Historic postage price drop to free up ‘16 DM testing dollars

With pricier postage already built into most 2016 direct marketing budgets, an upcoming postage price cut from the United States Postal Service will allow for augmented testing in the direct marketing channel this year.

“As the historical data and common sense support, the Postal Service anticipates that mailers will alter their mailing patterns after the removal of the exigent surcharge is announced in order to take advantage of the impending lower prices,” according to a recent notice from USPS to the Postal Regulatory Commission.

USPS informed the commission that effective April 10, it will remove its more than two-year-old exigent surcharge. The Postal Service put the 3-cent postage hike into effect in January 2014 to help the agency recover from the Great Recession. As of mid-February, USPS had collected more than $4.3 billion of the $4.6 billion in surcharges allowed by the commission.

“While the Postal Service recognizes that daily revenue fluctuations could result in a one- or two-day variation on when the revenue limitation is reached, our current estimate is that the revenue limitation will be reached some time on Saturday, April 9, 2016,” according to the USPS notice.

Once USPS officially removes the surcharge, the price of a first-class stamp will drop from 49 cents to 47 cents. Assuming no postage-related Congressional action between now and April 10, this will mark the first drop in postage prices since 1919.

“SeQuel has long fought to offset rising postage prices,” said SeQuel’s VP of Data & Analytics, Scott Anderson. “Our proprietary change-of-address hygiene services pick up where NCOA and PCOA leave off, further reducing wasted postage and optimizing every mailing list. Plus, the primary goal of our proven hybrid testing methodology is to stretch limited testing budgets, maximizing our clients’ learnings and chances of finding a winner quickly. When you combine these capabilities with the upcoming postage relief, 2016 is shaping up to be a banner year for our clients’ DM programs.”

 

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