Table of Contents
- Direct mail meets email? USPS’s 2024 incentives offer a 30% postage credit for increased mail volumes, aiming to blend direct mail with digital marketing strategies.
- USPS credits as incentive. Registration for the incentives is through the USPS Mailing Promotions Portal, with credits applicable until the end of 2025.
- The customer experience benefits. The program encourages a multichannel approach, integrating direct mail with digital for a seamless customer experience.
With postage credits as the carrot, the USPS is set to reposition snail mail as a competitive player in the digital age’s marketing arena. Snail mail competing in the era of AI-driven personalized marketing and digital customer experience?
Why yes, says the USPS.
“Direct mail is a key marketing channel that works synergistically with online marketing channels,” Felicia M. Lott, senior public relations representative, USPS Corporate Communications, told CMSWire. “Studies have shown that digital advertising combined with direct mail is more effective than digital advertising alone. USPS offers a variety of innovative strategies and tools to integrate direct mail with digital channels.”
For example, she cited programs that incorporate opportunities for digital interactions:
- The Emerging Technology promotion for 2024 includes Voice Assistant and Mobile Shopping categories
- The Retargeting promotion enables a direct mail mailpiece to be generated following an online business to customer interaction
- Another example of integrating direct mail and digital marketing is seen in USPS Informed Delivery offerings.
Still, that latter survey found 97% of mailers report steady direct mail campaign performance, and 90% or more have integrated or plan to integrate digital marketing channels in their direct mail strategy.
Here’s the ultimate real question for marketers regarding the USPS’s incentives program for direct-mail use and marketing: Is it worth the investment? Should marketers spend more energy and resources toward the mailbox vs. the inbox?
Let’s explore the USPS Mail Growth Incentives:
What Is the USPS Mail Growth Incentives Program?
The USPS is offering a First-Class Mail Growth Incentive and a Marketing Mail Growth Incentive.
The two Mail Growth incentives are being offered to mail owners to incentivize them to grow mail volume in 2024. The Postal Service will be issuing postage credits to mail owners who grow qualifying First-Class Mail or Marketing Mail volumes in calendar year 2024 compared to associated baseline volume in Fiscal Year 2023 (FY23) and meet all other requirements for these incentives.
Qualifying volumes for the First-Class Mail Growth Incentive include:
- Presort Letters
- Presort Cards
- Presort Flats
Qualifying volumes for the Marketing Mail Growth Incentive include:
- Marketing Mail Saturation Letters and Flats
- Marketing Mail High Density Letters and Flats
- Marketing Mail Letters and Flats
- Marketing Mail Carrier Route
- Marketing Mail Parcels and Saturation Parcels
Registration for the Mail Growth Incentives will occur separately, and the corresponding postage credits will be calculated separately. Any mail owner who expects to grow volume and have at least 1 million pieces in CY24 can register and will be eligible for the postage credits.
The Postal Service will issue a 30% postage credit based on the incremental volume in CY24.
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How Do You Apply for USPS Mail Growth Incentives?
Registration for each Mail Growth Incentive will occur through the Mailing Promotions Portal, available through the Business Customer Gateway. After logging in, USPS will provide the mail owner with their corresponding baseline volume based on all of a company’s Customer Registration IDs (CRIDs). The mail owner must record their agreement with this baseline volume, and other terms and conditions, to complete registration.
Access to registration is expected to be available starting in mid-November 2023.
Registration will end June 30, 2024. As long as a qualifying mail owner registers for either of these Mail Growth Incentives during the official registration period, they will earn credits in that incentive for the entire incentive period of Jan. 1-Dec. 31, 2024.
Postage credits earned as part of these Mail Growth Incentives will be allowed to be used immediately after they are issued but must be used no later than Dec. 31, 2025.
How Do Incentives Get Calculated for Qualifying First-Class Mail and Marketing Mail Volumes?
There are no tiers or levels involved in the Mail Growth Incentives, Lott told CMSWire. The Postal Service will issue a 30% postage credit based on the incremental volume in CY24 vs. the higher of (a) baseline FY 2023 volume and (b) one million pieces times the average actual price paid per mail piece for qualifying mail for the entire incentive period. Postage credits earned will be issued starting after June 2024, September 2024, and final credit amounts will be issued starting in January 2025 for qualifying mailings during the preceding incentive period.
There are three conditions that exist for a Mail Owner to receive these postage credits:
- The mail owner must register for the incentive and agree to their baseline volume.
- The mail owner must mail at least 1 million qualifying mail pieces in CY24 in the mail class relevant to the incentive in question (First-Class Mail or Marketing Mail).
- The mail owner’s CY24 volume must exceed their volume in FY23.
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Who’s Excited About Direct Mail?
According to a recent survey by RRD, which provides direct-mail services along with marketing, packaging, print and supply chain solutions, consumers are showing renewed interest in direct mail (63% of Gen Z and 62% of millennials are more excited about direct mail now than they were a year ago).
The sell for marketers to take the direct-mail plunge?
“Today, virtually all serious direct marketers are incorporating USPS postal promotions into their budgets and counting on maxing out savings in an effort to offset rising postal expenses,” said Steve Arsenijevic, vice president of Client Strategy, Direct Marketing, RRD. “This began as an optional program where marketers would only participate in certain promotions like tactile, emerging tech or informed delivery (ID). Now policy and best practices indicate that the USPS promotional discount should be applied and achieved throughout the year, and on every possible qualifying piece of marketing mail.”
If indeed there is the so-called renewed interest in direct mail, especially among younger demographics, how should marketers adjust their messaging, design and content strategies to engage these audiences effectively?
Clearly there is evidence of the mail channel growing in certain markets and applications, according to Stefanie Cortes, director of Strategic Analysis, Direct Marketing, RRD. Using mail as the proactive, lead-generating channel is resonating with digital advertisers, and new techniques in creative presentation and format along with advanced digital print and delivery systems connect the mail channel with the digital, social and email cadences, she added.
“This allows direct marketers,” Cortes said, “to look at campaign activity and performance results at the customer/prospect level across all media spend. With these more comprehensive insights, marketers can give better direction to creative teams about messaging. When are we communicating with this prospect or customer in relation to their experience with us and our previous messaging? Answering this allows creative teams to be responsive and interactive as opposed to simply restating the same message over and over. Rather, the messaging can evolve and add interest to the recipient as they move along their decision journey.”
Cortes argues there is clear evidence that direct marketing requires multiple touches with a prospect to gain an optimal adoption rate and response. The series, or sequence of messages along with the timeliness and relevance of the message content, factor heavily into this optimization as well, she added.
“So the prescription for success in the new and emerging direct marketing categories seems to be: incorporate mail into existing campaigns, measure cumulative success across all channels, version mail creative to fit into an overall campaign that is reflective of prior touches and other channel activity and test, test, test,” Cortes said.
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What Are the Pitfalls for Marketers When Planning Mail Budgets?
Robert Lindsay, vice president, Postal Affairs, RRD, said marketers should engage enthusiastically with this 2024 Growth Incentive in concert with the 2024 Promotions that have also been approved by the Postal Regulatory Commission (PRC). Postage costs for the incremental volume not only get the 30% credit but are also eligible for promotion discounts ranging from 3% to 5%, he added.
“Assuming many marketers throughout the country engage in this Growth Incentive — this will send a clear message to the Postal Service that there is indeed a ‘price elasticity’ relationship between postage rates and volume,” Lindsay said. “This will then lead to continued initiatives by the Postal Service to increase volume by offering other targeted postage price reductions.”
Clearly the USPS postal rate increases over the last and coming cycles create a hurdle for direct marketers. This has led to a chilling effect in several mainstream mail sectors (nonprofit, retail, financial services, telecom/cable, just to name a few), according to Lindsay.
“As costs rise, the line of acceptable response goes up, cutting quantities and causing large-scale marketers to recalibrate their cost to acquire metrics,” he said. “The postal promotions program is a lifeline that must be incorporated into the overall budgeting plan for direct marketers today. That said, plans must sometimes wait for the issuance of the next year’s calendar for promotions in order to confirm that certain promotions are continuing, understanding new promotions and program changes since these discounts are now counted on as part of the overall direct marketing budget.”
Incorporating Online and Direct Mail Marketing Strategies
Naturally, no marketing team will recommend putting all marketing eggs into the USPS. Are there any innovative strategies for integrating direct mail with digital channels to create a seamless customer experience?
There are many opportunities for marketers to leverage offline channels that complement and reinforce online channels, according to Cortes. Sending personalized direct mail to a prospect who visited your website — or, for example, left something in their cart — can effectively convert them into a customer. Retargeting involves obtaining the visitor’s IP address from a website visit, or mailing address from an app visit, and then sending a dynamically printed postcard with a targeted message to their residence.
“We’re also seeing a massive uptick in QR code usage in the past year; some research has pointed to QR code usage has more than doubled YoY,” Cortes said. “Marketers are also able to leverage this data to get to the next level of engagement.”
The extension of the use of dynamic QRs is the implementation of PURLs (personalized URLs) can also aid a multichannel strategy. Through the PURL, marketers can sharpen their response tracking and, more importantly, increase their response by offering prospects a personalized web landing.
“This allows us to take the key drivers from the mail impetus and carry them forward to greet the respondent as they continue their decision journey to the web page,” Cortes said. “Time and time again we are realizing substantial lift and persistence in respondents that move through this tactic.”
Environmental Impact of Direct Mail
Of course, when talking about direct mail, there will be environmental concerns. Sustainability is a big topic today, and marketers must be conscious of this dynamic. How is the USPS addressing environmental concerns, if any, related to increased mail volumes? Are there sustainability initiatives tied to this program?
“The Postal Service Corporate Sustainability Initiatives team focuses on integrating sustainability principles across the Postal Service,” Lott of the USPS told CMSWire. “This includes eliminating waste in our operations, reducing negative environmental impacts by focusing on conserving resources at the facility level, increasing recycling, reducing waste sent to landfills, expanding procurement of environmentally preferable products, and reducing consumable spending.”