Postage Cramp

How are entrepreneurs handling the average 7.6 percent postal rate increase that took effect May 14? On average, first-class letters and cards increased 6.9 percent; standard advertising mail, 9.5 percent; parcel post, 16.6 percent; priority mail, 13.6 percent; and express mail, 12.5 percent.

The U.S. Postal Service is encouraging mailers to consider cost-saving options, and one entrepreneur who has taken that advice to heart is Renee Miller. As president and creative director of the Miller Group, a Los Angeles-based advertising agency with annual billings of over $1 million, Miller does a lot of direct-mail programs for her national clients. Due to the rate increase, she's changing plans. "We're limiting some mailings to oversize postcards and maximizing the creative messaging," she says. "We're also using targeted e-mails to supplement mailings and sending non-time-sensitive mailings standard instead of first-class."

John Schulte, president and chair of the National Mail Order Association, says there are limited choices for mitigating the cost of postal increases. "If you're already mailing at the lowest possible cost for automation, you can [send] less, change the size and/or weight of your mailing and make your mailings more precise and targeted," he says.

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Companies using direct mail in their sales and marketing campaigns "will certainly feel the pinch," says Jim Blasingame of Askjim.biz, a knowledge-base website for small businesses. However, the fact that many entrepreneurs now rely on e-mail will soften the blow. "This postage rate increase won't influence businesses as much as it [would have] previously," says Blasingame. "The explosion in electronic communications has significantly decreased small businesses' use of postage."