’s budgeting. Your best course of action with postage is the same as with all aspects of your business: look for creative ways to cut costs without negatively impacting your operations.
And when it comes to the complexities of mail, bringing in an industry expert to review your lists and systems is a worthwhile investment, especially in the face of changes like what we’re facing now. Our team is always happy to provide a complimentary consultation that brings fresh eyes to your program. We specialize in helping companies catch up to industry trends and find efficiencies that extend budgets a little further.
