Postal optimisation: A growing business imperative (U.S)
As U.S. postal rates continue to rise each year—including a projected increase of around 4 pct this May—direct marketers are continually challenged to offset these costs, which can represent up to 65 pct of total direct mail project budgets. Yet many marketers fail to focus their cost-reduction efforts on postage, trying instead to reduce expenses involving printing, materials and other campaign elements. Only by focusing more on reducing postage costs and optimizing campaigns will marketers be able to proactively manage budgets for profitability while still maintaining the integrity of their direct mail programs.
It will be up to marketers and their industry partners to find ways to lessen the hardships created by escalating postal costs. No longer can postage be considered a “pass-through” cost over which marketers have little or no control. This would lead to dwindling budgets for program execution and less effectiveness overall for direct mail. It also could potentially move customers to look more closely at other marketing platforms that could be viewed as economically advantageous due to the rising costs of print mail.
In addition to examining creative ways to reduce the cost of postage itself, the overall optimization of a campaign has become paramount. Diminished consumer response rates, postal waste due to the large amount of undeliverable-as-addressed mail and inefficiencies in the National Change of Address system pose their own unique challenges, as does the movement toward environmentally friendly business practices to reduce paper usage.
Smart marketers already have begun meeting these challenges by aggressively integrating postal optimization, logistics strategies and campaign optimization techniques that not only promise to curb postal costs but also to improve address accuracy and enhance response rates, contributing significantly to the ultimate success of a campaign.
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