Postal hike doesn't hurt direct mailers

CNY Business Journal (1996+), Jul 12, 2002 by Fitting, Beth

Although the National Federation of Independent Business has projected an additional cost to small business of $1 billion and the loss of 5,000 jobs, direct mailers say that the postal increase will not hurt their business. Thomas Quartier, president of Quartier Printing Co., when asked if the increase would affect his business, replies, "Not necessarily. It's still a cost-effective marketing tool." Quartier is a 35-year-old printing company that entered the direct-mail business "about 10 years ago," he says.

David Osborn, chairman of Lettergraphics, another Syracuse firm in the direct-mail business, says, "it had people concerned, but they've talked about it for so long." He adds, "We haven't noticed a difference. Looking ahead, it's no big thing." Osborn says that people are more alert, and have cleaner mailing lists. "in summer, mail drops off," he explains. "That's why the post office did the increase at this time." In the fall, Osborn predicts, there won't be a real change. "The additional charges were built into budgets when the talk [of the increase] began in January. Everyone thought it would be a 10-percent increase, but it's actually less than 8 percent across the board." Osborn adds that there are 43 new rates, depending on how many pieces, and how many in each zip code, are being mailed.

Lettergraphics handles about six to seven million pieces of direct mail a year. It runs the mailing lists through its computer. "Most mailings go out at four different rates," he says, adding that the average size of a mailing is 5,000 pieces. "We run the customer's database through our software, and it comes out sorted by number and rates. We just have to handle the mail after that."

Osborn does warn, though, that "within six months," a new regulation will be published in the Federal Register concerning undeliverables. The present regulation for first class, Osborn says, requires direct mailers and their customers to check for undeliverables in 180 days. "People get around that by putting 'address correction requested' in the corner," he says. But the new regulations will require "a completely clean list," especially for first-class discounts. The discounts to which Osborn refers are for mail that is pre-sorted. "The post office spends $1.5 billion a year on undeliverable mail," says Osborn. The new regulation "will eliminate that cost, pass the savings on to the customers, save taxpayer money." There is a concern, advises Osborn, that the new regulation will include third-class and bulk mail.

Robb D'Apice, owner and general manager of Clinton-based Presto Print Center, says, "Most customers will continue to use direct mail, although they might cut back. I don't have a crystal ball, but I don't think it will have an effect on bulk mail. There's nothing like bulk mail for marketers who want to promote specialty products. Although D'Apice has been in the printing business for 20 years, "we've been in bulk mailing for two years."

"The post office is changing," he says. "We work with the main post office in Utica, and they're helpful. They want to work with mailers." D'Apice says that the post office Web site is "user friendly" for direct mailers. "We can certify and guarantee addresses." The software to do this, he says, "is not as expensive as it used to be." His company spends $1,000 a year to keep up to date with software. Presto Print has five employees, and provides, says D'Apice, "design, copy, print, and mail" services, specializing in small and medium-sized jobs. "This is the information age," he says. "Yes, the price increases will hurt, but they will not stop direct mail. Bulk mail is the future of the post office. It's so effective people will continue to spend money on it. It's still a vibrant industry."

Osborn predicts that "there will a reduction in generosity of business-reply mail. It will be less used." He refers to mail that includes a return-mail envelope that is pre-franked. "Unless there is a big volume, it costs nearly $1" for each envelope "37 cents for the stamp plus a new fee that is nearly 60 cents." At 3,500 pieces a year, a volume discount reduces the price of individual mailings, Osborn says. "But even then, it will cost 55 to 60 cents" for each business-reply envelope.