The recently unveiled 2024 growth incentives from the United States Postal Service (USPS) present an opportunity for marketers to reevaluate and optimize their 2024 mailing plans. With the potential to boost First-Class and Marketing Mail volumes, these incentives can be a game-changer for organizations aiming to maximize their marketing budgets and mail smarter.

This article provides an in-depth overview of the USPS growth incentive programs, dissecting their intricacies and demonstrating how savvy marketers can leverage these initiatives to optimize their expenditure while elevating their campaign outcomes.

Uncovering the Unseen: Why Mailers May Overlook These Incentives

Mailers might not realize the availability of these promotions, which is likely due to several dynamics. First is that the growth incentive is a departure from traditional promotions and marks the first of its kind since 2010. The focus is on rewarding real and sustainable growth, making it particularly attractive for smaller mailers or those new to the media channel.

Second is that the target audience for these incentives is the small- to medium-sized mailers who may not necessarily be deeply engaged with trade associations or current activities in the industry. This segment often includes individuals or organizations that are not in regular communication with the USPS, making it imperative to raise awareness about these opportunities.

Unraveling USPS Growth Incentive Programs

The USPS growth incentives consist of two identical programs — one for First-Class mail volumes and another for Marketing Mail volumes. To access these incentives, customers need to register during the registration period, which is open until June 30, 2024.

To qualify for the incentives, mailers must agree to a baseline volume they mailed during the USPS 2023 Fiscal year (October 1, 2022 to September 30, 2023). If a mailer exceeds this baseline volume during the growth incentive program period (January 1, 2024 through December 31, 2024), they become eligible to receive a 30% postage savings credit on their incremental volume, over the baseline. This presents an excellent opportunity for mailers to test and implement direct mail strategies from a marketing perspective with that incremental growth.

Mailers can register for these incentives through the USPS Mailing Promotions Portal, which is accessed via the Business Customer Gateway (BCG), with registration having opened in November 2023 and closing at the end of June 2024. The earned postage credits can be utilized not only in 2024 but also through December 31, 2025, depending on a mail owner’s growth plans.

Complementary Aspects of Growth Incentive for 2024 Postal Savings

· The Growth Incentives are not promotions but rate incentives: This means that it can be applied over and above the promotions a mail owner may already be planning for as part of their postal optimization strategy.

· Emerging and Advanced Technology Promotion: In 2024, the USPS is introducing a unique aspect to the emerging technology promotion. Unlike fixed promotion periods, mail owners can now customize their six-month period, aligning it with what works best for their company or specific lines of business within their organization. This Pick Six feature enables use of the promotion and postage savings during six consecutive months throughout 2024. This flexibility enhances the potential impact of the promotion for more seasonal oriented mailers.

· Containerization Discount: Marketing mailers can leverage a containerization discount for SCF level containerization, as it saves on USPS handlings from cross-docking, even if it's entered locally. This provides a dual benefit of improved service and potential postage savings.

· Network Remodeling Efforts: The USPS is undergoing a full-scale remodeling of its network, which promises to deliver significant changes. I encourage mailers to stay involved, be open to opportunities, and become active in local groups like your Postal Customer Council (PCC) to stay informed on changes and opportunities.

· Mitigating Postal Price Increases: In addition to leveraging commingling and postal promotions to mitigate the impact of biannual postal price increases, don’t forget improving the quality of address files. Reducing Undeliverable as Addressed (UAA) volume is crucial for ensuring deliverability and optimizing marketing dollars. Eliminating one to three percent UAA volume can have a big impact on your marketing budget and ROI with the mail channel.

· Volume Considerations: The growth incentive doesn’t have volume caps, enabling even smaller mail owners or those new to the mail channel to participate. A mail owner must exceed their USPS-agreed to baseline volume or one million pieces in 2024 to have volume that is eligible for the growth incentive. Postage credit for volume growth exceeding the baseline is calculated at an enticing 30% of the net postage paid, factoring in any eligible promotion discounts in 2024.

Strategic Steps for Maximizing Savings

Now, the next pressing question for marketers is likely, “How can I optimize my planned postage spend using these programs?” Below are several key steps to guide marketers through the process:

1. Know Your Baseline Numbers

Embark on a journey to gather all volume information by meticulously tracking class and company-owned Customer Registration IDs (CRIDs) from both internal and external mail service providers. This foundational step lays the groundwork for understanding the potential impact of the growth incentive on your bottom line.

2. Dedicate Time for Data Collection

Data collection may vary in complexity. Some organizations may find it straightforward, while others might face intricacies in understanding applicable CRIDs and mailing methods. While time-consuming, this process is pivotal in identifying units with the potential for volume growth and, consequently, incentive advantage.

3. Familiarize Yourself with Modeled Numbers

Project your postal spend numbers forward, factoring in rate increases scheduled for January 2024 and another expected in July 2024. A 30% postage credit offers marketers a significant opportunity to mitigate the impact of these increases, potentially reducing the direct mail channel's Cost per Lead (CPL) and Cost of Acquisition (COA) by six to 20% or more.

4. Explore Mail's Channel Mix Opportunities

Consider the unique advantages that mail brings to your channel mix. With its measurable results, omni-channel compatibility, and hyper-personalized possibilities, mail stands out as a highly effective medium for reaching target audiences. Enhanced return on investment from qualifying growth incentive volumes could be the boost your 2024 marketing plans need.

With some planning a marketer can leverage these opportunities to:

• Test new creative strategies
• Integrate mail components into digital-only efforts
• Expand cross-sell and upsell endeavors
• Explore new emerging markets
• Address customer churn
• Build upon successful elements within your mail channel

Closing Thoughts: Investing for Big Results

Navigating the potential of these growth incentive programs prompts me to ask: Isn't it better to invest a little more than initially planned to drive substantial results in your mail channel efforts for 2024? For marketers who agree, you will find that the USPS and your mail service providers are ready and enthusiastic about assisting in evaluating this new opportunity and helping redefine what's possible through mail in the year ahead.

Unlocking savings through the USPS growth incentives demands strategic planning, data-driven insights, and a forward-thinking approach. By aligning your baseline numbers, understanding the nuances of the programs, and envisioning the impact on your marketing mix, you can turn these incentives into a catalyst for transformative results in 2024.

Bob Rosser is Director, Postal Affairs, Products and Services for IWCO. Bob has been with IWCO for the last 19 years. He leads the postal optimization strategies for IWCO clients that achieve in-home targets at the best possible postage rates. Bob’s in-depth automation, data, and postal operations experience also helps ensure that mail packages meet specifications. He subscribes to the innovation philosophy that the best way to predict the future is to help create it. He currently serves as the Mailers Technical Advisory Committee’s (MTAC) Industry Immediate Past Chair and sits on the Board of PostCom and DTAC, and is actively involved with the National Association of Presort Mailers (NAPM). For more details Bob can be reached at bob.rosser@iwco.com

This article originally appeared in the January/February, 2024 issue of Mailing Systems Technology.