BY DOMINIQUE SCANLAN
Effective January 21, 2018 the United States Postal Service (USPS) will increase mail and shipping rates across the board. Publishers and marketers who utilize mailing services will be affected by these changes.
The USPS is not alone in its price increase for 2018. According to the Pitney Bowes blog, FedEx and UPS both announced an average shipping rate increase of 4.9 percent. In comparison, the USPS is still a competitive and cost-saving option.
Why the increase in pricing? How will this influence publishers, marketers and businesses? What are the rate changes and what percentage will they increase?
These are all valid questions that we’ll attempt to answer in this blog post.
USPS 2018 Rates
Just about every mail category rate will increase in 2018, including Marketing Mail (formerly known as Standard Mail), First Class Mail Retail, First Class Mail Discount and Periodicals. While many of the pricing changes are minimal, marketers and publishers should analyze the potential impact and plan accordingly. For some high volume mailers, a few cents is a big deal.
Why Did the USPS Increase Rates?
With digital alternatives to the traditional mailing system such as email marketing, electronic newsletters and blog content changing the frequency in which companies utilize direct mail, it’s understandable that the USPS might need to make up some financial ground.
Jeff Berman, Group News Editor at Logistics Management magazine, wrote in an October article, “The USPS reported a net loss for $2.1 billion for the fiscal third quarter, an increase in net loss of $573 million, compared to the same quarter last year.”
The continued decline in profitability combined with other factors contributed to the decision to increase prices this year. On August 10, 2017, the USPS provided additional context related to its financial position and state of the company moving forward.
“The growth in our lower-margin package business is not sufficient to make up for the accelerating mail volume declines,” said Postmaster General and CEO Megan J. Brennan in a statement. “Our financial situation is serious, but solvable. The continuation of aggressive management actions, and legislative and regulatory reform, will return us to financial stability and enable the Postal Service to maintain the long-term affordability of mail, invest in America’s mailing and shipping industry, and best serve the American public.”
What Does This Mean for Publishers?
Publishers particularly rely on mailing networks such as the USPS to distribute print content to subscribers. Although publishing through eBooks and digital channels continues to be popular, audiences have pushed back and demand for print media such as physical books, trade publications and magazines is on the rise.
In a recent Print Media Centr article, columnist and print industry expert Andy Solages stated, “Whether prodigal paperphiles like me are driven by “screen-fatigue” or the sensuous charms of the physical object, if there is a market the products will come.” Solages also noted that, “66 percent of U.S. respondents to a recent Two Sides survey of consumer preferences related to paper and print believe it is important to “switch off” and enjoy printed books and magazines.”
Thus… print, and therefore the need for mail services, is here to stay.
Periodicals will see a 1.84 percent rate increase for domestic pieces and a 1.93 percent increase for international pieces with the majority of large circulation publications paying between 1.0 to 1.9 percent more in total postage than 2017.
The best way to navigate these changes is to become familiar with your publications’ rate type and how it’s distributed. You can also contact your printer or mail service provider for more details.
What Does This Mean for Marketers?
One of the biggest impacts this will have on marketers is a continued focus toward digital options and utilizing direct mail in a more strategic and creative manner. The USPS pricing increase will apply to single-piece letters, postcards, direct mail and standard mailing options overall, making marketing more intentional and methodical than ever.
While digital marketing is faster and cost-effective, implementing strategies through multiple channels will ultimately lead to greater success.
Direct mail marketing remains a vital communications tool. With the abundance of digital marketing channels such as email campaigns and digital advertisements, it makes quality direct mail marketing stand out that much more. Marketers should focus their direct mail campaigns and be more selective, intentional and data driven. To offset the rising USPS mail rates, marketers should narrow down their distribution lists and remove prospects that don’t fit the buyer persona. Marketers should also aim for more creative campaigns and steer clear of mailings that fall in the “junk mail” pile. Applying personalization, variable images and special printing and finishing effects can help set your piece apart.
What Does This Mean for Business Mail in General?
Along with marketers, businesses administrators will become more intentional about which pieces they send through the mail and whether other channels are more cost-effective. This applies to items like purchase invoices, financial statements and business letters. While many companies will analyze how to cut back on these types of mailing costs, the price increases aren’t expected to significantly affect business mail volumes.
The United States Postal Service price changes will certainly influence many industries in 2018, causing businesses to review current practices and reflect on innovative solutions for the future. While mail volumes are unlikely to decline much in the short term, these pricing changes will certainly affect long term strategies and both publishing and marketing trends.
“While marketers and publishers should keep a close eye on how the price increases affect their business, the changes are fairly small, overall,” said Dustin Young, Lead Distribution Specialist at Allen Press. “I’d be surprised to see any significant shifts in mail strategy.”
Have more questions on how these prices will influence your publication or organization, specifically? Contact us for a free consultation and mailing analysis.