As the pressure rises on marketers and business mailers, Quad’s Executive VP and Chief Administrative Officer, Don McKenna, offers insights on navigating the rapidly evolving postal solutions space.
Q. What are the major concerns that you’re hearing from marketers and publishers these days when it comes to postal issues?
Don McKenna: There are two major issues that clients are facing. No. 1 is the tariff issue. Everyone’s trying to understand what it means for their business and what it’s going to mean for their programs this year. And there’s just not real certainty there — the tariffs conversation keeps changing.
The positive thing is that paper that Quad brings in from Canada is covered under the USMCA [United States-Mexico-Canada Agreement] that was signed in the first Trump administration and is not subject to tariffs. And although most of our manufacturing facilities are in the U.S., we also do some printing in Mexico that comes to the United States — but that’s also covered under the USMCA and not subject to tariffs. So that’s the good news.
But for anyone bringing paper in from Europe right now, it looks like that may have a significant tariff on it. Some of our customers bring in paper from all over the world, and we’re helping them to understand ultimately what that means and how that’s going to impact their budgets. So, that’s a shock to the system that we need to work through together.
The other issue is about postal increases from the United States Postal Service [USPS]. At the Quad Postal Conference in early April, Sharon Owens, USPS VP of Pricing and Costing, went through the rates that we expect to see in July. Right now, we’re working with our clients — direct mail customers, catalogers and publishers — to figure out exactly what those rates will mean for them.
But what we already know is the increase in postage over the last three to four years has far exceeded what we’ve seen in overall inflation. If we’re looking at the next three to five years, those same dynamics could exist. So, we spent a lot of time at the conference talking about ways in which we can all work together to try to bring that impact of postal increases down — and try to make them, to some degree, manageable.
Q. How would you describe Quad’s approach to postal optimization?
Don McKenna: We’re taking a holistic, big-picture view of postal optimization. For instance, we take a look at a client’s target audience list and ask, How can we take all the names and optimize them?
There are a variety of different programs that we utilize. For instance, our Household Fusion program, which we launched at last year’s Quad Postal Conference, is a co-mailing option that takes various catalogs or various magazines from different publishers that are destined for a single household and puts them together into one recyclable polybag — which results in savings on postal costs.
Household Fusion is a production idea that came from Quad that we brought to the USPS and that we then brought to market. We’ve done a lot of testing with clients, and now we’re focused on growing and scaling that business. There is strong interest and growing participation with our clients.
Q. How do people engage with a Household Fusion package when they get it in their mailbox?
Don McKenna: If there’s a magazine in the package, consumers have paid for the magazine to be delivered to them, so they’re going to be interested in the package. Consumers love catalogs, too, and our clients spend a lot of time and effort to make sure the recipient is interested in their products. But whether it’s catalogs or magazines, we’ve found consumers want to open the package because it’s curated, really. Our Accelerated Marketing Insights (AMI) eye-tracking studies of how people interact with the package are very revealing. They’ll interact with it for 8 to 10 seconds, which is almost like a lifetime relative to someone just looking at any other regular piece of the mail.
We’re thinking through the value that this package has versus everyone mailing alone. We’re continuing to invest in our own in-house pre-market testing as well as third-party independent analysis of how consumers engage with the package to explore new and innovative ways to elevate Household Fusion.
Q. Talk to us about At-Home Connect, Quad’s direct mail automation solution. How does that platform play a role in postal optimization or our mail strategy in general?
Don McKenna: At-Home Connect really bridges response effectiveness and cost efficiency — we touch both sides of that equation here. It’s super-efficient and super-fast, because we’re putting a standard direct mail product through a digital press, and you can have any versioning or personalization that you want on the piece. And because it’s all fed in and then all the lists bundle together, you’re going to get your lowest cost, the best postal savings, that you can get without going to an offline optimization operation.
Q. Explain the “connected omnichannel” aspect of At-Home Connect — the idea that we can work with brands to complement their digital marketing with direct mail that can leverage online customer actions.
Don McKenna: Because of the efficiency and speed of At-Home Connect, we can help marketers build omnichannel executions that can outperform more traditional programs. Say you’re a large cataloger that sends an 80- or 100-page book to your customers. At-Home Connect can give you options for other direct mail touchpoints throughout the year, because it seamlessly integrates with CRM systems or top marketing automation platforms. As your customers have other engagements with your brand across email and online, you can respond back to someone who seems to have an interest with, say, a personalized direct mail postcard — offering a special discount or other incentive — based on their specific interaction. At-Home Connect fully automates that workflow, handling everything from design and printing to sorting and mailing — and we use household data and mailing information validated in partnership with the U.S. Postal Service to ensure the mail ends up in the right consumers’ hands at the right time.
Q. Can you speak a bit more about Quad’s data capabilities?
Don McKenna: With the investments we’ve made over the last decade in data, audience and analytics, we’re able to help our clients figure out the right media mix across online and offline channels to get the right message to the right person at the right time. And then we’re able to prove it out with analytics on the back end — and then watch and repeat.
The Quad difference is we start with the household. We think of the consumer’s home as the one true, resilient identifier that allows brands to connect with real people. Because of our decades of direct mail experience, we understand the household — and Quad reaches more than 250 million consumers across 92% of U.S. households through the work we do for our marketing clients.
Getting the right message to the right consumers in the right households is of tremendous value to marketers, and we’re continuing to collaborate with our customers to figure out the best ways to deliver efficiency and response effectiveness across omnichannel campaigns.
Want to learn more about Quad’s postal solutions? Reach out to us here.
