New Postal Rates Miss Real Issues

(EMAILWIRE.COM, April 25, 2007 ) Los Angeles, CA – New postal rates are fairly straightforward but fail to address the real issue of how to increase postage revenues as a whole over the long term. Increased rates instantly increase sales revenue per unit. However, higher postage leads to a decrease in overall consumer demand for services as well as a shift in consumer demand from direct mail to competing services such as email, e-cards and online catalogs.On May 14, 2007, a new postage rate plan hits all mailers regardless of mail volume. The a few highlights of these new rates are:Regular 1st class letter stamp will increase from 39 to 41 cents perRegular 1st class postcard stamp will increase from 24 to 26 cents perStandard A – known as bulk rate- letters will increase a little over 2 cents1-ounce parcel will increase from 52 cents to $1.132 ounce flat (like a catalog) will increase from 63 cents to 97 centsA reason for the big price hike for catalog-like mailings is to provide incentives or penalties for mailers based on the actually mail shape in hope that mailers will become more efficient. For example, if a mailer mails a few pages in a 9x14 envelope at 1st class rates, each piece would cost 97 cents. The mailer would be penalized an extra 34 cents per piece under the new rate plan.But by switching to a 5x11.5 envelope, the mailer can expect to pay 58 cents per piece vs. 63 cents per before the rate increase. This 5-cent savings will pressure mailers to adapt and change the size configuration of flat mail to maximize postal discounts.As for the increases in letter, postcard and bulk rates is obviously to increase the USPS revenue but at what expense. The USPS reviewed the cost of mail processing and determined that postage cost should better reflect the actual cost associated with mail processing.It is this Direct Mail expert’s opinion that the Post Office has too many MBA’s and analysts focusing on misguided ways to generate more postage revenue. This will eventually lead to a decrease in the mail volume by individual consumers as well as businesses who will continue to opt for email and internet alternatives to direct mail. These USPS continues to overlook these three items:1. Increase rates leads to a decrease in demand. Individuals and businesses will look to snail mail alternatives such as emails, e-cards and e-catalogs.2. We have a new generation of consumers that rarely experience the joy of receiving an actually personal, handwritten letter or greeting card.3.In the eyes of the consumers, mail is perceived as only a tool for businesses to send bills, notices or advertising.The USPS can increase postal revenues by increasing demand for its services. This can be done by a public awareness campaign playing on the joys of receiving a handwritten letter from your grandparents, student away a college, best friend from life or from the our President.In short, the USPS can increase consumer demand for their services by increasing the social value of a personal letter. This will increase the USPS overall sales revenue. ###Mark Ward is available for media requests and interviews, please contact him directly at 818-301-1759.Mark Ward is the Sr. Executive VP of direct mail services for PharmDirectMail.com - a division of America Direct Mailcom. He works directly with Healthcare professionals to provide innovative direct mail solutions for leading companies. Clients include Boston Scientific, Amgen, Genetech, Healthnet and others.Contact: America Direct Mail .com12444 victory blvd #200, N. hollywood, CA 91606 Phone: 818-301-1759 Website: http://www.pharmdirectmail.com###This press release was issued through GroupWeb EmailWire.Com. For more information on press release distribution, go to http://www.emailwire.com.

Prabhu Balakrishnan

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