Posts Tagged Postage Rate
Tips to Manage Postage Rate Increase
Now that the Postal Service has raised rates again (this is the largest rate hike in the past 11 years), it seems like a good time to review steps you can take to help manage your postage costs.
- Take advantage of a local mailhouse or presort vendor. Presorting your mail lets you take advantage of reduced postage rates. There are many ways you can work with a vendor; they can manage your data, print your mailpiece and mail it for you or perhaps all you need is a daily pick up of your already prepared mail. Either way, savings are there for you.
- Keep a clean, healthy database. Make sure all of your addresses are complete, correct and updated. When you receive Undeliverable As Addressed mail back from USPS make sure you update your data accordingly. No sense in mailing people who have moved or are deceased.
- Dedupe your data. If your data includes multiple contacts with similar sounding titles within a company, can you mail to just one of those people? Are you seeing duplicates such as John Sample and John Q Sample at the same address? Check for duplicates both by name and address.
- Personalize and target your mailing. Studies have shown that the more personalized and targeted your offer is, the greater response you will receive. Build and manage data such as last purchase, date of last service or purchase, geographic area or household income. The list of ways to segment and create relevant messages/offers is endless.
- Use multi–channel marketing. Follow up your mailed promotion with email. Try to keep the same look and feel of your mailpiece. Include a link to your website, other marketing page or survey if appropriate. You can use a QR code or pURL on your mailpiece to drive recipients to your website.
Postage rate increases are uncomfortable for mailers. The USPS points out that the increases over the past few years have kept pace with inflation. The change is intended to generate $2 billion in annual revenue for the Postal Service.
As a reminder, below are the new full pay, retail rates.
- 1 ounce First Class letter – $0.49
- Each additional ounce $0.21
- Postcards $0.34
- 1 ounce letters to all International destinations $1.15
Increased 2014 Postage Rates – Effective January 26, 2014
As per a news release on September 25, 2013 prices for most Postal Service mailing products and services will change on January 26, 2014. This includes First Class Mail, Standard Mail, Periodicals, Package Services and Extra Services.
The proposed changes are intended to generate $2 billion in incremental annual revenue for the Postal Service.
Highlights of the new single-piece First-Class Mail pricing, effective Jan. 26, 2014 include:
- Letters (1 oz.) — 3-cent increase to 49 cents
- Letters additional ounces — 1-cent increase to 21 cents
- Letters to all international destinations (1 oz.) — $1.15
- Postcards — 1-cent increase to 34 cents
Stamp prices have stayed consistent with the average annual rate of inflation of 4.2 percent since the Postal Service was formed in 1971.
Pricing for Standard Mail, Periodicals, Package Services and Extra Services also will be adjusted.
In a letter from Board of Governors Chairman Mickey Barnett described the “precarious financial condition” of the Postal Service and the “uncertain path toward enactment of postal reform legislation” as primary reasons for seeking price changes above the CPI increase. He also indicated that the price adjustment above the CPI increase is necessary in order to ensure that the Postal Service will be able to maintain and continue the development of postal services of the type and quality which America needs.
“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” said Barnett in the letter. “However, if these financial challenges were alleviated by the timely enactment of laws that close a $20 billion budget gap, the Postal Service would reconsider its pricing strategy. We are encouraged by the recent introduction of comprehensive postal reform legislation in Congress, and despite an uncertain legislative process, we are hopeful that legislation can be enacted this year.”
Except in exceptional or extraordinary circumstances, postage price increases are capped at the rate of inflation as measured by the CPI-U. The Postal Service is filing a price increase above CPI-U due to extraordinary and exceptional circumstances which have contributed to continued financial losses. The Postal Service recorded a $15.9 billion net loss last fiscal year and expects to record a loss of roughly $6 billion in the current fiscal year, and has an intolerably low level of available liquidity even after defaulting on its obligation to make prefunding payments for retiree health benefits.
If your business is not already using a presort vendor, now is the time to look into that service. With ever increasing postage rates, why not take advantage of discounted rates presort houses are able to offer you?