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What Can We Expect From the 2012 Rate Adjustments? Part II

December 22, 2011

In my previous post I discussed some of the expected elements to the 2012 Consumer Price Index increase. In this post, I will discuss some of the elements I did not expect.

The Unexpected

There was one important element to the rate adjustment proposal that was very welcomed, and that is the Second Ounce Free plan for First-Class Mail®. Even though this might not make much sense when one focuses on the pure profit-growing objective that the Postal Service is trying to reach, there is great potential in this. In talking to some major First-Class™ mailers, they are approaching it with caution but are also optimistic because it could mean expanded business opportunities.

Having access to a second ounce at no additional fee can be extremely beneficial to mailers. For example, they can use the extra ounce to include additional marketing materials that will help them bring in additional revenue. In turn, given the return they are seeing on their investment, there’s a chance those mailers will invest extra money in more mailpieces. Furthermore, with this extra space, mailers will have more opportunities to experiment with ways to tie direct mail in with electronic communications, inserting materials that leverage the mobile barcode, personalized URLs, and more. These, too, show great promise in growing business, and can strengthen the value of direct mail as well.

Will it truly slow the accelerated decline in First-Class Mail? The USPS sure hopes it will, as do we, since First-Class Mail is the largest contribution margin to the Postal Service.

Stay tuned to learn how I expect these changes to affect Bell and Howell customers. Until then, you can review some of the expected changes in the BCC Solutions November eBulletin.

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