Setting the Best Postage Rates for Catalogs and Direct Mail
What was right and wrong with the Post Office’s “Summer Sales”? Well, thanks to the lobbying efforts of the American Catalog Mailers Association, the Post Office actually crafted a response to the catalog industry. The first step to communication is listening. The good news is that the Post Office listened.
The “Summer Sale” wasn’t perfect — it only included catalogs that increased their prospecting circulation; it only applied to the summer rather than a global reduction in postage; among other things. But at least the Post Office showed a willingness to listen and work with direct marketers to create programs to help increase their mail volumes. Now it's up to the Post Office to listen again and come up with permanent solutions that serve to increase overall profitable mail volume.
I believe the Post Office must take the simple step of decreasing the cost for carrier route mail. Decreasing the cost of carrier route, sorted mail will actually increase volume and accelerate the growth of co-mailing and the technological solutions driving co-mail. Decreasing the cost of carrier route mail will inevitably increase mail volume. Such a gesture would show the direct marketing industry that the Post Office could be a business partner, resulting in not only greater volume but also greater profits for the USPS.
P.S. (because all good direct mail letters have a postscript): The Post Office needs to share its studies of the relationship between bulk mail costs and volume and Post Office profitability. Direct marketers know that as result of the last big postage increase in 2007, volume tanked because mailers simply read their break-even numbers and mailed less. What they don’t know is what happened to USPS profitability based on that diminished volume.
But I’d bet that a close examination of before and after the 2007 price increase would reveal that the Post Office was more profitable before. The reason? It had so much more volume. Imagine the stimulus it would be if the Post Office went back to the “good old days” when postage was 30 percent lower and direct marketers could mail bigger circulations profitably?