Holy smokes, the price of a stamp is going up again on May 12th. Get ready to dish out 42-cents to mail a 1-ounce first-class letter, 59-cents for a 2-oz first-class letter and 27-cents for a postcard (you can see all the rate increases on the U.S. Postal Service website). The Post Office is blaming their 1-cent increase (after a 2-cent increase in May 2007) on a decreased volume of mail and an increase in fuel costs.
Well, what do you know? People are mailing fewer things. I wonder why? Hmmm.... What could it be? I just can't put my finger on it. Of course, there's email, faxing and scanning which certainly takes away some need for mailing things, but that just can't be it. There must be something else. What is the missing piece of the puzzle?
All joking aside, what the heck is going on here? It doesn't take a rocket scientist to realize that it simply costs too much to mail anything these days. Even my mother who is completely internet un-savvy now pays all of her bills online. You can only push people so far with price increases until they'll find other ways to meet their needs. It's just common sense.
That's not to say the rising fuel costs aren't also playing a part in the Post Office's $700 million loss in the second quarter of the fiscal year. Is there no one who isn't suffering from high fuel costs? Those people seem to be working for fuel companies or in the White House while the rest of us struggle to pay to fill up our gas tanks each week. Of course, that hasn't stopped people from driving their massive SUVs, but now I'm going off on a tangent that's completely not related to marketing anymore.
So that brings me back to marketing and how the recent increase in postage will affect direct mail. Certainly, large companies will continue their direct mail campaigns enjoying postage discounts as they can, but the budget for postage can only grow so much. Adjustments to the direct mail strategy will have to be made.
And what about small and medium-size businesses who can't take advantage of postage discounts as much as large companies will huge mailings can? That's who will suffer most from a marketing perspective due to the postage increase.
What do you think?
I completely agree and would love to see a report somewhere that describes where the Post Office spends all the money they're making. I can't recall if they're still subsidized by the federal government or if they're completely privatized. Anyone know the answer? Maybe it's time to switch back to the Pony Express.
Posted by: Scott | May 12, 2008 9:10 AM | Permalink to Comment