On October 9, 2020, the United States Postal Service (USPS) filed direct mail postage rate increases with the Postal Regulatory Commission. They are requesting a postage increase to go into effect on January 24, 2021. So what does that mean for you?
The biggest takeaway from these rate changes, outlined below, is that presorted First-Class Mail and flats are growing more and more expensive. Flats do have better ROI than letter size pieces — even at increased postage — so make sure you take that into consideration before you choose to no longer send flat size mail.
- 1-oz. stamped letter size pieces will remain $0.55 each
- 1-oz. metered letter size will increase to $0.51 each
- 1-oz. flats size pieces will remain at $1.00 each
- Presorted letters will remain the same at $0.45 each
- Presorted cards will increase to $0.285
- Presorted flats will increase to $0.774
- Mixed AADC Letters will increase to $0.304
- Mixed AADC Flats will increase to $0.726
- Mixed AADC Letters will increase to $0.183
- Mixed AADC Flats will increase to $0.532
The PRC will review the proposed new rates and make a decision this November. We do not expect them to make any changes to the proposed rates. If you mail to international addresses, you should expect big postage increases for 2021. Those rates have not been filed yet, but we expect international packages to have the largest rate hike.
USPS is offering six promotional discounts again in 2021. They are the Earned Value Reply Mail, Emerging and Advanced Technology, Informed Delivery, Mobile Shopping, Personalized Color Transpromo, and Tactile, Sensory, and Interactive Engagement. All six were offered in 2020. On average these promos offer a 2% postage savings, so you should consider taking advantage.
Keeping Direct Mail Costs Down
Even though direct mail postage rates are rising, you can still get great results from the channel. Consumers like and respond to direct mail. Thankfully, there are many things you can do to keep your costs under control. Here are the top 3:
- List Hygiene: Make sure to clean your list of bad addresses, use a move update service like NCOA to make sure you have current addresses, and suppress deceased people.
- Design: Keep postal regulations in mind when you design so that you don’t get stuck paying extra postage. Your mail service provider can check your design before you print.
- Targeting: You will also want to segment your list to select the right targets for your message. Sending the right offer to the right person is key to increasing your response rates.
Don’t let the postage rate increases scare you away from this important marketing channel. Direct mail has the highest ROI of all marketing channels when done correctly. On average the postage rates increased by less than a penny per piece, so they are not going to drastically increase your overall direct mail budgets, but it is important to account for the additional postage funds you will need next year.
It’s time to get creative and send direct mail that is interesting, as well as cost effective. Are you ready to get started?