MAILERS ARE RESENTFUL that the U.S. Postal Service could request a rate hike in light of all the surpluses it’s registered over the past few years. But some indicate they will not (or cannot) immediately move their marketing away from direct mail.
“There won’t be any significant changes in the way we mail, but we will try to mail earlier [to beat the implementation date],” says Arnie Zaslow, executive vice president at business-to-business cataloger ATD American, based in Jenkintown, PA. “And we’ll try to mail in the most efficient manner to take advantage of all the postal discounts,” he adds.
“It’s kind of deceptive the way they said it’s only an 8% increase because when you look at three- and five-digit ZIP code mail with barcodes, the increase is more like 14%,” says Mark Heinz, manager of postal affairs at cataloger Foster & Gallagher, in Peoria, IL. “And most catalogs fall under this category.”
Heinz notes that his company, which mails out about 300 million catalogs per year, might look further into reworking its mailing strategies to see if it can get additional postal worksharing-type discounts, but admits the firm has already taken advantage of all such discounts the postal service has to offer. “They just raised the prices on us,” he quips.
He also says Foster & Gallagher, many of whose customers live in rural areas, would not be able to move away from catalog marketing any time soon, even though each of its catalogs has a Web site.
Similarly, Disabled American Veterans – a high-frequency, high-volume nonprofit mailer – will have a hard time getting away from mail, says fundraising director Max Hart. “In the next 12 months,” he says, “we’re going to see if the Web is a viable marketing medium for us, but overall we’re stuck with mail.”
Hart questions why the USPS needs a postage increase now. He indicates he could live with the proposed one cent increase in first class rates, but finds worrisome the other proposals that could raise rates by as much as $600,000 per year – especially in light of the huge increases nonprofit mailers had to shoulder in the last rate hike. “The nonprofits got hit pretty bad during the last rate case, but Postal Rate Commission chairman Ed Gleiman said his hands were tied,” says Hart. “We hoped the USPS would take that into account, but they didn’t.”
At Consumer Reports magazine, senior circulation director Simon Aronin says he expects to be hit with 5.5% to 6% increase. This could prompt the nonprofit publication to consider mailing less, to raise its subscription rates and to terminate its relationships with marginally profitable subscribers.
Aronin adds that the pending hike makes alternative forms of delivery – such as card decks, newspaper inserts and the Internet – look all the more viable, noting that the magazine is actively developing techniques to advance the collection of e-mail addresses.
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