While important Postal Reform measures have replaced the previous and somewhat erratic system of setting rates for business mailers with something more predictable, it can’t eliminate the rising cost of fuel and other factors behind this latest increase. And, although the rate affects all classes of mail, fully automated business mail is taking the bigger hit.

Based on postal reforms enacted in The Postal Accountability and Enhancement Act of 2006, postal rate increases now are tied to the Consumer Price Index, with a CPI Rate Cap of 2.⁹ percent. For all classes of mail, the average rate increase is not supposed to exceed this percentage. In May, the single piece stamp rate went from 41 cents to 42 cents, setting prices up 2.⁴⁴ percent, which is still 0.⁴⁶ percent under the CPI Cap. However, for business mailers that provide the largest volume of automated bar coded three- and five-digit mail, the rates will increase by 3.⁵⁹ and 3.⁸⁵ percent, which is 0.⁶⁹ percent and 0.⁹⁵ percent more than the CPI. This turns a minor rate increase into a major one for high-volume mailers, and for everyone who does regular billings, that adds up.

Until companies can convert all their customers to electronic billing and payments — and the numbers to date simply don’t support the public suddenly embracing this change — smart billers will have to devise new and creative mailing strategies to stretch their budgets. The good news is, there is a viable solution emerging.

Mixing Transactional and Promotional Documents

A concept called TransPromo is gaining popularity. It can be an important part of a business mailing strategy, particularly given the attractive economies of first-class mail. TransPromo is the mixing of transactional and promotional documents in a single first-class envelope or an online bill page. It is becoming a common and smart business practice for some of the largest billers in the country, including telecoms, utilities, health care organizations, financial institutions and banks.

Most of us already receive some type of TransPromo mail pieces, such as advertisements that accompany a department store credit card bill. However, TransPromo is effective beyond lowering the cost of delivering advertisements. For one, it gets a better response. First-class mail gets opened and bills get reviewed. You have a captive audience. By placing messages directly on your customers’ bills, you can take advantage of prime real estate to call attention to time-sensitive offers, to cross-sell or upsell certain services, such as bundled telephone and Internet service, or offer tips on maximizing cell phone usage.

The main secret to an effective TransPromo strategy is to use all the customer information in your address database and other customer-related files to create business communications that are truly relevant to the recipient. Today’s software makes it possible to parse customer data and link it back to core systems that combine transactional information with marketing messages that reflect the recipient’s individual tastes and interests. You then can leverage the information you have on a customer to get much closer to their needs. And printing this information directly onto the billing statement instead of having to design and produce a separate ad results in lower paper and printing costs.

Giving up traditional inserts does not mean you have to give up on creativity; transactional documents don’t have to be plain-vanilla, functional statements anymore. Affordable digital print technologies make it possible to combine the regular monthly statement and marketing communications using spot color more cost effectively than ever before. Spot color can be used to highlight certain information in a document, such as an overdue balance, and full color can be used to print attention-grabbing graphics or photographs, which have been shown to have a greater impact and generated higher response rates than a typical one-size-fits-all promotional direct mail piece.

TransPromo documents don’t even have to be printed. Electronic presentment of a bill can be integrated with multichannel marketing communications. Although experience to date shows slow adoption rates for electronic billing, eliminating even 10 percent of printing and mailing costs by switching to electronic billing can translate into significant cost savings. Electronic TransPromo documents can be designed to match the printed items so customers feel comfortable migrating to electronic media and don’t have to navigate through unfamiliar formatting. And, of course, electronic bill presentment is another way to add revenue with easy-to-access offers for online buyers and to sidestep the postal rate increases.