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May 2007 Postal Rate Increases

Quality Education Data (QED)

May 2007 postal rate increases will cause mailers to be more precise in their targeting and evaluate their creative.

On March 19, 2007 the Governors of the United States Postal Service approved most recommendations made by the Postal Regulatory Commission (PRC) with most new rates going into effect May 14, 2007. Overall, the rates were approved at a slightly lower rate than the Postal Service had requested. The impact of the rate increases is uneven with the letter-shaped mail rate approved at a lower rate than requested, but the flat-shaped mail rate approved at a rate that was higher, and in some cases significantly higher than requested.

The new prices reflect the differences in the costs of handling letters, flats (large envelopes), and packages. There has always been a difference in cost between letter-shaped and flat-shaped mail, but the price difference did not fully cover the actual cost difference. Moving forward, however, this discrepancy will be rectified with the new flat-shaped rate increase.

The Governors, however, requested reconsideration of the PRC’s rate recommendations for some mail classes including Standard Mail flats (catalogs). The Governors are concerned that price increases recommended by the PRC may impose an unnecessary degree of "rate shock" on the catalog industry. The recommended increase for some catalog mailers is as much as 40 percent, which is more than double what the Postal Service proposed. While the Governors have asked the PRC to reconsider these rates, they will nonetheless go into effect May 14, 2007 along with the rest of the postal increases pending reconsideration. Many organizations, led by the Direct Marketing Association, have requested that the PRC make a decision on the reconsiderations prior to the new rates being implemented to avoid confusion and the possibility of a double rate change.

Table 1 - A Sample Of The New Postal Rates

Mail Class

Postal Rates as of May 14, 2007

First Class $ 0.41

Postcard $ 0.26

Standard Mail Letter (Enhanced Carrier Route, Basic) $ 0.226

Standard Mail Flats (Enhanced Carrier Route, Basic, 3.3 oz or more) $ 0.621

Standard Mail Non-Profit (Enhanced Carrier Route, Basic)$ 0.157

Parcel Post, 1-pound package $ 4.50

Postal Regulations, April 2007

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Implementation of the new prices for Periodicals (magazines and newspapers) is delayed until July 15, 2007 to allow time for the publishing industry to adjust to the complexity of the rate structure for periodicals. There will be 55 different prices based on container type, entry point, and level of sorting for periodicals.

New Cass Certification Regulations

In conjunction with the rate increase, mailers also need to be aware of new regulations that are going into effect August 1, 2007, which may have an equal impact on mailings. The new regulations for CASS Certification require that the primary address be validated using the USPS DPV™ file and that LACSLink™ be used to convert rural route addresses to street addresses. It is anticipated that the new regulations will cause a 1-3% dip in the CASS coding, which will increase postage for the mail pieces not certified. However, increasing the deliverability and quality of lists improves contact with customers. In addition, these software enhancements will help reduce the costs associated with undeliverable-as-addressed (UAA) mail.

Maximizing Your Postage Dollars

Postage has always been a significant portion of any mailer’s budget. The pending rate increases will make it even more important for mailers to ensure they’re sending mail to interested, qualified recipients. QED can help alleviate the burden of the new postal rates and regulations in several ways. QED can help with our highly targeted lists, Database Services, and Creative Services.

Consider using QED’s Customer Profiling services to determine the common characteristics of your best customers and then select those characteristics and demographics from QED’s National Education Database™. For instance, if after completing the Customer Profile it’s discovered that districts with more than 500 students make up the largest percentage of your sales, you can concentrate your marketing efforts on prospects in districts with similar demographics. A Customer Profile can also tell you the characteristics of your poorest performing segments so you can reconsider your marketing strategies in those areas in order to get the highest ROI from your marketing dollars.

QED’s Database Services can also help you save money with our list cleaning and file hygiene services. In addition to merge-purge to ensure you don’t mail to the multiple pieces to one person, we’ll CASS-certify mailing addresses, identify closed schools and inform you of personnel no longer at an institution. We also offer address standardization, address verification, zip code correction, and appending ZIP+4, delivery point barcodes and carrier route codes – all to help you achieve the best postal rates possible.

As the cost per marketing piece rises ensuring that your direct mail campaigns and catalogs are delivering a powerful message that drives response is even more critical. Test your marketing creative, copy and offers using QED’s Educator Insight Panel. This online panel of pre-recruited educators across the country is on-call to evaluate your marketing materials and provide feedback. In a short amount of time you can learn which offer is more appealing, which catalog layout is more effective, or which direct mail design is more eye-catching. With the data collected from your target audience you can fine tune your creative and feel confident about the design, content and offer you’re mailing.

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In addition to the Educator Insight Panel, QED’s Creative Services team is extremely knowledgeable about postal requirements and methods for creating eye-catching, response-driven pieces that still mail at the lower letter rates. QED’s Creative Services can also help you co-mingle your letter sized mailings with other mailers in order to take advantage of competitive volume postal discounts.

Supplementing your direct mail with e-mail marketing is another great way to get your message out to teachers that will help you save dramatically on postage. You can use e-mail to drive teachers to your web site either to purchase directly online if that’s applicable to your company or even download a PDF of your product catalog. If you’re scaling back on the number of people you mail your catalog to, use e-mail to reach a wider audience and drive them to your web site to request your catalog. QED offers a turnkey E-mail Marketing Service that provides prospect e-mail addresses, e-mail design, html programming, and response tracking.

For more information on these services and how QED can help you maximize your marketing dollars in these times of increasing postal rates, call your Education Marketing Specialist at 800.525.5811 or visit www.QEDdata.com

For more information on the postal rate increases and new regulations, visit:

Postal Rates: http://pe.usps.com/RateCase2007/DMM300_PDF/RatesAndFees.pdf

CASS Certification Regulations: http://ribbs.usps.gov/files/cass/CASS%20Cert%20Req%20MAILERS%20guide.pdf