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Postal Promotions: Mailers Discounting Mobile

March 2013 By Erik Cagle, senior editor
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You've got to love Patrick Donahoe. The postmaster general of the U.S. Postal Service (USPS) is a man of action, taking off his gloves and using the bare-knuckle approach to get Congress to enact meaningful, sustainable postal reform. A prime example was the announcement last month that, come August, Saturday mail delivery will cease.

Here's the bottom line: Donahoe gets it. Mr. ZIP defaulted on a pair of payments to the U.S. Treasury last year and, while the man won't be repossessing ZIPPY's mail truck, going $11 BILLION in the red is enough to leave anyone's stomach in knots. Donahoe can't wait around on a Congress that has turned crafting last-minute, under-the-gun legislation into an art form. He needed to act.

Dumping Saturday mail delivery was one of the few options at Donahoe's disposal, and it will save an estimated $3 billion a year. But, when you cut service to save money, it reduces an entity's value proposition, at least in the eyes of customers. Despite its own challenges, the USPS is mindful of the tasks facing the mailing community and its struggles to maintain profitability when using the mail stream as a marketing channel.

Last fall, the USPS announced its 2013 Mailing Service Promotions calendar. Much to the delight of on-the-go consumers, a number of the promotions incorporate discounts for the use of mobile-based technologies. Tom Foti, manager of direct mail and periodicals for the USPS, provided some insight for each promotion, with an extended look at the mobile-based offerings.

Mobile coupon/click-to-call (March 1-April 30). This two-pronged offering focuses on encouraging mailers of hard-copy coupons to integrate them with mobile platforms for redemption. The second aspect rewards promotions that provide click-to-call functionality. Each program provides a 2 percent discount for mailers. Registration runs through April 30. According to Foti, insurance agencies are prime candidates for click-to-call promotions.

"Their main objective is to get someone on the line to speak to one of their agents," Foti notes. "When you scan a mailer with a barcode, it automatically gets you an agent or the click-to-call will show up on your phone."

Earned value reply mail (April 1-June 30). First-Class Mail Business Reply (BRM) and Courtesy Reply (CRM) pieces scanned in the postal network will yield a 2 cent per piece postage credit. Registration for reply mail expires at the end of this month.

Emerging technologies, picture permit, product samples (Aug. 1-Sept. 30). The 2 percent emerging technologies promotion is based on the successes of past mobile barcode promotions, while extolling how interactive technologies such as Augmented Reality, Near-Field Communication and authentication can be integrated with traditional direct mail strategies to embolden the value of the printed piece. Registration is June 15-Sept. 30.

"What we've found in our previous promotions is that the use of emerging technologies has been accelerated by the discounts," Foti remarks. "In general, it makes interaction more valuable, more robust and more engaging for the consumer. By doing this for two months, [the discount] will help mailers realize its value."

The picture permit offering is aimed at the use of picture permit imprint indicia, which can bolster the mail piece's value as a marketing tool. The fee of 1 cent per piece will be waived for First-Class Mail letters and cards, while the 2 cents fee will be waived for Standard Mail letters and cards. Registration is June 1-Sept. 30.

"We're throwing this out there for customers to tell us how they would use this for authentication," he says. "These aren't for everyone, but they're far reaching enough. We've found that when you get the industry thinking about it, down the road (mailers) will begin to test out the concept."

Keeping it Simple

The product samples promotion provides mailers a 5 percent up-front postage discount on qualifying mail that contains said samples. The promo is designed to raise awareness of the new "Simple Samples" pricing in Standard Mail that went to effect in January. Registration is May 1-Sept. 30.

However, it's not only Mr. ZIP who's helping mailers and marketers cut down on their postage costs. The nation's leading direct mail printers are also doubling down on their efforts to maintain the mail stream as the channel of choice for marketers. Among them is Japs-Olson of St. Louis Park, MN, where President Michael Murphy takes the partnership path with mail clients to reduce delivery costs. The printer constantly analyzes client mailing patterns and suggests either a front end optimization or the printer's preferred workflow of commingling.

"Before we produce the mail, we use a combination of data analytics and optimization software to merge and combine our clients' mail distribution profiles into a single production stream," he says. "This gives our customers the ability to aggregate their volume for the lowest postage costs.

"We also offer our clients the ability to commingle their mail pieces into a larger distribution pool for optimized postage and transportation costs. This process is preferred because there is more opportunity to save additional money through co-palletization," Murphy adds.

Commingling programs provide a popular path toward postal savings, and it is a major selling point for IWCO Direct, based in Chanhassen, MN. Jim Andersen, CEO of IWCO Direct, notes that in addition to a high-density, regional commingling program that leverages the printer's geographic footprint, mailing clients can also benefit from IWCO's proprietary logistics program, which delivers more than 85 percent of Standard Mail to the destination Sectional Center Facility (SCF), a catalyst for deeper discounts.

"We always conduct a thorough review of mail piece design to ensure every piece qualifies for automation letter rates," he says. "This review is also an educational opportunity. We always offer suggestions for revisions to the design, if what we receive from our clients or their agency would not qualify for every discount available."

Andersen points out that the printer is instrumental in mail piece design to ensure the piece is efficient to produce and that it meets all postal regulations. The postal guidance provided includes compliance with all automation requirements for letter-sized mail including use of full-service Intelligent Mail barcodes (IMb).

"We have a robust process in place to review mail piece layout, including indicia format/content, use of ancillary service endorsements, correct placement of return addresses and meeting barcode clearance requirements," he says. "One of the most potentially confusing issues for clients is compliance with new folded self-mailer regulations, including closures, fold configuration and paper stocks. We provide both education about new regulations and a review of their artwork to ensure compliance."

IWCO Direct is actively involved with many clients who use geographic targeting to provide guidance on list selection techniques to drive maximum qualification for walk-sequence carrier route rates. The printer also educates and advises clients on demographic targeting on the use of regional consolidation and commingling to maximize mail in five-digit trays delivered to SCFs.

In addition to qualifying clients for automation rates, SG360°, a Segerdahl company, in Wheeling, IL, uses a sophisticated suite of software programs to analyze and dissect client mailing data in order to ascertain which processes will yield the maximum postage savings. Mike Buttita, director of postal affairs for SG360°, says the results are then matched with various equipment, including barcode sorters, designed to streamline the finishing process and facilitate entry optimization through SG360° logistics services.

"We work on a consultative basis with each one of our customers and use subject matter experts supported by each of our business pillars," Buttita adds. "We are designed to turn a thought into a result. And we do it across all media, infusing technology with the printed piece. It's not good enough for SG360° to just consult; our mission is to become the trusted advisor. Our customers look to us to be their second set of eyes, realizing that the variables are many and the liabilities are great."

One of the cornerstones of SG360°'s value proposition for direct marketers is SG360º's first brand pillar, BRANDIRECTions. According to Luke Hefron, vice president of integrated marketing, it provides analytics to guide and optimize direct marketing solutions. EMPIRICALtesting bridges the gap between traditional research and consumer insights and enables marketers to bring a better product to the consumer's mail box, and reap savings on the back end courtesy of higher response rates.

Clients have their control piece—a campaign mailer that has performed well in the past—rated against four alternatives created by SG360° or their agency, via an online consumer panel of up to 3,000 individuals, to test effectiveness.

"The panelists repond online to all five pieces, answer questions and comment about what they liked, what appealed to them and what they didn't like," Hefron points out. If you make qualified decisions based on analytical findings prior to printing, you're going to save some money. EMPIRICALtesting provides a scientific means to discover the highest probability of consumers responding to their offers." PI



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