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How USPS Could Impact Your Budget in 2015 - 2/24/2015 -

How USPS Could Impact Your Budget in 2015

Association publishers are hearing the buzz about a potential postal rate increase — could intelligent mail provide some relief?

By Andrew Shackelford

By now you’ve likely heard about two of the arguably most important topics related to United States Postal Service: the potential postal rate increase and intelligent mail. Here I’ll describe each issue, what they mean for associations, and what you can do to own the issue.

Potential Postal Rate Increase — Summary
In mid-January, the USPS announced that it would be seeking a 1.9 percent postage rate increase effective April 26, 2015. The USPS is asking for this rate increase on top of the exigent rate increase from 2014. However, the exigent rate increase of about 4.5 percent is set to expire this summer. What the USPS is counting on is a favorable ruling to their court case to make the exigent rate increase permanent. The case is scheduled to be heard in March.

Potential Postal Rate Increase — What it Means for Associations
There are several possible outcomes to this proposal. We can pretty much rule out that rates will decrease when it’s all said and done. If the exigent rate increase becomes permanent, rates should increase by 1.9 percent in April. If the exigent rate increase expires, the USPS can withdraw the proposed rate increase for April and hold off until fall to get a much larger increase.

Another possible outcome is that the USPS could raise postage rates in April and then very quickly raise rates a second time in the summer. In the end, the USPS will likely work a strategy that increases postage rates about 1.9 percent before the end of 2015. How they get it done depends on what happens to the pending rate case.

Finally, there is one more possible scenario. Congress could enact postal reform and change the rules on rate setting once more. If that were to happen, the USPS will pretty much have a free hand to set rates as it sees fit. However, chances of congressional intervention are extremely slim.

Potential Postal Rate Increase — How to Own It

1.  Increase your postal budget. I know, easier said than done — but certainly worth investigating. For example, if your magazine’s monthly circulation is 20,000 and your presort standard rate is an average of 41 cents for each magazine, an extra 1.9 percent translates into $2,025 more per year in postage. Speak with your printer or mailer to calculate how the increase might impact your budget.

2.  Decrease your postal rate by learning whether you may qualify for periodicals mail classification. If your advertising is less than 50 percent of your total content and you mail four times a year, you should look into the savings you’d receive by attaining periodicals mail classification. Check with your printer or mailer to see if they will assist you in the investigation.

3. Offset a rate increase with lower production costs. One of the most overlooked techniques that offers a significant budgetary impact is altering your magazine’s page count. Find out at which signature configuration your printer is most cost effective, and stick with multiples and subsets of that page count. Another large-impact production savings to consider is a self-cover magazine format. This strategy utilizes the same paper stock on the cover as is used in the text.

Intelligent Mail — What it is
Once you drop your mail into the general mail stream, it’s as though you’ve dropped your mail into a black abyss. You lose sight of your mailing piece, and you have to trust that the USPS will deliver it. The only feedback you receive is from the recipient. And if the piece is late or damaged, chances are that feedback won’t always be positive.

Intelligent mail is an umbrella term describing services available from the USPS. The cornerstone of intelligent mail is the intelligent mail barcode, which packs greater data capacity into a barcode. Each barcode contains information for the USPS on what the mail piece is, how it is processed, and provides a unique identity to every mail piece.

Intelligent Mail — What it Means for Associations

Intelligent mail can help associations lower postage, improve surface visibility for mail pieces, and provide better access to address hygiene data. However, the key to the future of intelligent mail is two-fold.

First, service providers will develop new services using the information that can be harvested from current intelligent mail data.  Whether it is surface visibility or improving address quality, third-party vendors will find ways to take the outputs available and package them to provide fingertip access to the mail owners. I fully expect to see apps for smartphones that utilize data produced by intelligent mail mailings. Because of the value of the data, the only limit to its application is imagination.

Second, the USPS and mailers have not fully tapped into the potential of intelligent mail. The very nature of the data-rich intelligent mail barcode will eventually give rise to new ideas about how to capture valuable data from mail delivery. Imagine combining mail delivery results for specific kinds of mail with information about the general delivery destination. That information could be channeled back to the mailer so that future mailings are tailored to fit the audience. 

Intelligent Mail — How to Own It
Check with your printer or mailer about what intelligent mail services they provide. In the near future, keep an eye out in your favorite marketing magazines and blogs for third-party services and products that are used in conjunction with intelligent mail. Even though intelligent mail has been maturing for several years now, the best is yet to come.   

Andrew Shackelford is a sales representative for Walsworth printing company and a member of the Association Media & Publishing Content Creation Committee.


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