How to Reduce Direct Mail Postage Costs

11 May, 2018

How to reduce direct mail postage costs

 

The UK retail industry is having a tough time – retail sales fell by 0.5% in Q1 2018. Many retailers are negotiating new deals on their property portfolios – or even closing stores.

In a challenging market, smart retailers need to increase efficiency and reduce costs. Marketing must optimise ROI, and ensure that the right cross-channel strategy, data analytics and campaign activity is in place.

One way to reduce expenditure is to review your postage costs. Direct mail remains a key part of many retailers’ strategy, with personalised, targeted mailings providing strong returns. In fact, a survey conducted by Kurt Salmon reported that 86% of women aged 18-30 say they have bought an item after seeing it in a catalogue.

With evidence like this print is set to remain a key tool, complementing digital activity. So here are 8 tips to reduce postage costs and optimise your campaign ROI.

 

1 Plan, plan, plan

The chances are you already know when your seasonal peaks and campaigns will be through the year. This is crucial for postage costs too, as some forward planning now can save money later. When you map out campaign timescales think ahead about duration and formats too.

As you plan campaigns always consider formats, as this will drive which postal service you can use. The aim is to make your campaigns targeted, relevant and interesting. But to reduce spend you also need to constantly question – if we change the format will we still be able to utilise the best postal services? What can we change to maximise our cost savings?

Forward planning in this way can significantly reduce costs.

 

2 Database management

Cleansing your database is one of the easiest ways to save on direct mail postage.

Data cleansing consists of reviewing your list using specific criteria to remove incomplete and undeliverable addresses, duplicate entries, and deceased contacts.

In this case, you are removing the entries in your list that will not reach a potential customer. Many tools are available to compare your list against (we manage this process for clients). By removing the direct mail pieces that are redundant you also reduce fulfilment and mailing costs.

Also consider asking for your customer’s contact preferences if you don’t have them. This will be good practice under GDPR, and if you know that they prefer email, communicate via that channel instead. They will receive the medium they prefer and you will save on printing and postage.

By regularly cleansing your list you will increase the deliverability of your mailing and further increase the ROI for your campaign.

 

3 Send targeted, personalised mailings

Much like database management, targeting your mailings is not only good practice and will lower your postage costs in the long run but Segmenting your list, and mailing specific groups with targeted offers, will provide better results – remember one size does not fit all!

Quality over quantity holds true – by mailing smaller targeted groups you can tailor messages based on purchase behaviour, location and preferences. Offers should be data-driven and relevant to the customer, resulting in a higher conversion rate with fewer pieces mailed.

 

4 Design for direct mail

Direct mail comes in all shapes and sizes with countless options available. However weight, size and format remain the key factors to determine postage cost.

While large and unusual formats may catch the eye, simplicity and good design can also reap rewards.

  • Stick to standard size envelopes and postcards to minimise postal costs and ensure that your mailing is cost efficient
  • Be mindful of paper stock, and get a sample if you are using a heavy stock to weigh it out and calculate costs

By combining a more streamlined direct mail piece with digital activity you can significantly reduce postage costs. For example, using AR techniques or digital in tandem gives customers the chance to request a catalogue or more information – and you know that it will go to someone more likely to order from it.

 

5 Learn the lingo

Postage can be quite confusing when trying to understand the services offered, even more so when dealing with VAT. Having a postage expert sourcing this for you will enable you to get the best deal (we oversee this for clients). Costs can vary significantly from each provider so it’s worth getting to grips with the industry options:

  • Numerous licensed postal and parcel carriers
  • Multiple weight and format criteria
  • Business mail
  • Sorted and Unsorted
  • Priority, Standard and Economy services
  • Signed for, tracked, guaranteed, and standard
  • Many sector-focused services including retail

As well as Royal Mail there are numerous Down Stream Access (DSA) providers who offer a wide range of postage services. Each has different requirements, delivery times, and benefits, so look at the goals of your mailing to select the best fit.

With our extensive knowledge, we also help clients to secure Postal Incentive Schemes for testing and growth. These are ideal if you are thinking about trialling direct mail or running a campaign; as you can test a scheme tailored to your needs.

 

6 Consider co-mailing

Another way to save postage costs is to share the mailing with other businesses. This won’t always be suitable, but if you are working with other organisations and affiliate programmes it’s worth considering.

You can combine mail from two or more parties into a larger group for delivery, enabling postal discounts that you may not have otherwise been eligible for. This works best for SME businesses and non-profit organisations to achieve larger savings.

 

7 Use a mailing expert

Although it sounds counter-intuitive, employing the services of a mailing expert can save you money. While you will pay for the supply of envelopes, letter printing, insertion and collation etc., these costs can be recouped with the postal discounts that they can secure.

Mailing houses gain attractive discounts from postal providers due to their volume of use, and also benefit from bulk buying consumables such as envelopes, paper and ink – savings passed on to you.

In addition, they have the right tools for the job – saving you time and further resource costs. A mailing specialist will have the most efficient and cost-effective way to pack your mailing. Fulfilment time can be reduced by using machinery designed for the job, ensuring a fast and professional finish.

 

8 Track responses

Every mailing will generate a small proportion of returns; whether people no longer wish to receive mail or due to a change in data. If possible capture why the packs are returned. This will help you to learn more about your target market and customers.

Ensure that all returns are updated within your marketing database, closing the loop for more effective comms next time. This continuous cycle is crucial to achieving an engaged customer base who want to hear about your products and ensures you are GDPR Compliant.

 

These tips will help you to reduce postage costs and optimise your mailing. We work with a number of high street retailers on data management, customer strategies and campaigns, and can manage this process on your behalf.

 

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Read more > 7 Ways Personalisation Will Boost Your Marketing Strategy

 

> Contact us to find out how you can better optimise mailing costs. Call Nicki on +44 (0)20 7846 0004

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This post was written by Relativity Intelligent Marketing and published on 11 May, 2018 at 1:38 pm