In previous blogs, I've maintained that EDDM is a valuable service for many local businesses. However, it's also important to look beyond advertised postage rates of different mailing classes. If you don’t, you will soon be weighing apples against oranges. The services and requirements associated with EDDM, Saturation Mail, Marketing Mail and First-Class service need to be considered when making a choice because each has unique benefits that translate to substantially different costs. Let's look at some differences.
It’s vital to keep an eye on the real or effective postage rates it takes to reach your desired target audience. That’s the true apples-to-apples comparison and a key ingredient in the ROI calculation.
EDDM and Saturation Mail are cousins with a few different rules, postage rates and benefits. Like EDDM,
Saturation Mail bypasses much of the USPS automation processing infrastructure.
Technically, Saturation Mail is not called “bulk mail” but you must purchase a permit and renew it annually in addition to paying for postage. Like EDDM, Saturation Mail is a service where you do much of the work for the USPS. In return, you receive lower postage rates for what the USPS calls “work sharing.” For example, Saturation Mail pieces need to be taken to the local post office that will be delivering to the carrier routes.
In addition, and this is important, to streamline the USPS’s workload, you must sort your pieces in “walk
sequence” to receive the best postage rates. In other words, they need to be in the order the postal carriers actually walk through their route.
Saturation Mail does not require that you deliver to every household within a carrier route but it is close because you are required to deliver to 90% of residences or 75% of residences plus businesses. This is known as the 90/75 Rule.
Saturation Mail allows you to exclude 10% of residences which means you can target a little more precisely.
However, as we saw with EDDM, there may be a considerable amount of RRDM households which will negatively impact ROI.
Your desired target audience may be considerably less than 90% of the households. For example, in a real-world scenario I presented in a previous blog, only 29% of the households within the carrier route met the age criterion which means a lot of postage would simply be wasted on RRDM.
For years, the USPS offered a lower cost alternative to First- Class mail called “Standard Mail.” Very recently, this was rebranded and is now called “Marketing Mail.” The reason Marketing Mail is less expensive is because mailing pieces are not forwarded if a forwarding address is not on file with the USPS and undeliverable mail is not returned to the sender.
This saves the USPS money since they don’t need to process in these two situations. In addition, there is a savings for work sharing. Specifically, if you were mailing by yourself, you would be required to submit a minimum of 200 pieces. However, because mail service providers are allowed to comingle their customers’ orders, marketers can almost always submit orders that are fewer in piece count.
In the following table, you can see a side-by-side comparison of the effective postage rate for the real-world scenario I've used throughout this EDDM series.
Surprisingly, in the scenario, EDDM has the highest effective postage cost. The Saturation Mail effective postage cost is lower but RRDM has a significant impact on both mailing methods.
Marketing Mail has the lowest effective postage cost because there is no RRDM or waste. What’s especially striking is that 162 more households or 52% of the carrier route would need to meet the target audience criteria for EDDM’s effective postage rate to be as low as the Marketing Mail effective rate.
In the case of Saturation Mail, 136 more households or 49% of the carrier route would need to meet the target audience criteria to have an effective rate as low as Marketing Mail.
This simple analysis should cause us to remember that spending money on RRDM is a waste of money that can be put to better use. Also, it leads to a discussion of other elements to direct mail that may impact ROI and whether there are hidden costs or missed opportunities.
Do you have questions about EDDM or other direct mail methods? Download our guide, Is Every Door Direct Mail Right for Your Business? to learn more.