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ROI of Direct Mail Increasing, Even With USPS Postage Rate Increase
June 9, 2022

ROI of Direct Mail Increasing, Even With USPS Postage Rate Increase

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Stephanie Donelson

According to the Gartner 2022 CMO Spend and Strategy Survey, marketing budgets are up this year, about 3% compared to 2021. With that increase in budget, marketers using direct mail as a tactic should prepare for a slight increase in postage rates by the USPS.

The rates were approved by the Postal Regulatory Commission (PRC) which means starting July 10, 2022, the new postage rate for a First-Class Mail Forever stamp will be 60 cents, compared to the current cost of 58 cents.

Other price increases include: each additional ounce for a single-piece letter would be 24 cents, the one-ounce price for metered mail would be 57 cents, and a postcard stamp would be 44 cents.

Why is the USPS raising postage rates?

The USPS is an essential part of our everyday lives but it generally receives no tax funding for its operating expenses. It funds its operations through the sale of postage, products, and services.

The current price increase is a reflection of rising inflation and operating expenses as the USPS delivers on its promises in the Delivering for America plan.

Impact on direct mail marketing costs

When it comes to direct mail pricing, there are the three Ps you need to consider: Printing, postage, and production.

Lob’s inclusive pricing accounts for printing and postage costs, and our automated platform helps reduce production costs by routing it through one system. Lob operates on a fixed pricing model so our customers get the best per-piece pricing because of Lob’s high volume and pre-negotiated rates with the printers in our network. In fact, some of our customers have reported 85% cost savings by increasing operational efficiency with Lob.

Marketing spend: Direct mail is worth the investment

The State of Direct Mail reports that 67% of marketers say direct mail delivers the highest ROI of any channel they use. The report goes on to cite that when email is combined with direct mail there’s an increase of 60% in ROI and a 40% increase in conversion rates. That means even with the postage increase, our two cents is that direct mail marketing is a worthy investment for marketers who want to cut through the digital noise or establish a new touchpoint in their marketing journey.

We’ve seen our customers achieve 200% ROI with direct mail marketing and investing a few extra pennies per mailpiece is worth it. Curious what direct mail could do for your business? Schedule a demo and find out!

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