As USPS rate hikes continue to push mailing costs higher, businesses that rely on direct mail, like catalogs, face increasing pressure to control expenses. However, smarter solutions like postal optimization can help cut through these challenges.
Enru’s High-Density Co-Mail and other postal optimization services offer significant savings by efficiently managing the mail process. In this article, we’ll explore how marketers can maximize their budgets through postal optimization while still achieving the strong returns that direct mail provides.
Understanding Postal Optimization and How It Works
Postal optimization is the process of streamlining mailings to reduce costs, improve delivery speed, and qualify for discounts. It involves a range of strategies, like pooling, designed to make mailing operations more efficient, both for businesses and for USPS. By taking on tasks that would otherwise fall on USPS, mailers can reduce the handling and sorting steps required by postal workers, leading to significant cost savings.
One of the key components of postal optimization is mail consolidation. This involves combining mailings from multiple sources or clients to create larger batches. These larger, presorted batches qualify for workshare discounts, where businesses essentially receive a reduced postage rate by doing more of the work upfront. USPS benefits from receiving mail that’s already organized and ready for faster processing, and businesses save money.
Another critical part of postal optimization is presorting. Mail is sorted by destination as far down the chain as possible, by zip codes with additional digits that identify specific routes or neighborhoods. The more accurate the sorting, the less processing is needed, allowing USPS to deliver mail more quickly and at a lower cost to the sender.
Lastly, postal optimization includes scheduling mail drop-offs at strategic points in the USPS network. Instead of simply mailing from a central location, optimized mailings might be dropped off at regional or local distribution centers closer to the final destination. This minimizes the distance USPS has to cover, further reducing handling costs.
Through these strategies — consolidation, presorting, and strategic drop-offs — postal optimization allows businesses to cut down on their mailing costs while maintaining or even improving the efficiency and reliability of delivery.
Rising USPS Rates and Their Impact on Marketers
USPS rate hikes have become a regular occurrence, with the increase in July 2024 being the latest in a series of biannual price changes. These hikes have affected all forms of marketing mail, from letters to flats, with notable increases in Marketing Mail Flats, which saw a jump of over 11% in July.
For marketers, this creates a growing financial burden. Postage is a substantial cost factor in direct mail campaigns, and with USPS raising rates every six months, these costs are not only rising — they’re likely to continue doing so. The impact on marketing budgets is significant: each increase chips away at potential ROI, making it more expensive to reach customers through traditional mailing strategies like catalogs.
This trend of rising postage costs forces businesses to rethink how they manage their direct mail strategies. Should they reduce direct mailings? Cut out expensive catalogs? Try out different catalog formats to save money? As businesses strive to find ways to mitigate increased expenses, Enru’s postal optimization services become invaluable. By leveraging the power of consolidation and workshare discounts, businesses can reduce their postage costs even in the face of more rate hikes.
Balancing Costs and Return in Your ROI Strategy
When calculating ROI, it’s essential to remember that it’s not just about the investment or cost — it’s also about the return. In marketing, particularly with direct mail, the investment includes production and postage costs, which, as we’ve said, have been increasing. But focusing solely on reducing costs isn’t always the best approach. You also have to pay attention to the returns side of the equation.
For instance, direct mail, including catalogs, has been proven to offer a higher ROI compared to other marketing channels, as we’ve discussed in past blogs. Print marketing creates a lasting impression: 72% of Americans enjoy browsing catalogs, and 65% are more likely to remember a brand after receiving one — far higher than the recall rates for digital ads. Furthermore, direct mail campaigns tend to have a higher engagement rate, driving more purchases and providing a stronger brand connection.
So while direct mail may require a higher investment upfront, the returns can more than justify the cost. When analyzing ROI, businesses need to balance both sides of the equation: the return (revenue generated) and the investment (money spent). As postal rates rise, it may seem tempting to cut back on direct mail, but doing so could mean losing out on the superior returns it offers.
How Enru’s Postal Optimization Services Help Control Costs
Enru’s postal optimization services, such as High-Density Co-Mail pools, are designed specifically to help businesses manage rising postal costs without sacrificing the effectiveness of their marketing campaigns. Enru consolidates mailings from different clients, sorts them based on destination, and optimizes each step of the delivery process. By doing this, we take advantage of USPS workshare discounts, to significantly reduce the cost per piece of mail.
For marketers, this means that even as USPS rates rise, the costs associated with direct mail stay under control. Our approach ensures that businesses can still use high-impact marketing channels like catalogs and other direct mail formats while managing the “investment” side of the ROI equation.
What sets Enru apart is our use of cutting-edge technology. Proprietary algorithms analyze terabytes of mailing data to determine the best possible pools for each mail batch. This allows businesses to send their mailings further down the USPS distribution chain before they even enter the postal system. By skipping multiple postal processing steps, businesses qualify for larger discounts, which makes direct mail campaigns more affordable.
The result is a double benefit for businesses. Not only do they save on postage, but they also keep access to the high-return potential of direct mail, ensuring that their overall marketing strategy remains cost-effective. With postal optimization by Enru, businesses can strike the perfect balance between investment and return, maximizing their marketing budget even in the face of postal rate increases.
Take Control of Your Marketing Budget with Postal Optimization
Maximizing your marketing budget doesn’t mean cutting corners — it means finding smarter, more efficient ways to get the best results. Enru’s postal optimization services are designed to help businesses navigate rising costs while continuing to deliver impactful marketing campaigns. By consolidating your mail through Enru’s High-Density Co-Mail Optimization Program, you can significantly reduce mailing costs and boost your campaign’s ROI.
As postage rates continue to rise, businesses need solutions that help them stay competitive without sacrificing the quality of their marketing efforts. Enru’s services offer exactly that: a cost-effective way to benefit from the high returns that direct mail provides. Ready to optimize your direct mail strategy? Let Enru guide you through the process.
