The Mark Lee Group

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How To Survive the 2007 Postage Increases:
Nine Tips for Smaller Catalogers
As this is written (March, 2007), postage is set to rise 20% or more for most specialty catalogers. It’s vitally important to find ways to offset this extra cost -- few mailers will be able to simply pass it along to their customers. Here are some suggestions and recommendations for weathering this tough environment:2007 Postage Rates for Catalogs
  1. Be Ready to Scale Back Circulation
    Recognize that you may need to cut some catalog circulation from whatever plan you would otherwise have had – especially within prospect lists. When you use the new postage figures in your economic analysis, lists or segments that were at the edge of acceptability simply won’t survive.
  2. Look Online for More Prospects
    As the cost of customer prospecting through the mail continues to rise, consider shifting more of your prospecting to the internet. Look first to paid search (pay-per-click) on Google, Yahoo and MSN. If you haven’t tested literally thousands of keywords, now’s the time. Pay attention to the basics of search engine optimization and landing page relevancy, too – this will lower your cost per new name. Be sure to monitor internet-generated customers separately; in our experience, they are less expensive to acquire but often have a lower long-term value.
  3. Co-Mail Like Crazy
    Work with your printer to get as much of your circulation as possible into co-mailing pools. To succeed in this, you may need to be a bit of a squeaky wheel. You may also have to adjust your book’s trim size for compatibility, and it helps to be a little flexible about mail dates (but don’t jeopardize response by moving catalog drops away from their peak season).
  4. Email Smarter
    Let emails pick up some of the slack in contacting customers. Take the trouble to make each email more relevant, and take some time to learn how to avoid being blocked by spam filters and ISPs. Redouble efforts to capture a current email address from each customer and website visitor (hint: make it worthwhile to them).
  5. Page Count vs. Circulation
    As before, you can add pages without increasing your postage bill until you hit 3.3 ounces (roughly 48 - 56 pages) – though the extra pages will add to your Destination Entry freight bill. Naturally, you must pay for the additional page design and production, pre-press, paper, and printing. If you want to grow and you believe you have enough really good merchandise, consider filling out the book in lieu of raising circulation. Revenue from each page you add only needs to cover its incremental costs.
         Even if your catalog already weighs over 3.3 ounces, cutting pages or trim size can save postage overall. But – keep in mind that the new rates don’t specifically penalize added weight over 3.3 ounces (the incremental “per pound” rate is actually going down a bit). In other words, putting your catalog on a diet will be a less-effective way to counter this particular rate increase.
  6. Focus on Distribution
    The new rates offer increased discounts for Destination Entry (trucking your mail closer to the destination post office). Thus, the economics of this work-sharing practice are changing again. Work with your printer to be sure you are optimizing the discounts vs. the cost of processing and truck freight.
  7. Work With Your List Partners
    If you’re using list brokers and/or co-op databases, make sure you’re getting the attention you deserve. If they rarely hear from you, they may not spend adequate time on your account – that’s just human nature. You’ll need their recommendations and models to work harder than ever now.
  8. Clean Up That List
    The subject of list hygiene only seems to come up when there’s a postage increase, but the fact is that every time you mail, you’re paying for obsolete or bad addresses. One place to start is data entry; make sure every employee understands the importance of accurate names and addresses. Re-verify customers’ addresses with each contact. Make sure your website’s address forms encourage accuracy (and that these integrate correctly with your database).
         If you’re a smaller mailer, you can manually scan through your list, eliminating dupes and correcting small errors. And take the service bureaus up on their offers to show you what their software is able to find on a sample of your list. Note: some mailers find that “non-codable” addresses (those with errors according to the USPS) aren’t worth mailing -- especially in marginal lists.
  9. Watch Those Parcel Rates, Too
    Note that one- and two-pound Priority Mail packages are going up about 15 - 20%, so if you use multiple carriers, you must re-calibrate your system’s internal rules. It’s time to look at your shipping tables again -- but if you compete with internet-only retailers, be sure to keep rates reasonable.


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