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Direct Mail Trends for Remainder of 2021 and Beyond

Direct Mail Trends We’re Watching: Postage, Delivery Performance, Paper and More

direct-mail-trends-2021-beyond reportMMI Direct and the PMG family are monitoring several critical industry trends as we enter the fall mailing season:

Postage:

New postage rates go into effect August 29, 2021. Commingling rate increases are compounded by rising fuel costs, truck driver and transportation shortages and a persistent labor shortage. Yet increases for non-commingled mail are even higher.

Our colleagues at MailSmart Logistics highly recommend an initial Postal Logistics review to uncover any cost savings in your mailing program. Increasing commingling volumes to achieve the best rate possible is one of the easiest ways to save on postage, especially now.

A package design review may also reveal opportunities to modify the weight and thickness of your “flat” mailings and move into a less expensive letter rate package that can commingle versus more costly drop shipping. Freight costs are increasing significantly for drop shipping.

Mailers can also save 2% on postage this fall by participating in the USPS Informed Delivery Promotion effective September 1 – November 30, 2021.

Mail Delivery Performance:

In a recent USPS Industry Alert, service delivery performance data for July 1st – August 12th showed steady improvement across First-Class, Marketing and Periodical mail categories from the 3rd quarter ending June 30:

  • First-Class Mail: Delivered 88.8 % of First-Class Mail on time against the USPS service standard, an improvement of 1.3% from the third quarter.
  • Marketing Mail: Delivered 92.6% of Marketing Mail on time against the USPS service standard, an improvement of 1.6% from the third quarter.
  • Periodicals: Delivered 82.4% of Periodicals on time against the USPS service standard, an improvement of 3.1% from the third quarter.

Our supplier partners are reporting performance levels of client mail slightly below the USPS reported data, most likely due to the limited amount of mail included in the USPS measurement.

The USPS is trumpeting its service level improvements but is now officially slowing delivery of mail. On August 6, the Postal Service announced its plan to move ahead with lengthening the service standards for almost 40 percent of First Class Mail and 7 percent of Periodicals Mail beginning next month. Deteriorating service will most likely have a negative impact on mailer volumes and USPS revenue. Through pressure from Alliance of Nonprofit Mailers, The Nonprofit Alliance and other industry groups, we hope this misguided decision will be reversed.

Paper & Materials:

Paper shortages, delivery delays and price increases continue. Paper allocations remain very strict through at least October. On-the-floor inventory at our suppliers is depleted. Paper producers are eliminating some paper grades and transitioning to packaging grades in some instances, while other mills are closing permanently. Meanwhile increased demand, increased shipping costs and ongoing staffing shortages are driving up prices.

Environmental-spec papers like Forest Stewardship Council (FSC) and Sustainable Forest Initiative (SFI) stocks are limited. Clients that require these environmental certifications on their mail pieces limit alternative paper sourcing options. Some organizations are dropping their logo requirements temporarily to allow more flexibility in substitute stocks.

Suppliers that focus on coated stocks expect another paper cost increase of 5-7% this year, with at least two increases projected for 2022. One of our leading suppliers in offset paper stocks expects price increases of 8-9% by the end of 2022.

Suppliers are also seeing rising costs for other materials, including pigments and chemicals used in ink, polybag substrate, fuel and freight. Cost increases of at least 5% are expected in 2022 across these categories of materials.

Despite shortages and cost increases, demand for printing is high. Many of our suppliers are operating at capacity. Labor shortages and the threat of Covid/Delta Variant outbreaks could further impact schedules and lead times. Last minute drop-in projects often can’t be scheduled, so long-term planning, ample lead times and sticking to art and data schedules are critical.

Overseas Production:

Though ocean freight costs continue to rise, our suppliers’ relationships with ocean freight companies allow us access to containers when others cannot get them. These relationships contribute directly to our ability to meet our clients’ mail dates.

Flexibility in budgets is helpful when scheduling is the priority. Switching to a faster yet slightly more expensive production process, for example, jet printing envelopes instead of using flexo, can help meet your mailing deadlines.

MMI Direct and the entire PMG family are constantly finding ways to keep your direct marketing programs on track despite all these challenges.

We will continue to advise you on how these trends may impact your project budgets and schedules this fall and into 2022.

Please contact us if you have any questions or concerns. As always, we’re here to help!

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USPS Introduces New Business Reply Mail Tool

Faster Delivery, Lower Costs and Better Tracking Are Available with the New Intelligent Mail barcode Accounting (IMbA™) for Qualified Business Reply Mail (QBRM)

Business Reply Mail

MMI Direct uses Business Reply Mail® (BRM) campaigns with our wide range of clients to help boost response since donors don’t have to find and use a stamp to mail back their donation. BRM is easy to use, as a result we’re seeing more nonprofits testing and rolling out BRM campaigns during the pandemic, as older donors may not feel comfortable venturing out to buy stamps for their return envelopes.

Business Reply Mail® does have an additional cost, and sometimes delivery can be slower than stamped mail. That’s because BRM is manually handled once it’s received by the BRM Clerk at your local Post Office™ location. The BRM Clerk has to spot-count, weigh and rate your BRM, tally the various mail types, and then enter the information into the USPS® system for invoicing. This takes time, especially if mail volumes are high.

Our clients often see BRM delivery delays of 1-2 days compared to stamped, First-Class Mail® mailpieces because of this manual processing.

We’re happy to report that the USPS has launched a new application, called Intelligent Mail® Barcode Accounting (IMbA), which fully automates the process of Qualified Business Reply Mail (QBRM), speeding delivery, offering a deeper price discount and automated invoicing.

The Postal Service’s new IMbA accounting platform automates the invoicing of Qualified Business Reply Mail (QBRM) for postcards and letters up to 2 oz.

The Intelligent Mail barcode Accounting (IMbA) application is a value-added service that provides more consistent and timely Business Reply Mail availability. IMbA participants will receive their mail earlier in the day, reducing float time with more efficient and effective mail processing. IMbA customers also have the convenience to view and download invoices from their PostalOne!®account.

QBRM is for cards and letters only. A ZIP+4® is provided for each mail type, and an Intelligent Mail® barcode (IMb) is required. There are two prepaid return options available depending on projected return mail quantities: QBRM “Basic” and QBRM “High Volume.” QBRM “Basic” is best suited for customers whose return volume is approximately 613 letters or more, or 613 cards or more, expected annually. While QBRM “High Volume” is best suited for customers whose return volume is approximately 42,947 pieces or more quarterly or 171,786 pieces or more annually. Mailers can access their data through the Informed Visibility® feature and can review their invoices in PostalOne!®

We have several clients who are testing this new service with their fall and year-end mailings. The MMI Direct team is assisting them with the sign-up process. We are also working with USPS officials to promote this new program within the nonprofit community.

If you have any questions about this exciting, new QBRM service with IMbA, or need help getting started, please contact us. We’re eager to help.

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Prepare Your 2021 Postage Budget Now

Here’s what we know so far about the impending 2021 postage increases:

The U.S. Postal Service is expected to file its proposed postage rate increases at the Postal Regulatory Commission before October 13, which is the release date for the latest Consumer Price Index (CPI) data.

The current CPI price cap is 1.458 percent, and applies to each class of mail. Individual rate cells may be higher or lower.

postage rates

According to Steve Kearney, Executive Director of the Alliance of Nonprofit Mailers, the USPS has unused price cap capacity they could potentially add to the 1.458 percent cap in certain classes:

  • First Class Mail: 0.385 percent increase
  • USPS Marketing Mail (includes Nonprofit Mail): 0.049 percent increase
  • Periodicals: 0.000 percent increase
  • Package Services: 0.008 percent increase
  • Special Services: 0.007 percent increase

The 2021 rate increases may go into effect on January 31, 2021 which is the last Sunday of the month. However, the rate increases could go into effect a week earlier, on January 24, as there are five Sundays in that month. We will monitor this timing.

The PRC may also order new surcharges for the USPS in 2021; the amount and timing are uncertain.

As you prepare your 2021 mailing plan, you can download 2020 Postage Rate Chart from our colleagues at PMG and consider using a 5 percent increase for First Class and a 2 percent increase for Marketing (Third Class and Nonprofit) mail as a baseline for your budget.

We will continue to keep you informed of the USPS rate review process and will update our Postage Rate Chart once the new rates are approved.

In the meantime, if you have any questions as you prepare your 2021 postage budgets, please contact us. We know it’s complicated, and we’re eager to help!

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Expert Panel Hosted by DMAW Reports on Mail Deliverability Trends & Tips for Fall Fundraising

Our colleague Debbie Sylvester of MailSmart Logistics was one of five expert panelists reporting on mail tracking data and sharing insights during this week’s DMAW “USPS Status: What is Fact and What is Fiction” webinar.

The key findings conveyed by all the panelists:

  • Mail tracking data across hundreds of mailers and hundreds of millions of mail pieces indicates that average delivery times have not changed.
  • Pandemic-related delays over the past several months have now abated and are improving. First-Class Letter Mail and Marketing Mail delivery are performing consistently, with delivery slowed by just a half-day or one day at most, when comparing monthly and annual trends, including election years.
  • Flats, such as catalogs, magazines, and larger envelopes are experiencing delays with inconsistent delivery times.
  • Inbound reply mail is experiencing some slowing.

The panelists shared valuable tips for nonprofits planning their fall mailings during this busy election and fundraising season:

  • Track your own mail! Your own mailing data is more helpful than relying on media coverage, anecdotal evidence, or even USPS data.
  • Tracking your outbound mail is the top priority, but if you can, also track your inbound mail. Tracking can help you with revenue forecasting and cross-marketing efforts.
  • Debbie Sylvester noted that 90+% of commingled mail goes directly to the Destination SCF (Sectional Center Facility), skipping four USPS steps: the local post office where your mail shop is located, the Origin SCF, the Origin NDC (Network Distribution Center) and the Destination NDC, which expedites delivery, is more predictable, and saves money.
  • Debbie also explained that Drop Shipping your mail to Destination SCFs and NDCs is another potential solution depending on the geographic density and volume of your mailings. Your postal logistics partner can analyze each mailing and recommend the best approach. In some cases, the best solution may be a hybrid plan, including both commingling and drop shipping.
  • Moderator Mike DeFlavia, Vice President of Production, at Lautman Maska Neill & Company remarked that it’s not necessary for fundraisers to know all these technical details. Your agency, production, and postal logistic partners can provide expert guidance on what’s best for your individual mailings and your overall program.
  • Business Reply Mail is sometimes delayed when it gets to its destination due to accounting unit processing delays at your local post office. Contact your local Post Office to inquire.
  • We will see large volumes of political mail in the weeks and months ahead, especially in swing states. So plan ahead and work with your partners on your campaign schedules and mailing strategy.

Steve Kearney, Executive Director of the Alliance of Nonprofit Mailers, who spent over 35 years at the USPS in leadership positions, cut through the media clutter with accurate information about postal operations and funding.

  • The Postal Service can handle mail volumes during election season, including vote-by-mail correspondence, which is a tiny percentage of overall mail volume.
  • The pandemic has impacted postal employee availability in Covid-19 hot spots; certain areas are experiencing service delays due to absenteeism.
  • Steve Kearney noted that given the volume of daily mail processed through the USPS, anecdotal evidence of delays, often covered in the media, is not reflective of the overall service levels which are well within established delivery standards.
  • The new Postmaster General Louis DeJoy is committed to maintaining service levels, prioritizing election mail, and is delaying any proposed changes until after the election.

Mike DeFlavia wrapped up the discussion by stating that direct mail continues to be a critical channel for nonprofits, and nonprofits should move forward with their plans for the fall and year-end. 33% of charitable giving is done in the last three months of the year, according to the 2019 Charitable Giving Report from The Blackbaud Institute. And for many nonprofits, direct mail continues to be the largest source of donation revenue.

If you have any questions about the USPS, mail tracking and deliverability trends, and your fall mailing program, please contact us. We’re happy to help and share our insights.

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USPS: Fact and Fiction, Register for the Webinar

What is fact and what is fiction when it comes to reports about the USPS?

The USPS has been featured by the media quite a bit in recent weeks. As a mailer, it’s hard to know what is factual and what’s, well, not.

Debbie Sylvester, Vice President of Sales for MailSmart Logistics will serve as a panelist on a free webinar hosted by the DMAW:

USPS STATUS: WHAT IS FACT AND WHAT IS FICTION

Wednesday, August 26th

1:15-2:15 PM  EDT

Seats on this webinar are extremely limited. If you want to cut through fact vs. fiction be sure to reserve your seat.

Have additional questions – we can help. Just drop us a line and we’ll be in touch.

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Mail Service Continues – USPS Operational Plan

Mail Delivery Continues During Covid-19 Crisis

MMI Direct, the entire PMG family of companies, our partnering printers and lettershops, and the USPS remain committed to delivering mail to the American public during the Covid-19 crisis.

The USPS recently shared their operational plans during the Covid-19 outbreak.

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Data Hygiene Critical for Move Update Validation

The USPS will begin using a new Move Update validation process which could impact your budget. It allows them to better identify and penalize mailers who do not practice solid data hygiene. Here’s the breakdown of the changes.

What does this mean for mailers?

As you know, in order to receive postal discounts, the records on your mailing list must have gone through a data hygiene process called NCOA (National Change of Address) no longer than 95 days prior to your mail date. This helps the post office better manage their resources by reducing non-deliverable mail and the time-consuming task of forwarding and/or returning or trashing mail that cannot be delivered to the intended recipient. Move updates must be done for both Marketing Mail (formerly Standard) and First Class mail.

Nothing new there, so what’s changing?

Well, the USPS is changing the validation method used to determine compliance with Move Update –Mailpieces are scanned using Mail Processing Equipment and each mailing’s scores are maintained on a Mailer Scorecard. These results are aggregated across the calendar month and are measured against the established thresholds. Any COA errors exceeding the threshold, which is an error rate of 0.5%, will be assessed a Move Update assessment fee.

What does this mean for you?Move Update Validation

In order to keep your error score down, it’s important to keep up with your data hygiene protocols and process them through the NCOA hygiene in the prescribed time frame.

Managing how your data is in your record will also help. Small things like ensuring your recipient name reads FIRST NAME/LAST NAME vs. LAST NAME/FIRST NAME will greatly decrease your error rate.

If you need assistance with any data hygiene or ensuring your Mailer Scorecard is within USPS thresholds, please reach out to us – we’d be happy to help.

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How to Handle Addresses with Questionable Delivery

What should you do with records that are flagged as potentially undeliverable during the CASS Certification process or while being run through the National Change of Address (NCOA) database? It depends upon the type of error that CASS or NCOA identifies

Addresses with Questionable Delivery

CASS Rejects and NoPlus4 Records: If there’s a major problem with the records – there’s no street address or the zip code is in the wrong state – it should be removed from the mailing. However, if the zip code is in the right city but CASS couldn’t append the zip+4 code, don’t automatically drop the record; the USPS postmen and postwomen tend to be very knowledgeable about their areas and may well know where to deliver it. Look at the flags or footnotes CASS appended to your file and choose the records to drop based on the severity of the error CASS noted. You can also mail these records under a separate code in order to test the responsiveness to your particular appeal or offer.

Nixies: There are two types of nixies and they each should be dealt with separately.

    • An “NCOA nixie” is someone who filled out a change of address form with the U.S. Postal Service but did not provide a forwarding address. You may be able to identify a forwarding address for some of these NCOA nixies through a Proprietary Change of Address (PCOA) database, but those who do not come up should be dropped from your mailing as they will not be delivered.
    • A “potential nixie” is someone who resides on the NCOA database and during the matching process the match wasn’t exact enough to provide a new address but was close enough to consider they may have moved. The USPS footnotes these potential nixies so you can determine the circumstances that caused them to land in this category and you also may pick up some forwarding addresses through the PCOA process.

What to do with your remaining potential nixie addresses? In order to make a good business decision regarding whether to mail these names or not, you will need to test them. Mail them and track their responsiveness. Most of our clients have determined there is value to mailing these names, but only your results will tell you the best way to deal with potential nixies.

Feeling a bit confused about the many decisions that managing your mailing list requires? You are not alone! If you’d like to put our decades of data hygiene experience to work improving your direct mail’s ROI, please call John Bell at (310) 372-9010.

 

Want more than a cookie cutter approach? MMI Direct dives deep into your data
to determine how best to optimize your list and maximize your direct mail ROI.

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Should you use PCOA to clean your direct mail list?

PCOA

The U.S. is a very transient country. With over 11% of all Americans moving in a typical year, keeping your direct mail list up-to-date is an ongoing challenge.

If you’re regularly mailing solicitations, newsletters or other pieces to a large list, you are undoubtedly already running your list through the USPS’s National Change of Address (NCOA) database. Not only does this cut down drastically on the number of undeliverable pieces you’re sending, but having processed your list through NCOA within 95 days of a mailing qualifies it for reduced postage rates.

An unfortunate fact, however, is that as many as 40% of Americans who move don’t bother to file a change of address notice with the USPS. They may have forgotten or they might have consciously decided not to do so in order to avoid creditors or cut down on unsolicited mail. But even those who didn’t change their address with the post office probably did notify their cell phone company, cherished magazines, and other companies they didn’t want to lose touch with.

A consortium of these organizations banded together in 1995 to share this information with each other and make the data available to services like MMI Direct. It is definitely worth testing whether running your list through the Proprietary Change of Address (PCOA) database pays out in terms of higher returns on your mailings. Fortunately, while PCOA processing used to cost several times more than NCOA, PCOA’s cost has dropped substantially in recent years.

Assuming the benefits of PCOA do pay out for your list, you then need to determine how frequently you should use it. Relocation rate is heavily dependent upon age — Americans in their twenties move nine times more frequently than those in their seventies, for example. It is also heavily dependent upon income, with almost twice as many Americans earning less than $5,000 a year moving in 2012 (13%) compared to those with an annual income of over $100,000 (7%). So it may make sense for managers of lists consisting primarily of older, wealthier donors to run their full house list through PCOA far less frequently than a company whose target audience is young gamers.

You should also consider if there are specific segments of your list that should be updated more frequently than the list as a whole. For example, you may want to run lapsed contributors through PCOA every six months to help you reconnect with individuals who’ve previously shown their willingness to support you.

Finally, an important question to consider is whether to update address data for active donors in your database if PCOA indicates they’ve moved. No process is error-free and, if someone has donated to you recently, you may have more accurate data than that in a compiled database.

Figuring out how to optimize your list is challenging. If we can help you in any way, please don’t hesitate to call (410) 561-1500.

 

Want more than a cookie cutter approach? MMI Direct dives deep into your data
to determine how best to optimize your list and maximize your direct mail ROI.

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