USPS to make simplified address direct mail trial permanent

The US Postal Service is asking regulators to allow its simplified direct marketing service for small businesses to become a permanent offering. The Every Door Direct Mail service has proved successful since the start of trials last year, USPS told the Postal Regulatory Commission as it filed a request to add the programme to its portfolio of market-dominant products.

EDDM allows small businesses to use Standard Mail to send out advertising materials to every residential address on a carrier route, sending out up to 5,000 mailpieces at a time without requiring a mailing permit.

The key to the success of the saturation mail service is the ease with which an SME can select which carrier route or routes in which to distribute marketing materials through an online tool. Items are then dropped off at the customer’s local post office.

Along with simplified rules, EDDM is seen as an important way to bring onboard small businesses who have not used the mail as a marketing channel before because they lack staff with specific direct marketing skills.

USPS has also been trialling a larger scale version of EDDM for larger companies dropping mail at business mail entry units, but this week said it wants to add the retail version of the programme to its Mail Classification Schedule.

The retail programme has brought in $43m in revenues since trials began at the end of March 2011, the Postal Service said this week, while revenues since the start of April – when USPS launched a major advertising campaign surrounding the service – have already reached $38m.

Up to June, more than 32,000 small businesses had signed up to participate in the programme, while there have been more than 105,000 transactions at post offices.

USPS believes the programme will reach the $50m limit on revenue from a trial service by September.

“The market test has already demonstrated that sending advertising mail to every address within a community, with fewer rules, rates, and regulations, is a popular way to connect to potential and actual local customers,” the USPS told regulators.

Executives have said including the bulk mail version of the service, they want to see Every Door Direct Mail become a billion dollar revenue generator.

Rates to rise

The EDDM retail programme is currently priced at the Standard Mail saturation mail rate, but when it becomes a permanent fixture, USPS wants to set a 16 cent per piece rate, about 10% more than the standard saturation rate.

The new price would set the retail version of the programme as more expensive than the version for larger mailers.

So far the trial programme has proved quite profitable for USPS, with its regulatory filing suggesting that attributable costs for the service have been just under the 8 cent per piece level.

USPS said the higher rate proposed for the retail product was justified because of the added convenience for its customers of being able to drop off items at post offices and avoid paying a permit fee.