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Paul Costello
Business Marketing
Boston, Massachusetts
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Please Raise Postage

Yes - I'm a direct marketer and I said it: PLEASE RAISE POSTAGE. Charge us more. If this is what it takes to price ineffective marketing out of the market, so be it.
Written Sep 27, 2011, read 4467 times since then.
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An open letter to Uncle Sam

Dear Uncle Sam,

I am a direct marketer, and as such I rely on direct mail to meet the business and marketing objectives of my clients.  When done right, there are few more effective channels.  And I have you to thank for that, with your reliable postal army completing the last leg of our meticulously-crafted marketing campaigns – whether snow, hail or ill-tempered Jack Russell.

So it should come as no surprise that my clients and I are concerned about the troubles we hear of at the USPS.  But unlike many in my position, I have a different request for you: PLEASE RAISE POSTAGE.  Yes, I said it.  Please do us all a favor and raise the price of US postage.  Allow me to make my case for more expensive mail. 

Mail was once rare, special and intimate.  Like many once-cherished vestiges of society (airline travel, motion pictures, customer service), direct mail fell prey to the evolution towards an insufferable commodity. Somewhere along the line it became acceptable to abuse the personal space of one’s mailbox.  It was in the interest of the agency and the print shop to flood the market with their clients’ budget, littering doorsteps at random with coupon fliers and envelopes fat with coupons for cat grooming.

Lead aggregators, shared mailers, printers with idle machines and less sophisticated marketers, who care more about selling quantity than quality, have given the industry a bad name.  To them, direct marketing is little more than placing a billboard on a postcard – or as we like say in the industry "spray and pray."  

So why should us honest marketers care about such purveyors of bad marketing?

  • Industry Perception – if your mail only included brands you use or like, the term “junk mail” would not exist
  • Industry Averages – when it can be tracked, poorly-executed mail redeems at <1%, where as our targeted campaigns reach well into double digit returns
  • Mailbox Clutter – well-constructed marketing campaigns can get lost in the sea of the poorly-targeted ~3K marketing impressions the average customer receives every day
  • Client Conditioning – junior clients are easily sold on cost, while return on investment seems more complex and often seen as “NMP”
  • Client Budgets – per previous point, there’s only so much budget to go around, so little is left after clients load up on the cheap “empty calories” of bad marketing
  • Client Trust – misled list companies and shared mailers harm client trust of the channel with the empty promise of "impressions"

The list goes on.  So what is one on the right side of the direct marketing quality divide to do?  I say, raise postage – price bad marketing out of the market.  Make ineffective marketers scramble to justify their damaged goods.  If this is what it takes for clients to finally realize quantity will never outperform quality, then so be it.

There’s a reason BMWs cost more than jalopies, a reason that Guinness costs more than lawnmower beer, a reason that there are far more seats in Coach than Business Class.  Value, performance and return on investment are obvious in all other industries – why should marketing be any different? 

So, Uncle Sam, I beg of you: raise postage.  It’s time for casual marketers to take stock of what they’re getting for their money.

Sincerely,

Sam Sample

Learn more about the author, Paul Costello.

Comment on this article

  • Website Design/Dev & SEO 
Tacoma, Washington 
Matthew Fleming
    Posted by Matthew Fleming, Tacoma, Washington | Sep 27, 2011

    Agreed! Very good points. Raise postage!

  • Independent Online Media Professional 
Gladstone, Oregon 
Chas Wyatt
    Posted by Chas Wyatt, Gladstone, Oregon | Sep 28, 2011

    I've worked at the U.S.P.S. before, and I hate to break it to you, but, that "junk mail" is their bread and butter. Price those mailers out of the market and the Post Office would be in far worse shape than it already is. Are you ready to embrace a 4-day mail delivery week? Businesses are already up in arms over the mention of axing Saturday mail delivery.

  • Marketing Assistant/Social Media Coordinator 
Gastonia, North Carolina 
Annastacia Tooke
    Posted by Annastacia Tooke, Gastonia, North Carolina | Sep 28, 2011

    Charles some of us already experience that. Some post offices in North Carolina have already gone to a 4 day week, and they have cut their hours too - I wish they would look at when they are cutting them. Only having a post office open from 9-3 during the day isn't going to help business, they should be more flexible.

  • Independent Online Media Professional 
Gladstone, Oregon 
Chas Wyatt
    Posted by Chas Wyatt, Gladstone, Oregon | Sep 28, 2011

    Anastacia, you have embellished my point exactly.

  • Marketing Assistant/Social Media Coordinator 
Gastonia, North Carolina 
Annastacia Tooke
    Posted by Annastacia Tooke, Gastonia, North Carolina | Sep 28, 2011

    I still think that either the post office needs to fix their problems or perhaps everything should just go through Fed Ex or UPS. Using USPS isn't inefficient at best.

  • Independent Online Media Professional 
Gladstone, Oregon 
Chas Wyatt
    Posted by Chas Wyatt, Gladstone, Oregon | Sep 28, 2011

    It may very well come to that; maybe they can get the letter sorting equipment at a government auction at a discount. They probably won't have to deal with DVDs through Netflix, er, I mean Qwikster, because that is also a dying business model.

  • Executive Director 
Norfolk, Virginia 
Jim  Carroll
    Posted by Jim Carroll, Norfolk, Virginia | Sep 28, 2011

    Paul your observations and comments are spot on! In my marketing training classes I use examples of ineffective and absolutely pointless direct mail products. My students cannot believe just how much money is wasted by businesses doing, as you so succinctly put, "...spray and pray..." marketing. Many thanks.

  • Business Marketing  
Boston, Massachusetts 
Paul Costello
    Posted by Paul Costello, Boston, Massachusetts | Sep 28, 2011

    Thanks, Jim and Matt.
    Charles and Annastacia, you raise great points. This is obviously a tongue-in-cheek hypothetical around the negative impact of cheap marketing, vs. an attempt at a viable suggestion to restructure a government entity. Politicians seem (sort of) capable to handle that task.

  • Blogging Coach and Copywriter 
Seattle, Washington 
Judy Dunn
    Posted by Judy Dunn, Seattle, Washington | Sep 29, 2011

    I do not think the answer is privatizing the mail. It will just create an elite system where the richest will be able to afford it and the rest of the folks? Well, maybe, they would get a letter delivered—eventually.

    I think your solution is biased toward direct marketers and your analogy comparing BMWs with jalopies is telling. You seem to want a system that caters to the elite. Whether USPS raises their rates or not, we need a fair system. For all. And, respectfully disagreeing, I don't think that indiscriminately raising rates is the answer.

  • Marketing Assistant/Social Media Coordinator 
Gastonia, North Carolina 
Annastacia Tooke
    Posted by Annastacia Tooke, Gastonia, North Carolina | Sep 29, 2011

    considering that most people use phones, texting, email, social media to inform people of important events I believe regular postal service is dying out. They either need to move with the times or get out. As do people who use the USPS to do their marketing. All my junk mail goes right into the recycle bin to be made into more direct marketing trash, I never open it, I am fairly certain I am not alone. Direct Marketers also need to move with the times and think about more environmentally friendly ways to get their message out because mail is not it.

  • Copywriter and Editor, Specializing in Website Content 
Seattle, Washington 
Russell Smith
    Posted by Russell Smith, Seattle, Washington | Sep 29, 2011

    To have the USPS raise rates in less incremental jumps, and make a reasonable rate jump, say about 10 cents at a time might make more sense at this point in history. I've always been amazed at how much we get from our postal system--a letter from coast to coast for the same price as a letter sent just down the street.

    But I don't think government agencies were ever supposed to turn a profit, and the reasons for the USPS to be much less self-sustaining than ever before are pretty obvious.

  • Independent Online Media Professional 
Gladstone, Oregon 
Chas Wyatt
    Posted by Chas Wyatt, Gladstone, Oregon | Sep 29, 2011

    Just pertaining to the junk mail; whether it is opened, or recycled, the postal service has been paid for it's delivery.

  • writer/director audio/film 
San Francisco, California 
Paul Kyriazi
    Posted by Paul Kyriazi, San Francisco, California | Sep 29, 2011

    Nicely written and informative. I just take all the junk mail for granted, never realizing there is something that can be done about it, giving quality marketers more visablity.Thank you.

  • Mailing Consultant 
Arlington, Texas 
Mike Porter
    Posted by Mike Porter, Arlington, Texas | Sep 29, 2011

    It’s interesting that those who find little use for the Postal Service have such strong opinions about shutting it down completely or believe so firmly in privatization. They often point to profitable delivery companies such as UPS or FedEx as examples of how it’s not difficult to make money delivering letters and packages.

    By law, the US Postal Service is required to deliver to all the addresses in the USA. Private companies don’t have that mandate. Today, if it costs too much for FedEx to drive their truck out to some remote location, guess who the get the package for that “last mile” delivery? The USPS! If private companies were to take over mail delivery, service to rural locations would suffer, the rates would be substantially higher, and location-based mailing would become more complex. More companies would curtail or abandon mail as a communication channel. At some point even the private delivery companies may decide it’s not worth the trouble.

    If you don’t deposit pieces into the mail stream, the Postal Service costs you nothing. Recipients don’t pay for delivery and neither do taxpayers. As Paul has pointed out, mail – even direct mail advertising – can be useful and welcomed if it is targeted and relevant. More mailers are changing their ways. They are mailing fewer pieces, but investing more in data analytics, segmentation, and personalization to elicit better response rates. There are still lots of spray and pray operators, but eventually those will change.

    There are lots of problems with the USPS. They built a system that now has excess capacity, negotiated some labor contracts that make it difficult to effect necessary changes, and are saddled with some big obligations that have resulted in billions of dollars per year flowing to the government and to pre-paid benefit programs for future employees. Every time they propose closing a facility, the local politicians try to block the efforts. No one wants to lose jobs in their district or inconvenience their constituents.

    Clearly there will be changes in the future. Postage increases are probably going to be part of the plan. Organizations that rely on the mail to do business will accept reasonable rate hikes if they will stabilize the system and ensure an accurate and reliable Postal Service in the future. Savvy direct mail marketers such as Paul can offset postage increases by mailing fewer, but more effective pieces. Sure, lower volume will have an effect on labor, equipment, and facilities requirements. But that’s going to happen anyway. Better to have some degree of control I think.

    Consumers who mail five envelopes a month may gripe about higher prices for stamps. But even a huge 20% price increase only costs these low-volume mailers $6.00 a year (zero if they buy Forever stamps before the increase is effective). I wish my annual costs for gasoline, insurance, or electricity only went up by $6.00 a year!

    So higher postage prices? I agree with Paul. As long as they are reasonable, postage increases for direct mail is still a good deal.

  • President 
Hollywood, Florida 
Lois Geller
    Posted by Lois Geller, Hollywood, Florida | Sep 29, 2011

    It seems that it may have been forgotten, but third class mail users (NOT junk mailers) have been supporting the post office for years.

    If we direct marketers had all the answers and targeted our messages correctly all the time, we'd be miracle workers.

    We're not. So we need to test...lists, offers, creatives and often some of those segments don't work. Luckily usually one does great. But the testing process is expensive for clients and if we raise postage, they shy away from testing....and then end up with a poor performing result.

    I wish the USPS could come up with a formula for mass mailers, where they could discount postage for tests, and then charge the usual prices for regular (control) mailings. That way everyone would benefit.

    They had instituted a Discount Program for a few months, and that also had some good results. Social media and email and online efforts work...but a well executed, well targeted mailing will always pull great results. Let's not abandon direct mail, because what will happen to credit cards, catalogers, subscriptions, B to B programs and so many other businesses who depend on it for almost 100% for their revenue base?

  • Lead Strategic Consultant 
Marietta, Georgia 
Christian Lambrecht CMC
    Posted by Christian Lambrecht CMC, Marietta, Georgia | Sep 29, 2011

    This is fundamental. The USPS needs to raise prices to cover costs. We need to repeal laws to allow private companies to compete in this segment. We cannot look upon U.S. mail as a "right". Saturday delivery? Does the general population rely on it? Door to door deliver for under $1.00? Not at USPS wages. Give the managers within the USPS a chance and deregulate this industry!

  • Small Business Consultant 
Franklin, Tennessee 
Alan Bishop
    Posted by Alan Bishop, Franklin, Tennessee | Sep 29, 2011

    I agree with you. The USPS has allowed themselves to believe delivering "junk mail" is their core activity. The reason they are losing money is simply that they offer a junk mailing service that is not profitable.

    If the post service only delivered mail that has a US postage stamp (or frank) they would slim down their service and focus themselves on making this super efficient.

  • Owner/President 
Chicago, Illinois 
Brad Miller
    Posted by Brad Miller, Chicago, Illinois | Sep 29, 2011

    The rate should be raised for bulk mailers, or their discount should be eliminated. Sure, it's their bread and butter, but they can make up the revenue with the higher rates.

    Every day Comcast and AT&T send me junk mail. EVERY DAY. If they had to pay double and I only got crap from the every other day it would be better for me, them, and the planet. I'm not getting cable either way.

    Arguing that encouraging junk mail is good because it supports the USPS is like arguing for more war to support the aerospace industry. We are sick of being bombed with junk mail.

    ...now that I think of it, maybe I will get cable.

  • Practice Advisor for Therapists & Wellness Practitioners 
Portland, Oregon 
Kate  McNulty
    Posted by Kate McNulty, Portland, Oregon | Sep 29, 2011

    The information I have heard is that the post office is a cash cow and that is why "privatization" is being so aggressively touted as a solution.

    I realize this is not a political forum but I cannot let this thread go by without pointing out that the financial instability of USPS is directly related to Bush's mandate that the USPS store up their retirement funds 75 years ( that is not a misprint- 75 years) in advance, meaning that $5 billion has been tucked away in government coffers for safekeeping and the post office can't touch it.

    Of course no business can afford to do this, and so the argument is made that the post office is no longer viable, is going broke, etc etc.

    I don't intend to spark a firestorm of red vs blue controversy here, just sharing the reporting I have heard.

  • Communications Specialist  
Seattle, Washington 
Scott Taylor
    Posted by Scott Taylor, Seattle, Washington | Sep 29, 2011

    Kate - You are absolutely correct. The entire financial problem of the USPS is based on the ridiculous requirement, passed in 2006, to have to fund their 75 year retirement plan in 10 years. Just recently an audit has discovered that they may have overpaid the civil service retirement account $50 billion dollars because of this.

    This is a manufactured crisis. The USPS may not be super efficient but as Mike said above they are not really designed to me. Unlike FedEx and UPS they have to deliver mail first class mail everywhere in the country for the same rate. This is a good thing, but its never going to be particularly efficient.

  • Writer and Musician 
Seattle, Washington 
Paul Carr
    Posted by Paul Carr, Seattle, Washington | Sep 29, 2011

    A SMALL WAY TO FIGHT BACK... I agree with the basic point here—let's make it more expensive for those who clutter up our mailboxes with unsolicited mail. Then, maybe some of them will think about it before sending more. One great way to do this is simply to send back any "Business Reply - Postage paid by recipient" mail you get. If there are identifying codes, clip them off first, leave everything else blank, and send. They pay a premium to get each piece back, and it does them no good at all. I had to open their useless mail. Why shouldn't they have to open mine, particularly when they are now paying for the privilege?

  • Custom Embroidered Logo Wear & Logo Gifts  
Bellevue, Washington 
Evelyn Hou
    Posted by Evelyn Hou, Bellevue, Washington | Sep 30, 2011

    exellent topic and valid points...from both sides!

    Yes USPS should raise rates.

    Recently, I've been using UPS and FedEx for overnight and 2nd day mail, and their rates are HIGH! I much prefer the USPS, but they are out of the way. When I took consideration of the time it takes for me to get the package mailed, I decided to patronize the private companies.

    Mailboxes are disappearing making dropping the mail in the BLUE box impossible...unlike the good old days, walk a few blocks and you'll find one. I currently have POBox that I've used for over 18 years and will consider closing that account to open a UPS store's "personal mail box" because it is too far and inconvenient (20 miles round trip). The POB cost much less than the PMB (6 miles round trip, but actually on the way to work). The medium POB is only $96/year, vs, the small PMB is $20/month.

    There is room for price hike, but at the same time, there should be more post offices locations providing convenience for the public to use the service. Another point is that when I used UPS ground to mail a letter (because I wanted tracking), it cost more than the PRIOITY MAIL, and got there 3 days later than if I had use Priority Mail.

    Yes, there is room to raise the price. Also, on the UPS and FedEx, after pricing cost, there is this "little" FUEL SURCHARGE that is usually about 10% more than the "regular" price...ligitimizing the PRICE HIKE...I paid for it, simply because it was more convenient for me to drop off the package. There is the convenience premium I paid. If the Post Office model after the private companies, and make it more effecient and effective as well as convenient, I believe the USPS will be in better shape.

    I will use USPS over UPS or FedEx if it is convenient.

  • Managing Partner 
Bothell, Washington 
Stanley Schriger
    Posted by Stanley Schriger, Bothell, Washington | Oct 05, 2011

    Most direct mailing clients will opt for presort standard mail. According the DMM 5/12/08 the cost to mail presort std AADC auto was 0.244 per piece. In the most recent DMM 5/12/09 the price per piece is 0.253. Non profit mailers enjoy even better rates in 2008 non-profit std AADC auto was .0146, today it's 0.152. The real killer rate increases were on non-letter size pieces. In 2008 ADC Flats were .0436 in 2009 they were increased 10% to .0486! As stated by others, the USPS knows that direct mail is their bread and butter, so they will keep direct mail rates low on mailers they can efficiently process and handle. Who will be affected by a big raise in rates? Private individuals who mail Christmas cards and small business owners who mail invoices to their clients.

    What the USPS needs to do is relax design standards and mailing specs... direct mail needs to be unique and noticed... unfortunately to get discounted postage rates mail pieces cannot be unique as they require way too much standardization to meet USPS processing specs. And as with most government operations the USPS lack flexibility and create hurdles to work with them rather than make it easier. the USPS has become and adversary rather than a partner to direct mailers.

    Regarding direct mail testing, the list companies should offer better deals for list purchasing. Rates for unlimited use scare clients away from proper testing, targeting and segmenting and many require minimum qty orders that in testing phases are cost prohibitive.

    As for the clutter, I get more unsolicited email and spam than "junk" mail.... so I guess those "smart" direct marketers are doing the same thing bombarding our in-boxes rather than our mailboxes using a cheaper medium. Where do "those" emails go? I would guess in the virtual garbage.

    My conclusion is that direct mail still works targeted and "spray and pray"... those credit card companies must get a ROI on their offers, they're mailed about every day and we toss them, but lots of others must be responding!

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