Postal rates are changing. We all know that by now. "Shape-based pricing" went into effect on May 14, and the increase for automated worksharing business mail will soon follow. The Postal Regulatory Commission (PRC) chose to balance the budget by changing rates in favor of the consumer, leaving business mailers "holding the bag" when it comes to covering the increasing USPS operational costs. The single-piece rate has gone up from 39. to 41. (a 5.1% increase), while the rates for automated worksharing business mail percent of increase is on the rise for every sortation category with increases up to 10.4%. And, rightly so, it hasn't made business mailers too happy. But maybe just maybe the PRC shot itself in the foot. They had not yet heard of the term "TransPromo."
A Way Around the New Rates
One thing the PRC did propose and accept was a lower cost for each additional ounce of mail (almost half of what it would be to mail separately), which gives businesses that can come up with a strategy for combining its transactional documents with its marketing materials a decided opportunity. The advent of "shape-based pricing" comes from the fact that large (typically 9" x 12") letters are hard to sort automatically, unlike letter-sized envelopes that fly through the machines. From a purely economic standpoint, it makes sense that the prices of the larger envelopes are going up. But, interestingly enough, the cost of the second ounce of First-Class letters is actually being lowered. It's been a long time since we could mail anything for 12.5., but the second ounce of any mailing piece will cost just that as will the third ounce, if you choose to use it. Which means the word TransPromo a catch-phrase for mixing transactional and promotional documents in First-Class mail may quickly become a common business term.
TransPromo in Action
The big buzz in the document industry is the adoption of a TransPromo strategy when it comes to ongoing business communications with customers. There is a great deal of opportunity in developing a plan that puts additional marketing pieces and promotional messages into statements, bills and other transactional documents. First-Class mail gets opened and bills get reviewed which means you have a captive audience for the marketing messages you spent a good deal of time and money developing.
Businesses like utilities and telecommunications companies have been taking advantage of this concept for several years, even without a name attached to it. Most people have already received TransPromo materials in their private mail, like the special offers for cell phone deals that arrive with your regular telephone bill. But TransPromo can also involve highly personalized documents to get even better mileage in terms of calling attention to special, one-week-only offers or sales on only certain products. The secret behind this is to use all the information that you already know about your customers information that is in your database and other customer-related files.
To put a TransPromo strategy into motion means combining the customer name and address database with other customer information files, like sales history, as well as with promotional text and applicable graphics. The mix can create timely and relevant marketing materials that go out with the monthly bill or statement, all in the same package or even on the same pages. An example of this would be a department store inserting a sales coupon for toys with the monthly credit card statement of a customer who regularly buys toys, or sending news of a sale at a particular local store to customers who live in the nearby area. With the right type of software, these messages can be highly personalized, can reflect the customer's particular interests and can also be printed directly on the billing statement instead of being a separate item, saving even more on paper and postage.
The advancement of digital print technologies and the software on the market today that facilitates the ability to use variable data to fully personalize documents makes it possible to combine these two types of communication vehicles more cost-effectively than ever before. Instead of plain black and white, spot color can be used to highlight certain information in a document, and even full color can be used to print graphics or even photographs. Customer information can be gathered from a variety of sources to mix marketing messages and transactional content so that the message will address the customer's individual tastes and situation. This type of relevant messaging has proven to have greater impact on customers and has generated higher response rates than typical one-size-fits-all promotional direct mail.
It's All Good
TransPromo isn't limited to retail sales, either. Insurance companies have used it to present and explain complicated ideas like benefits or claims procedures to their policyholders. You can use it to tell certain customers the big spenders, the homeowners, the newlyweds, etc. about whatever new products or services might be available to them in particular, or to remind a late-paying customer that you accept credit card payments. All of the above can have the beneficial result of adding to your bottom line. And with the new postal rates, it makes further economical sense to add that newsletter or insert and use the white space on the monthly statement to your advantage.
You can use TransPromo to get out information in a timely way and with a high level of personalization that shows your customers you know them and are working hard to serve their individual needs. It's a very effective way to build a relationship with customers, generate customer loyalty and get maximum results from your marketing dollars. And now, thanks to the PRC, you can send those marketing materials for less money that it would cost to send them separately. The PRC set the rules of the game. So let's play.
Harry Stephens is President/CEO and founder of DATAMATX, one of the nation's largest privately held, full-service providers of printed and electronic billing solutions. For more information about DATAMATX, visit www.datamatx.com.