Cambridge, MA–The New England Mail Order Association (NEMOA) spring conference is usually a relaxed, happy event. This year, though, the conference opened on a serious tone, as attendees discussed ways to mitigate the postal rate hikes scheduled to go into effect on May 14.
In approving the Postal Regulatory Commission’s recommendations on the rate case, the USPS Board of Governors did leave open the possibility of price revisions for Standard Mail flats—the class that affects most catalogers–not-machinable First Class letters, and Priority Mail flat-rate boxes. The PRC’s recommended increase for some catalog mailers is as much as 40%, more than double what the Postal Service had originally proposed in its filing.
Assuming that the rates for Standard Mail flats aren’t lowered prior to May 14—a safe assumption, most say–” it’s going to cause people to reduce the number of contacts they have and seriously reconsider page counts,” said Coy Clement, founder of East Greenwich, RI-based catalog consultancy ClementDirect.
Clement said his clients, and the industry in general, are still absorbing what is going on. But improved list modeling and segmentation, for example, won’t be enough to compensate for the postage increases.
“Something like this, which could have been originally a 20%-30% increase, there’s just no way you can model yourself out of that in the short term,” Clement said. “It takes a couple of years to absorb that big of an increase.”
Michele Salmon, who heads corporate marketing for San Rafael, CA-based consultancy Lenser, said her firm has been working with clients on ways to minimize the impact for the past several months. Among the options she and her colleagues have been recommending are maximize page counts, reducing paper weight, and comailing.
“Just like we’re taking a multichannel approach to customers, we’re taking a multitask approach to mitigating the impact of this,” Salmon said. “These are terrific changes for everyone in the industry, but merchants will not stop mailing catalogs.” Salmon added that in this rate case, it’s a matter of the industry hoping for the best and preparing for the worst. “We’re not sure where it’s all going to end yet or where it’s really going to shake out,” she said. “But over the next few months, people have a lot of work to do. Nothing will be sacred [when it comes to finding ways to absorb the extra costs]. There are no sacred cows on the table for this one.”