Thriving Despite USPS Price Hikes: Strategizing Direct Mail Campaigns with Data, Segmentation, and Personalization

By Braden Salas

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Marketing Coordinator

As businesses grapple with the imminent increase in USPS prices scheduled for 2024, understanding and adapting to USPS price hikes becomes a pressing concern. The proposal outlines an average rate increase of 1.96% for Marketing Mail, with a specific increase of 1.33% for Marketing Mail Letters and a more substantial hike of 3.96% for Marketing Mail Flats. Along with other product price hikes of an average 2% increase, calls for a critical rethink and reshaping of direct mail strategies—the aim: ensuring a sustained return on investment (ROI).

The Impact of USPS Price Hikes on Direct Mail

Sweeping USPS price increases have sent ripples through the world of Direct Mail. As costs rise, marketers grapple with adapting their budgets, potentially reducing the volume of mail pieces achievable within existing expenditures. Consequently, the focus sharpens on each individually mailed piece, with the significance of intensifying the return on investment (ROI) of each direct mail campaign.

Insights from HVDMA’s Webinar and Strategies to Overcome USPS Price Hikes

The recent Postal Power webinar conducted by the Hudson Valley Direct Marketing Association (HVDMA) shed light on the challenges direct mail marketers face amidst escalating USPS pricing. Deborah Damore, Chairperson for the American Catalog Mailers Association (ACMA) Postal Committee, led an insightful discussion on the evolving postal landscape and introduced USPS promotions designed to help businesses adapt to these changes. In addition to analyzing two decades-long trends of mounting postal costs, the webinar emphasized the significance of innovative marketing tactics, interactive design elements, and customer engagement in driving higher response rates.

The Postal Power webinar also delved into the impact of emerging technologies such as virtual reality and 360° photography on consumer experiences. Brands like Lovesac leveraged virtual showroom meaning brands could send simpler mail pieces, reducing cost, with a profound digital extension to maintain ROI. We’re eagerly anticipating the upcoming HVDMA’s 2024 Postal Insights webinar, scheduled for April 23rd, 2024. This event promises to bring valuable updates and insights.

To further protect direct mail campaigns against price hikes, consider staying informed about industry news and supporting associations like ACMA, which lead advocacy efforts against recurring postal rate increases.

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Strategies to Counter USPS Price Hikes

Keep Data Clean and Deliverable

As USPS price increases become a harsh reality, the reliance on dependable data becomes all the more critical. Excessive or misdirected mail translates to wasted marketing budgets – an avoidable pitfall if National Change of Address (NCOA) and delivery standardizations are done before mailings. Ensure each mail piece reaches its intended recipient, securing the cost-effectiveness of your campaign.

A crucial step in ensuring data reliability lies in maintaining data hygiene, a process involving the regular updating, standardization, and decluttering of your customer database. Our previous article on Data Hygiene delves into how maintaining the accuracy and relevance of your customer data enables your marketing campaigns to reach their targets more efficiently. Practices such as Address Standardization, NCOA, Email and Phone Number Hygiene, and Suppression List Management play a significant role in this process.

Data Modeling Will Help Target Those Most (or Least) Likely to Respond

Harnessing advanced technologies such as data modeling, machine learning, and artificial intelligence (AI) has become a pertinent strategy for businesses aiming to maximize the cost-efficiency of direct mail campaigns. Data modeling, in particular, scores the likelihood an individual will take a specific action.

LiftEngine builds a number of different Lookalike or Modeled Audiences for clients, depending on their marketing goal. At a high-level, we score your upcoming mailing audience based on their propensity to respond to your mail piece. With that information in hand, you can drop those least likely to respond. The goal is to lower the amount of pieces put into the mails without sacrificing response rates.

Advanced Customer Segmentation & Creative Personalization

Navigating USPS price hikes requires a strategic approach to optimize direct mail campaigns, with more personalized advertising playing a critical role. The secret to crafting successful ads lies in the intelligent use of customer segmentation data.

This segmentation creates a comprehensive understanding of your customers, based on various criteria such as purchasing behaviors, preferences, and demographics. In harnessing these insights, you can curate advertising content specifically tailored to major customer segments. For example:

  • Swap images based on gender, age, and household demographics
  • Showcase different products and promotions based on net income

While crafting personalized ads may require a slightly larger initial investment in the data, the long-term benefits in the form of improved customer responses and greater revenue solidify its role as a key strategy in addressing rising USPS rates.

Print on Demand (PoD) Mailing for Housefile Campaigns

As businesses seek strategies to mitigate the impact of USPS price hikes, many are turning to Print on Demand (PoD) mailers for cost-effective, timely, and personalized mail pieces. These platforms, which make direct mail as simple as an email campaign in many respects, allow for small, focused campaigns. They really shine for housefile mailings by allowing advertisers to capitalize on customer actions in an organic way. For example:

  • Follow-up 30 days after a purchase to cross-sell similar products or encourage rebuys
  • Send out a direct mail piece to an individual before they go lapsed
  • Send out birthday promotions a few weeks before their big day

What makes PoD offerings even more appealing is their compatibility with data enhancement services – for instance, LiftEngine, a leader in consumer data and analytics. Ask us how we can help add demographic, interest, and buying behavior data for more accurate customer profiles and targeting capabilities on your PoD platform.

As a result, businesses can use PoD services to run new direct mail strategies, empowering businesses to maximize ROI and stay competitive in the era of rising postal costs.

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Published on Oct. 12, 2023, Last Updated on Jan. 12, 2024