A Mailer's Take on the State of Catalog Mailings, Part 1

In its commentary on this last rate increase, however, the PRC made specific comments regarding the failure of the advertising flats classification to cover its attributable costs. This comment should serve as a warning to catalogers that we may not fare as well in future rate-setting decisions.

CS: Why is this?
AA: In its 2005 commentary, the old PRC published very similar language, leading to a massive cost increase for all catalogs in the 2006 rate case. As a result, catalog mailing costs went up dramatically in mid-2007. The stars are aligned for another large and broad increase for catalogers.

CS: What can the catalog community do to address the concerns voiced by the PRC?
AA: The entire cost attribution methodology for mail was developed with little or no input from the catalog community. Because of our lack of participation in this process, many “close calls” may not have gone our way. As an industry, catalogers must understand what those cost attribution rules are and then begin to challenge those that we may disagree with while working with the USPS to reduce the costs of handling our type of mail.

CS: If the Postal Service's proposal for a "summer postage sale" for standard mailers is approved and implemented, how might Paul Fredrick change its mailing plans to take advantage of this?
AA: Since we've been aggressively moving customer acquisition spending from the mail to other types of media, we'd have to add 100,000 catalogs to our current plan just to meet the threshold formula set by the USPS. I don’t see that happening, so the USPS sale won’t have any impact on our business.

Paul Fredrick recently joined the American Catalog Mailers Association, a catalog-owned, catalog-controlled and catalog-focused trade association. For those who want to see the policy process in action, I’d encourage fellow marketers to come to the ACMA Forum, May 20-21, in Washington, D.C., and get a front row seat to public policymaking in action.