Friday, March 5, 2010

USPS Eliminating Saturday Delivery Could Impact Response Rates

By Jennifer Spitzer

Even if you’re not in the direct marketing industry, by now you’ve probably heard that the USPS plans to submit a formal request to the Postal Regulatory Commission (PRC) to reduce mail delivery from six to five days a week, eliminating Saturdays. I believe this change will eventually happen… after all, they’ve been hemorrhaging money for years so they have to do something, and they can’t keep cutting retiree benefits. But, keep in mind that it will take an act of Congress to make this happen so I encourage all of you to not hold your breath while we wait.

I had to laugh today as I read an article suggesting that marketers may see a reduction in postal costs as a result of this major change. Given that the elimination of Saturdays is expected to save about $2 billion annually and the USPS lost more than $3.8 billion* last year, I think we’ll be lucky if we can maintain both standard and first class rates through the end of 2011 before they request another increase from the PRC.

Companies that utilize direct mail to generate sales from both new and existing customers will need to adjust, and marketing agencies will need to help. If you use a mail specific or “in-home” postal endorsement date (which, by the way, the USPS is not required by law to honor), you will need to take that into consideration when you plan your mail date.

As a direct mail marketing agency, I’m not as concerned about adjusting to the change as I am in regard to the impact it may have on response rates for those who don’t adjust.

Each year the USPS conducts a consumer Household Diary Study (HDS), which surveys over 5,200 households each year. A portion of the study reports consumer attitude toward direct mail. (Go to www.usps.com/householddiary/welcome.htm to download a PDF of the most recent HDS report). In a nutshell, households with higher incomes receive more advertising mail than lower income homes and the more they receive, the less likely they are to look at everything.

Here’s what I think could happen as a result of the elimination of Saturday delivery. First, for marketers normally targeting Saturday as an in-home date, there will be a push to reach mailboxes earlier. Consumers may notice an increase in the amount of advertising mail they receive just prior to the weekend. Everything that isn’t delivered by Friday will wait until the beginning of the following week, thus loading up mailboxes on Monday and Tuesday.

If you’re in-home on the same day as everyone else, your mail piece is going to have to work harder to get attention and this could have a negative impact on response rates. Keep a close eye on this when Saturdays are eliminated and think about adjusting your mail schedule so you can be in-home on days when mail volume is light.



*In November 2009, the USPS filed its 2009 year-end financial results and reported a net loss of $3.8 billion. Several blogs I’ve read quote the loss as $2.8 billion. So, there’s a discrepancy floating around out there but hey, it’s just a billion.

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