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Increased Postage Rates, How Does that Impact Marketing Budgets?

Marketing spending levels have increased during 2022, however, in relation to revenue: they are comparable to pre-pandemic proportions according to recent data generated by Gartner 2022 CMO Spend and Strategy Survey.

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Compu-Mail

Posted

November 22, 2022

Efficient Communication Network

In a previous blog we discussed the Postal Service Reform Act of 2022 and how it impacted The United States Postal Service (USPS).

The postal service is one of the oldest federal agencies.  To forge a nation, the founders needed an efficient communications network.  With the changes in obligations and the potential for additional ways to increase their revenue instituted by the Postal Service Reform Act of 2022, the United States Postal Service can focus once again on its primary function: delivering the nation’s mail!

The USPS has become an essential part of American lives; we have come to reply on the ability to send and receive mail in both our personal and business aspects.  However, did you know that the USPS receives no tax funding to support its operating expenses?  They rely solely on the sale of postage, products, and services they offer.

In July 2022, the Postal Regulatory Commission (PRC) increased the postage rate for a First-Class Mail Forever stamp to 60 cents, previously the cost was 58 cents.

Additional increases for other pieces were seen too: for each additional ounce for a single-piece letter is now 24 cents, the one-ounce price for metered mail is now 57 cents, and a postcard stamp is now 44 cents.

So why the increased cost of postage1?  We are accustomed to seeing temporary price adjustments for key package products during the peak holiday season to help offset the extra handling costs associated with ensuring successful delivery this time of year. However, rate increases overall, simply put, are a direct reflection of inflation and an increase in operating expenses that many industries have faced as we emerged from the COVID-19 Pandemic. These increases are not a thing of the past. The rumors of a looming postal rate increase have been solidified; we can expect to see ground shipments increase by as much as 6.9% as of January 22, 2023.  While the new Forever stamp price is expected to be 63 cents.  

Is Direct Mail Worth the Investment?

While many digital marketers would lead you to believe that this is a lost art, direct mail marketing remains one of the most effective advertising strategies to target your customer demographic and increase traffic for your business. In fact, coming out of the pandemic 70% of consumers have reported they prefer to receive paper mail citing a sense of digital fatigue, while 30% continue to prefer a digital option. Of course, offering a multichannel approach would strengthen your reach and would increase your return on investment. A simple way to do this is to add an Informed Delivery campaign to the direct mail campaign.  Furthermore, 85% of consumers will read the direct mail that is received; 72% the same day it is delivered, while 63% will read the direct mail that is received within 2 or more days.  That sounds like a solid investment!  If you want to further increase these numbers, be sure to work with a team to create an eye-catching piece that is personalized for the intended recipient.  No word is more important than a person’s name - capitalize on it!  Finally, 51% of consumers will share direct mail that they receive with others, so consider ways to make your piece appealing to your intended target audiences.

Our Compu-Mail team is backed by over 40 years of expertise and experience to support you from the initial design concept to the final finished product.  In addition, we have developed a strong partnership with the United States Postal Service to ensure that your business mailings capitalize on various discounts and are delivered in a timely and efficient manner to minimize your investment to maximize your opportunities.  Contact us today to explore options to address the needs of your company.

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