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August 2001: Volume 43, Number 8

The Cost of Getting It There -- Rising Postal Rates Equal New Strategies
by David H. Martin

Rising newspaper ad rates, combined with postal rate increases, may force water improvement dealers to turn to e-age alternatives for generating consumer leads. What going concern can raise prices when business is falling off? Apparently, newspapers and the U.S. Postal Service (USPS) are rare exceptions.

Knight Ridder, the nation's second-largest newspaper chain, recently announced it was raising ad rates in the face of declining circulation and ad space sales. Independent newspapers are raising display ad rates in response to declining classified ad revenue.

The USPS is in financial free-fall, facing a projected $1.6 billion to $2.4 billion shortfall this year. With the rise of electronic (email) messaging, critical mail volumes are falling, postal costs are increasing at a pace never before anticipated and postal officials warn of additional increases on the horizon.

Postal rate increases

Last month, a 1.6 percent postal rate hike went into effect on top of January's 4.6 percent increase. Now the USPS is preparing to file another rate case in October 2001 that could raise postage by as much as 15 percent. Although rates for a one-ounce first class letter remain unchanged at 34 cents, each additional ounce has increased from 21 cents to 23 cents. Postcards, increasingly popular with dealers seeking sales leads, have increased a penny to 21 cents.

Robert Wientzen, president of the Direct Marketing Association (DMA), predicts that a lot of commercial mailers will begin prospecting on the Internet because it's becoming too expensive to do so through the mail. A recent DMA study conducted among its members projects direct mail will represent 34.7 percent of consumer sales by 2005. Newspapers, says the same study, will total 15.7 percent of consumer sales. Both figures represent declines from 2000 numbers.

Declining service

Last May, speaking before the U.S. House Committee on Government Reform, DMA members urged lawmakers to halt rate increases that were hurting their businesses and driving customers away from the USPS. The DMA mailers called for Congress to force the USPS to seek ways of reducing costs to cover budget shortfalls instead of rate increases.

Some postal watchers have blamed the impending deficit on poor management practices. Rate increases and a proposed curtailment of Saturday delivery would do the USPS more harm than good, mailers testified at the hearing; and higher rates and less service will drive postal users away. Postal reform, perhaps including privatization of USPS, may help stem the red ink and spiraling rates while improving service.

Gene Del Polito, Ph.D., president of the Association for Postal Commerce (also known as Post.com), urges small business owners to contact their representatives and senators in Congress about the need for postal reform to stem additional rate increases. Post.com's home page is http://postcom.org

Electronic USPS service

In the spirit of, "If you can't fight 'em, join 'em," the USPS is promoting that its website permits businesses to electronically mass-transmit documents, correspondence and newsletters to lists of recipients. Geared toward small businesses, the service involves regional printer/mailers. Businesses can use the service to send self-mailers and postcards, as well as letter-size documents. Unit mailing costs are about 50 cents for a one-page document, sent first class. Printer costs are included.

Last May, the USPS also announced it's joining forces with Microsoft bCentral, a provider of small-business services on the web. "The small business market is the fastest-growing market in America," said USPS spokesperson Gerry Kreinkamp. "And this market is probably not aware of the business solutions the postal service has available to help them develop and retain customers."

Integrating techniques

If the USPS can embrace e-age integrated marketing through its Netpost web-based service, why shouldn't you be exploring other ways to generate leads and stretch your marketing dollar? With rising newspaper advertising and traditional mailing costs, it might pay to look at newer means to at least supplement more familiar marketing media.

Today, more than 51 percent of all U.S. households have a personal computer and 60 percent of adults have access to the Internet at work or at home. Email marketing is the least expensive way to reach prospects or past customers who have provided you with their e-mail addresses.

With the cost of traditional mail increasing, you might want to test replacing "service reminder" postcard mailings with less costly email reminders that it's time to change filters, have salt delivered, etc.

Can't beat 'free'

But to do this, as mentioned previously in this column, you must first begin to build your custom "opt-in" email list. One way to capture "permission-based" email names and addresses, is by staging "free drawings" at community home shows and other events.

Another technique for building your list is to invite prospects to register for drawings on your company website. This, of course, will require that you first have a website—then promote it in your newspaper ads and mailings. (Are you beginning to see why we call this "integrated marketing"?)

Before building your website (or, better still, having it done professionally), be sure to look at lots of other websites, including some sponsored by other water improvement dealers. While going through this learning process, be sure to ask other dealers you meet at industry meetings and trade shows, if you can check out their sites. Don't forget to ask each to share his or her experiences with online marketing techniques. Ask, "What worked? How did it work? What didn't?"

And before you venture into email marketing to prospects and customers—take time to read and analyze the email you personally receive, over a period of at least several weeks. (You'll get a sense what appeals and motivates you, or offends you.)

For starters

Once you've gotten your feet wet with a series of non-threatening "service reminders" sent via email, it will be time to experiment with brief email messages that inform or present product offers. An informative email might alert prospects about a local water issue (or other environmental issue). A specific product offer should be presented directly in brief sentences. Both should end with an invitation to click on your website hyperlink embedded in the email. Include a "free" incentive for "registering" at your site.

Soon you'll be experienced enough to experiment with a longer format, sometimes called an "e-newsletter." Like a printed newsletter, it will give you the opportunity to address multiple subjects and engage in "image building" as well as making product offers. Be careful not to get "wordy." List the subjects covered, in a series of short bullet points, just below the subject line and headline. In this longer format, you have the option of including multiple links to your website, thus dramatically improving your chances of a click-through.

Future of web marketing

Will web marketing replace all other marketing? Not in our lifetime. That's why you need both print and computer-based media in an integrated marketing campaign. For example, you might plan to follow a postcard mailing with two email messages containing the same offer, in a one-two-three sequence to run over three consecutive weeks (Don't forget faxes for business customers). Remember that affordable frequency is a key to getting results. And make sure your online and offline advertising speaks with one voice for maximum synergy (1+1=3).

Consider using customer testimonials in all communications, online and offline. They create credibility in every case. Some other reasons print ads and mailers won't go away soon are:

• Printed ads and postcards are portable,

• Both are perceived as "more personal" than email, and

• Coupons or rebate offers are more likely to be redeemed in a print ad or mailer than online.

Conclusion

Rising costs of traditional media make integrated web marketing more attractive than ever to dealers on limited budgets. But don't expect Internet marketing to eliminate printed marketing materials anytime soon. It's not a case of one or the other—but both.

About the author
David H. Martin is president of Lenzi Martin Marketing, of Oak Park, Ill., a firm specializing in water improvement and environmental marketing that integrates old and new media. He can be reached at (708) 848-8404, e-mail: newage@mediaone.net or website: www.lenzimartin.com