Meet the Mailers: How to Offset Upcoming Postage Increases

In this episode, I talked with Chris Lien, Executive VP of Industry Affairs for BCC Software. Based in Rochester, NY, BCC Software offers a family of comprehensive postal software solutions, as well as a range of in-depth data marketing services.

Early on, we talked about Chris’s advocacy involvement in the National Postal Forum and Mailers Technical Advisory Committee. But we spent much of our time discussing how mailers can control their costs during a time of postage rate hikes.

As Chris said:

Among the topics we covered:

• Chris’s 30-year+ mail industry background
• BCC’s presort & data quality services (plus how to keep up with new movers)
• Advantages of using BCC Mail Manager
• Why he calls Informed Delivery a game-changer
• Trends in direct mail

Here are some questions and answers from our conversation (edited for clarity and space):

• Chris, let’s just address the elephant in the room. What can mailers expect for postal increases in 2024?
  

Well, Paul, unfortunately, much of the same that we’ve been seeing really since August of 2021. You know, the Postal Service has been leveraging fully the pricing authority that the Postal Regulatory Commission granted to them. Postal Regulatory Commission did a 10-year review after the Postal Accountability Enhancement Act was enacted in 2006, which effectively kept pricing at the Consumer Price Index level.

And we had really stable and predictable pricing prior to that. With that 10-year review, it gave the Postal Service additional pricing latitude. And we have seen a cumulative effect of 20-30% increases in postage in this twice-per-year cadence since August 2021. But to more specifically, answer your question, Paul, we are seeing about a 2% average increase for January, but July of 2024 – July is going to be a 7-9% increase. And, like I said, if you add that on top of that cumulative effect, it is significant. And we’re seeing many mailers responding to that.

• What can and what should mail owners, brands, and printers do proactively to ensure that a healthy postal system continues to function?

It’s a great question. I think the answer to that is: we need to tell our story.

We’ve got a great story to tell in print and mail because no other single channel of communication is as impactful as a direct mail piece. You know, I often say when you touch a piece of mail, it touches you back, you can feel it, there’s so much to it that just a digital-only platform cannot provide. So it’s really important for us to be able to talk about the value that a physical piece of mail has in its overall multi-channel communication opportunity. It’s important to talk about trust as well. A lot of effort goes into selecting names and addresses, preparing those names and addresses; a lot of money goes into preparing an effective piece of mail. This isn’t just randomly scattering out messages across the internet, it really is finally targeting somebody.

And then finally: new technology, Paul. This industry has rapidly advanced in terms of data and technology, we can track at such a high precision where that mail piece is on its journey. As it’s going out to the final recipient, we can strategically time messages to complement that mail piece. And we have an attribution story of direct mail that really no other form of marketing can match! We can definitively know that somebody has touched that mail piece. And some of the statistics out of the [USPS] Household Diary studies go a long way to help talk about how mail is used and received by the homes, people still trust the mail.

• One of the challenges in the industry, this big ecosystem, is talent, both attracting new people, as well as keeping current staff along the supply chain with up-to-date and relevant skills. So how does BCC support companies investing in these kinds of efforts?

Great point. I shared with you earlier that about a third of the attendees for the National Postal Forum were first-timers. And I had a chance to talk to a lot of them and talk to a number of my customers who are also working to bring new talent in. And I think it goes a little bit back to our saying is telling the story and helping young marketers understand that this is a very important channel. Print and physical communication is super important. And if we can get in front of that early enough by going to colleges and universities, by being actively involved, by putting together a mentoring program.

There’s something called Leaders Connect. You talk about the ecosystem, Paul – it’s a joint effort between MTAC, the Postal Customer Council, and the United States Postal Service to put together a mentor-mentee program to help bring in people to the industry, get them rapidly acquainted, build up a database of people that they can contact and leverage with it.

BCC has been doing that internally. We have a mentorship program that we’ve been doing. I’m working with my third mentee now. The first two, I helped them get positions and leadership within the industry, present at the National Postal Forum. One of my mentees has been coming with me to MTAC and getting to meet people and hearing it firsthand. And they’re really kind of evangelizing out to our colleagues what this industry is about. So I think it’s: tell the story, get involved, [and] look at a mentoring program. And I think you’re gonna find some pretty interesting talent that’ll come into this industry.

• Let’s talk about BCC Software. Can you just quickly provide an overview of all the services?

So BCC Software has really three areas that we help our customers: we’ve got data services that helps to keep the address complete, correct, and current or, what I call the “3C” approach to address quality. We have software that is used on-premise for our customers to be able to take that corrected name and address and sequence it in the right order to get postage discounts. We support a number of different-sized mailers and platforms and technology, from entry-level mailers to the largest mail producers in the world.

And then we have customer support. And while customer support is really something that sort of comes along with both the software and the services, it’s a very important differentiator for BCC Software, particularly nowadays. All of our customer support representatives at BCC are certified by the United States Postal Service as Mailpiece Design Professionals. So they don’t just know our software and their services, which they should. They know mail – and they know it incredibly well.

So, a lot of our customers view BCC as not just a provider or a vendor that they’re working with, we are an extension of their mailing operation. Again, the data: no other software provider licenses as much data directly from the U.S. Postal Service; we’re the direct licensee, so we can ensure that chain of custody, I mentioned the software is expansive. We support all classes of mail, including some of the very niche classes for Periodical and Media Mail. And then again, that support: keeping everyone up-to-date on what’s happening with it, and in this rapid-fire change with the Postal Service with so many different price changes, but also with the sortation changes to support the Delivering for America plan.

• We know that marketers who include mail in their mix of channels are facing challenges. What advantages does Mail Manager offer to its users?

So great, great question. And thanks for the opportunity to talk about it. I’m very passionate about postal mail, as you can probably tell. I’m also going to be one of the first to say it’s pretty complicated. It’s very difficult to prepare mailing, according to the Domestic Mail Manual of the Postal Service.

So what Mail Manager does is it really makes it easy for somebody that’s new to the industry, or somebody that’s been a veteran for a long time, to be able to effectively and properly prepare their mailings with it. It’s an intuitive step-by-step interface to bring in the list, and you can take in from multiple different formats, you can select with the list, which names and addresses or a subset that you want to mail to, you can personalize the messaging in there, you can sequence it, of course, it has direct access to all of our data services. So you can enhance the address, either correct it with USPS data as a trusted source or enhance the address with non-postal data like geocoding. So I can pinpoint just those addresses that are within a particular radius. And, of course, it does containerize the pieces after it’s pre-sorted those to get the maximum postage discounts possible, in many cases, 50% or more discount off of what you would pay at a full-service rate. And then all the barcodes and, and the tracking services to go with it.

So Mail Manager grows with your business. There’s an entry-level product, a mid-product that, as you add on options, and then our full-service sort of flagship enterprise product gives you the full breadth of mailing preparation. And we just recently, Paul, launched a companion interface to make it even easier for new market entrants to be able to get introduced to this wonderful world of mail, while still giving you the option to switch back to the more complete interface where you’ve got access to fine-tune everything exactly the way you want for your customer.

• At the beginning of our interview, you shared that mailers can do some things to offset the postal increases that are on the way. Can you tell our audience more?

Absolutely. And you know, yeah, those are scary numbers that I talked about, right? 3% increase in just the last year. And there’s a big hurdle coming up ahead, that 7-9%, depending on how you sort the mail, could even be more. July of 2024. A 9% postage increase is what I call the Do Nothing price. If you do nothing different than you’re doing today, then yes, that’s how much it’s going to go up. So you need to do something, right?

And so what are some things that you can do?

First of all, you can sharpen your pencil a little bit more in terms of postage discounts. And that’s what our customer support team can help our customers with, getting a better way to look at the postage sortation. But the other way that a lot of mailers are able to mitigate some of these price increases is with these promotions. The Postal Service’s doing promotions that give significant discounts, 5%, 3%, and even something that’s going to get a 30% discount that I’ll talk about in a minute, but just by doing something really simple.

I’ve got a sample piece here that I love. This is an example of a mailpiece where there’s a way you can hear the scratches on the outside. There’s a tactile aspect to it. And then when I open up the mail piece and it does a little pop up here, it’s interactive. And if I scratch the hot sauce, I can smell that, so it’s a whole multi-sensory experience with this. Mail pieces like this would get a 5% discount from the Postal Service. You can also even have something as simple as just having your mail piece tell the recipient to say a certain phrase …I think you know what I mean. But if you just say “hey, fill in the blank, tell me more about BCC Software” – that would get a discount. If the mail piece is glossy, it gets a discount, or if it’s personalized, it could get a discount. So there’s a whole host of different ways that you can drop that postage.

And then I mentioned before this big discount – 30% – that’s the mail volume discount. The Postal Service is going to allow mail owners that increase their mail volume in 2024 a 30% credit, actually on future mailings with that, so a lot of ways that you can do something, and we can help you with that so you’re not paying the high postage.

• What trends do you see for direct mail marketing in the next couple [of] years?

I see a lot more personalization. Marketers have access to much more data about people today than they did before. I think that we’re going to see more effective mail pieces. And what I mean by that are mail pieces that have addresses that are correct.

Marketers can’t waste mail on UAA or undeliverable as addressed anymore, so they need to make sure the address is deliverable. They need to make sure that the piece is effective and personalized. And I think they need to find a way to be able to continue to leverage that digital and physical together. It’s not an either/or, and you need to put those two together. But make sure that that physical piece of mail is getting the type of treatment and respect really that it deserves.

The attribution on direct mail is significant, and when combined, again, in a properly and astutely done multi-channel campaign, you’re going to see 20% response rates and higher, you’re going to have a tremendous return on investment and ROI that frankly, digital just cannot touch.

Here is our conversation (with all questions and answers). We’ve added timecodes for your convenience.

Thank you very much, Chris, for sharing your perspective and your expertise! To learn more about BCC Software, visit their website at www.BCCSoftware.com.

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