Direct mail is a traditional marketing channel that can achieve impressive results. Although you may think the design, digital printing and materials are the most costly aspect of direct mail, it is in fact the postage costs where businesses see their highest costs. However, there are postage discounts out there if you know where to look. In this blog article, we're navigating postal discounts for direct mail campaigns, presenting you with the strategies to reduce your postage costs and increase your return on investment (ROI). Given that campaigns that include direct mail are 52% more likely to report ROI benefits, maximising your savings on postage is crucial for calculating your profit margin and securing a competitive direct mail quotation.

• Postage Costs in Direct Mail

• Understanding Postage Discounts

• What Postal Discounts Are Available?

• Other Ways to Reduce Direct Mail Postage Costs

• Postal Discounts with DMS

Postage Costs in Direct Mail

Postage costs are likely to make up most of your direct mail campaign costs. It is therefore important to understand the associated costs and the strategies in which you can save on postage expenses, as they will have a direct impact on the success of your direct mail campaign.

When navigating postal discounts for direct mail, it isn’t always about finding the cheapest way to send out your mailers. Instead, it’s about getting the most out of your direct mail campaign, ensuring every penny invested works hard.

Understanding Postage Discounts

Postage discounts are incentives put in place by postal services, such as Royal Mail, to encourage businesses to use certain mailing methods and follow certain requirements to make the mailing process more efficient. These efficiencies often involve pre-sorting mail by postcode, which significantly reduces the manual handling required by the postal provider. Often referred to as Bulk Postage Discounts, it allows businesses to take advantage of a discounted postage rate if they send a certain volume of mailers or meet other requirements. For instance, many of the deepest discounts start at minimum volumes of 4,000 items, highlighting the immediate benefit to high-volume senders, as detailed in this comprehensive guide to direct mail discounts.

Businesses can therefore reduce their campaign costs, improve their ROI, and perhaps allocate more budget to other areas of their campaign. It is therefore important to understand postage discounts, especially for smaller businesses with limited budgets.

What Postal Discounts Are Available?

There are several types of postal discounts available in the UK, each with its own requirements and cost-savings.

Advertising Mail Discounts

Advertising Mail is a service provided by Royal Mail that offers substantial postal discounts of up to 15% for marketing communications sent via direct mail, such as catalogues, brochures, postcard promotions and flyers. Incentives within advertising mail change throughout the years and there are often new incentives that come along to benefit businesses and organisations. For example, specific volume incentives are often available for the charity sector during key fundraising periods. Currently, there are the below incentives targeting various business types and direct mail scenarios, all with their own criteria.

• Catalogue Incentive
• Testing & Innovation Incentive
• First Time User Incentive
• Advertising Growth Incentive

Partially Addressed Mail (PAM)

An increasingly popular method for achieving postal savings is Partially Addressed Mail. This allows marketers to target demographics at a postcode level without using specific names and addresses, making it a powerful, privacy-compliant prospecting tool. By reducing the data preparation requirements, it qualifies for attractive postal discounts and has proven highly effective: a recent Royal Mail study noted that the channel has seen a significant uptake, outperforming some completely unaddressed door-drops in terms of response rate. This provides an excellent balance of targeting and cost-efficiency.

Economy Mail Discounts

Economy Mail is another service that is designed for non-urgent mail. This is beneficial to businesses sending out non-time-sensitive mailers, as they can benefit from reduced postage costs, as they will be sent with a longer delivery window, such as 3-5 days.

To be eligible, mailers must not require urgent delivery and there will be a minimum send volume that needs to be adhered to in order to qualify.

Mailmark Discounts

Mailmark provides discounts for businesses that use a more sophisticated barcode system. This barcode system enables better tracking and reporting so businesses can also better monitor their campaign performance as well as receive postage discounts. Mailmark is the latest generation of franking and can currently save businesses 10% against standard franking and 34% against post office/stamp pricing. Furthermore, the enhanced reporting features are invaluable for sophisticated marketers looking to fine-tune their campaigns; read more about how to leverage this data in our guide on A/B Testing in Direct Mail Techniques That Drive ROI.

To qualify, all mailers must include Mailmark barcodes and the minimum volume requirement also needs to be met.

Other Ways to Reduce Direct Mail Postage Costs

As well as the above schemes and incentives there are other strategies to reduce costs and navigate postage discounts.

Clean Up Your Mailing Lists

Having accurate and up-to-date mailing lists ensures you are not sending to old addresses or those with spelling mistakes, making them undeliverable. Undeliverable direct mail is a waste of money for a company and will negatively impact your response rates and ROI. Ensuring your data is ‘clean’ and accurate is key to saving on postage costs, making services like data capture essential for maintaining list hygiene.

Plan Ahead

Planning ahead and ensuring you are not rushing your direct mail campaign is the best way to avoid mistakes. Unlike an online article, a mailer can’t be amended or retracted once it has been printed and sent out. Ensuring it is all correct will save you postage costs in the long run and helps you better align your mailing schedule with your wider strategy, as discussed in How to Align Direct Mail with Your Marketing Funnel.

Segmentation

Segmenting your audience is key to saving on postage costs. You only want to send your direct mailer to recipients whose message is relevant. Therefore, sending your direct mailer to your entire database may not be appropriate, as some may not be the right target audience for your particular message. Segment your audience by gender, age, interests, location and buying behaviour, to make sure your message gets in front, and only in front of the right people. For advanced techniques on how to create highly responsive segments, see our guide on How to Segment Your Mailing Lists for Higher Engagement.   

Compare Sizes

Size matters in direct mail! Compare the cost of sending different mailers, as the cost difference can be significant. Although a bespoke-sized direct mailer could be distinctive and memorable, it may be much more expensive to send compared to a regular postcard size. Therefore you'll need to weigh up whether the design is worth the increased cost, a decision that often involves balancing the choice of paper stock and finishes with the final postal bracket.

Embrace Unsubscribers

Although no marketer wants to see high unsubscribe rates in their database, there is an argument for embracing unsubscribes. This is based on not wanting to waste money on sending a mailer to a recipient who doesn’t want to receive it and is not going to respond. It is therefore best practice to give recipients an option to opt out from receiving direct mail if they wish.

Use a Professional Direct Mailing House

Navigating postal discounts for direct mail campaigns can be a minefield, especially with new incentives coming into play and with so many options out there. Working with a professional direct mailing house is a recommended way to fully benefit from postage discounts, and be confident you are receiving the very best price. This expertise is particularly vital in the digital age, where direct mail’s response rates are demonstrating its enduring relevance.

Because of the large amounts of mail direct mailing houses send, they are also likely to benefit from even greater postage and bulk discounts than if you sorted them in-house. Leave it to the experts and save time, money and effort by letting a direct mailing house, like DMS, take care of the postage costs, finding you the most cost-effective solution. Our knowledge of the constantly evolving postal landscape ensures your campaign achieves maximum deliverability at the minimum cost.

Postal Discounts with DMS

At DMS we are experienced in all types of direct mail as well as the latest incentives and postage discounts available. We will find the most cost-effective solution for your campaign. We also have great relationships with both UK and international postage services and will pass out discounts to you.

Find out more by speaking to a member of the team on 0117 934 1600.