Dealing with rising postage costs.

• Author: Turner, Jim
• Position: Direct Mail Essentials

Postal rates are scheduled to increase this year, so now is a good time to examine how much you spend on postage and the class of delivery you choose for promotions.

Postage alone typically accounts for one fourth or more of the cost for mailings. And, there can be a big difference between classes of postage. For example, under the new rate schedule, to mail a business-size letter, you might pay as much as 39 cents an ounce at first-class rates or as little as 18.4 cents at "standard" rates (which used to be called third class). On a 20,000-piece mailing, that's a savings of more than $4,000.

Should you use first class or standard class? And, what is the impact on delivery time and readership?

Classes and processing

Within the categories of first class or standard class, you can choose a variety of types of processing. For example, either class can be sorted as two major types (automated or carrier route), and within those they can be sorted in as many as 10 ways, each allowing for a different rate.

Your ability to mail at lower "automated" rates will depend on the dispersion of the recipients and the sorting level you choose. For relatively small mailings, perhaps several thousand or less, the type of sorting is not a major issue. But for larger mailings, the costs add up quickly.

If you can save on postage by additional sorting, you can send more pieces for the same cost. For example, assume you mail 10,000 pieces and with standard-class carrier-route sorting you can reduce your rate from 28.2 to 20.4 cents, or by $78 per thousand. If your total costs (printing, lists, lettershop, postage and so forth) were $700 per thousand, the $78 per thousand savings means that for each 10,000 sorted at the lower rate, you could mail another 1,100 pieces "free."

Timing and response

The decision whether to use first or standard class may be influenced by the urgency of your message. If it is highly time-sensitive material, such...