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Interview Part 4
Q Getting back to cost issues,
are you saying marketers shouldn't be concerned with
costs?
A Of course
they should be ... I really want to make the
distinction between spending whatever it takes to
bring in a qualified customer at an acceptable cost,
versus cutting expenses that will only have a
positive impact to the bottom line. They are two
very different dynamics.
When it comes
to finding ways to cut costs, I have a good one to
share with you.
Just recently, I was working with a large
publisher that was sending their premium fulfillment
packages out First Class at a cost of about $2.50
each. I
was able to show them how to re-configure these
packages so they would qualify for Periodical Class
rates. Their
postage cost went down to about 35 cents per
package, a savings of over $2 each! And are you
ready for this … the company sends out one million
of these packages each year!
Q That's a
great strategy for publishers, do you have any cost
savings advice you can give to direct marketers in
general?
A One of the
few cost areas for mailers that has actually come
down significantly over the years is address
processing, commonly referred to as merge purge. To process a
typical merge purge complete with postal
qualification, test panels, sequence numbers, etc.,
mailers should not be paying more than $6 per
thousand net in the mail. Companies
that mail in the millions should pay even less! Plus, your
service bureau should bill you using a simple flat
per thousand mailed price, instead of a slew of unit
prices. This
will ensure this expense stays controllable and will
greatly simplify the paying and reconciling of
invoices.
I have observed
that many mailers aren't really sure what they pay
for processing because of unit pricing, and they are
surprised to find out they end up paying from $10 to
$15 per thousand mailed. Recently,
one mailer I helped in this area was able to cut
their annual address processing costs by $150,000
and, at the same time, add valuable new processing
techniques that I introduced to them.
Continue to Part
5 >>>>
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