The difficult job of fixing the U.S. Postal Service continues in 2024, with the first of potentially two postage rate hikes for the year taking effect on Sunday, Jan. 21.
While household budgets see this increase in terms of pennies, for businesses, it represents real money. Postal rate increases for delivering packages, periodicals, catalogs, circulars and other bulk items can take millions of dollars off a large organization’s bottom line. Last year alone, the Postal Service delivered 59.4 billion pieces of marketing mail.
Sunday’s two-cent increase to 68 cents for a first-class stamp is part of the fifth set of postal rate hikes since 2021. It’s also not the last increase: the USPS lost $6.5 billion in 2023 and is in the midst of a 10-year transformation plan called “Deliver for America” that was supposed to help get the service to break-even by 2023.
In addition to the more noticeable first-class stamp price, the Postal Service is also adjusting rates that impact costs for businesses and organizations such as direct mail marketers and magazine publishers. As such, it’s important to stay up-to-date on options for controlling costs, with a focus on optimizing what you mail, when you mail it and how.
That means adjusting multiple levers across the postal, paper and logistics ecosystem, according to Jeff Henke, Executive Director of Postal Solutions at Quad, one of the nation’s largest mailers in the Postal Service. “It’s a layering effect,” he told attendees at the 2023 Quad Postal Solutions Summit. “You’re not going to capture all potential savings from one solution alone. You’re going to have to use optimization that includes multiple techniques to make a real difference in lowering your cost-per-piece.”
Leveraging postal discounts at scale
Quad works with thousands of brands to plan, print and send direct mail, catalogs, publications, collateral and other ink-on-paper materials to millions of American households. As part of that work, the Quad team focuses on identifying, testing and implementing best practices to help clients mitigate the impact of rate increases.
One of the most straightforward areas for savings for clients lies in taking full advantage of USPS promotions, which have the potential for reducing costs from 3% to 5%. Quad data shows that marketers who aren’t optimizing their mailings to leverage USPS promotions fully may be missing out on roughly half of the potential savings they could have realized in 2023.
For example, in 2024, mailers who implement certain innovations in paper and stock, substrates, inks, interactive elements and finishing techniques can earn up to a 5% discount. Those that incorporate technologies such as enhanced augmented reality or near-field communications can save another 3% to 4% through the USPS Emerging & Advanced Technology Promotion. In essence, mailers can take advantage of USPS Promotional Incentives all year if they plan and implement correctly.
Important note: These and other promotions are typically only available during specific time frames and require registering in advance with the U.S. Postal Service.
Staying ahead of the curve
Quad’s experience demonstrates that significant savings are also available through adjustments to data management, printing and campaign logistics that fuel various postal optimization strategies. These include initiatives such as:
“Quad has a long relationship with the Postal Service, and we firmly believe in its importance to the nation and its economy,” Henke said. “Modernization of the postal service network without requiring twice-a-year price increases should be an objective of the highest order. As this is happening, we remain focused on innovating with improved optimization solutions and processes to help clients save money.”