Production Optimization: 5 Changes to Make Now!
Direct mail is not dead. It continues to be a valuable fundraising tool. But, in an environment of increasing postage, paper and transportation costs, the big question is: How can we make it more cost effective? Here are some simple strategies to help improve the bottom line:
1. Start with clean data: Do you know where your donor lives? In 2016, nearly 6.6 billion pieces of mail were undeliverable, representing over $20 billion in lost costs (yes, billions!). Undeliverable mail also drives down open and response rates. Keeping a clean data base helps to ensure your message ends up in the right mailbox and not in the trash. Some tools to keep your data clean include NCOA (the USPS processes about 40 million change of addresses yearly), CASS, Address Correction Services (ACS), and private label PCOA services. And one last easy tip: De-dupe your file!
2. Consider all options: Understand what you need, and let the specifications of a project determine the right supplier. Quote and plan with those that are good equipment match for your needs, and the costs will fall into place. Having a stable of trusted partners in all categories will ensure that all your goals are met; one partner cannot do it all!*
Also consider partners who invest in new technology:
-Newer equipment typically has faster run speeds. Your job will be on the floor a shorter number of hours, resulting in cost savings.
-The growing offerings in the Variable Data Printing (VDP) market have been a big area of change in the print industry. Print what you need, when you need it with no plate changes and no need to maintain inventories. Running variable letters may also allow for longer postage streams, resulting in potential postage discounts.
3. Buy in bulk: Mailing the same control month after month? Do you have acknowledgments going out weekly? Here are two options for cost savings:
-Print more at one time and drive down the cost per piece. Instead of printing commonly used components drop by drop, print for multiple drops. As paper costs increase regularly, you may also negate those additional costs.
-Negotiate a contract for multiple projects. Suppliers would much rather have repeat business booked and accounted for in the future and are willing to discount to secure that commitment.
4. Take advantage of USPS promotions: In 2019, the USPS is offering six opportunities for postage discounts. The two easiest to implement right away are:
-Informed Delivery (9/1‒11/30): Offers a 2% discount on presorted mail rates for adding Informed Delivery with a replacement image, ride-along ad, and URL.
-Mobile Shopping (8/1‒12/31): Also offers a 2% discount on presorted mail rates by including a QR code or equivalent along with directional copy that takes a donor to a mobile optimized web page for donations.
For information on all program rules, registration and timing visit: www.usps.com/business/promotions-incentives.htm.
5. Optimize postage discounts (it’s a big line item in your budget): The USPS offers business mailers several tiered discounts based on volumes for presorted and barcoded mail going to specific zip codes (or carrier routes). There are three tools available to tap into these discounts, and these strategies can be combined depending on the size of mailing.
-Commingle: If a mailing is smaller or the zip codes have a wide footprint, getting to those top discounts is manageable using commingling. This process takes multiple mailings and combines them to increase the number of pieces going to any one zip code, thus qualifying for better rates. Bonus tip: Shop around for these services; commingling is negotiable.
-Drop Ship: If a mailing has a tight zip-code sortation with complete trays of mail, drop shipping directly to the NDC/SCF (postal sorting centers that are close to the final delivery point) may be your best option. The postal discount will cover the freight, and your envelope will get in the mailbox quicker than entering locally at the letter shop.
-Copalletize: This option is a hybrid of commingling and drop shipping. Combine your mail trays designated to drop ship with other mailers going to the same NDC/SCF (it’s comingling on a palette), and your pieces may enter the mail stream even closer to the final mail box, offering a deeper discount.
Ask your letter shop for a postage analysis to determine the best tactics to optimize postage discounts.
Need more help? The CDR production team has the expertise to navigate data and postage complexities, and a database of vendor partners to help meet your budget needs. Feel free to reach out and let us know how we can help!