Cooperation Reduces Impact of Rising Costs 

Posted on Jun 15, 2021


By Michael Shepard, CEO
Pioneer Utility Resources, WordSouth and ARC Media 

Michael Shepard

Inflation and the U.S. Postal Service. Both have been in the news. A lot. 

As your communications partner, we pay particular attention to any trends that could affect your communications and marketing costs. The latest headlines on mailing costs going up, the rising price of paper and other inflationary pressures may sound scary, but be assured we are working on your behalf to mitigate the impact. Here is what we know and how we are responding. 

 

Postage Rates Rising 

Burdened by rising costs, pension deficits, aging equipment and shrinking First Class mail volumes (among other things), last month the USPS began seeking the Postal Regulatory Commission’s approval for, essentially, across the board rate hikes. Once the proposed price changes gain expected final endorsement and are implemented in late August, the cost of the kind of mailing we do on your behalf will have risen 10-11% from where it was at the beginning of 2021 

That’s significant, for sure, but it is important to remember two things:  

  1. The overall cost of your magazine or newsletter program is not going up by 10 to 11%. Postage only represents part (though a substantial part) of the overall cost of your printed communication program. A 10% increase in postage may mean a 4% or less increase in your overall program costs.
  2. Postal costs can be managed. Knowing how to achieve the best postage rates has long been a core competency for us. Our 2020 acquisition of WordSouth, a content marketing company in the electric and broadband space, added to our expertise in this area. As USPS increases are becoming reality, we’re redoubling our commitment to helping you pay the lowest possible postal rates by taking advantage of in-county, walk sequencing and saturation rates. We will continue to work with our members to cut postage waste, making sure address lists are free of duplication and address errors.  

Our postal expert, Publications Administrator Linda Wiseman, works closely with our utility members to manage postage costs.  

By routinely cleaning magazine mailing lists and using intelligent mail bar codes to manage returns electronically, our team is on track to save utilities more than $40,000 in postage costs this year.  

Correct mailing lists are critical for utilities who want to avoid postage penalties.  

“Cleaning address lists is not a once-and-done project. It’s a constant process that starts with making sure each address is recorded correctly on day one,” Linda advises. 

Pioneer’s guide, How to Keep Address Lists Clean, outlines common issues and solutions. Linda often sends flagged problem addresses to utility staff, hoping changes caught by Pioneer staff will help utilities cut postage waste for other business mail. First class mail has a proposed rate increase of 6.8%, too.  

“Clean lists will help keep costs down,” Linda says. “Take the time. Do it right.” 

 

Paper, Staffing and Other Key Cost Drivers 

Postal rates are not the only costs going up. As I write this, news is breaking that inflation is suddenly rising at its fastest pace in at least a dozen years. For our communications co-op, that’s manifesting in many places, but most clearly in the price of paper. Since late in 2020, we’ve seen a series of moderate rate hikes at some of our printers. We anticipate further paper price increases of around 4% as early as July. 

While it is too early to tell how these and other inflationary pressures might impact our prices to you in 2022, I have good news.  

The efficiencies we continue to find in the wake our extraordinary growth, combined with our ability to command better pricing in many areas due to our buying power, mean that for the moment we can absorb the cost increases.  

As a result, we do not expect rate changes in the second half of 2021. You have my word that as we begin the planning and budgeting process for 2022, we will continue our long tradition of doing everything within our power to keep your costs stable and low while maintaining an extraordinary level of quality and personal service. 

 

What You Can Do 

The power of our co-op is the way we work together to meet new challenges. Thanks for taking time to learn what’s coming and how we can manage the impact by working together. Remember: 

  • We can help. Please, please reach out to me, your account manager or magazine editor if you have questions or would like us to assist in taking a fresh look at your mailing lists. 
  • Print remains powerful. Remember that every survey we have seen confirms that print communications remain the foundational piece of any good utility consumer engagement strategy. Your investment in print is worth every penny, even if those pennies add up to a few more dollars. 
  • Inflation impacts everyone. Your customers and members are likely contemplating the impact of inflation on their own budgets. We’d love to help you craft messaging around how your organization is efficiently managing costs for the benefit of those you serve. 
  • Increase your digital reach. Given our increased ability to distribute your critical messaging across multiple channels, there’s never been a better time to ramp up your digital reach. If you’re not yet leveraging social mediawebsite services and targeted digital advertising from us, you’re missing out on some best-in-the-industry services.  

As always, thank you for choosing Pioneer Utility Resources and our family of companies as your communications partner. We deeply appreciate our relationship and your patronage.

Questions or suggestions? Send them to hello@pur.coop 

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