Monday, March 7, 2011

This Micro Study of One Direct Mail Piece Raises Macro Questions

Production Solutions in Vienna, VA, did something interesting. They took a current mail piece and calculated how much it would have cost to produce the same piece a decade ago (in 2001).

Guess what?

The cost to mail a test package today appears to have fallen 17% below the cost to mail the same package ten years ago. Why? Because savings inherent in data processing, personalization, and mailshop fees offset rising costs in every other area of operations.


• Technology has saved us some dollars and definitely enabled more personal, targeted, effective marketing.

• In the days ahead, ratios will shift adversely if the cost of manufactured materials goes up (paper, ink, window patch material, labels).

• Rising postage costs would squeeze margins, possibly out of existence. What will mitigate that? Can technology improvements and controlled labor costs offset the trend? So far, no … but technology delivers exponential surprises every day, so let’s not give up.

• For now, the real budget killer appears to be energy, gasoline in particular. Business owners also must deal with the rising and fixed energy costs inherent in plant operations. Again, innovations in technology may help us deal with super-charged gasoline and electricity prices. On the other hand, water could prove to be a problem most haven’t thought about.

• And then there’s the cost of labor. As states across the country try to regulate and repress wages and benefits for millions of American workers, the cost (and availability) of labor becomes vastly uncertain. Enter the influence of trends in the world economy, import/export practices, and even climate change (think paper production, for example): more uncertainty.

Whether or not one or more of these particular expenses skyrockets or plummets depends on a range of macro influences. Unforeseen technology advances and innovations in the areas of manufacturing, printing, lettershop, and even marketing itself could make us all rich (well, okay.. prosperous). In 2001, none of us really understood how huge email marketing and online shopping would be ten years later. We didn’t even know about QR codes or smart phones back then. So what will the world look like in 2021?

Perplexing, yes? ….. Perhaps direct mail production and marketing operations would benefit from a “Crazy Day brainstorming session” to encourage employees to “imagine the future” … leading maybe to some long-range thinking and planning, focused "out-of-the-box" on staying nimble, quick, responsive, and open to the coming deluge of change. I’d love to hear from readers!

In the meantime, thanks to Production Solutions for its thought-provoking article.

--scrubbed by Marketing Brillo

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