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Non-prime marketing - Going the extra mile

National Mortgage Professional
Dec 21, 2005

Demystifying direct mail: What mortgage brokers need to knowJustin Andrewsdirect mail, marketing, USPS You've got mail and plenty of it to send out to potential borrowers ready to pump up your pipelines. After hours of brainstorming a creative campaign and testing your data lists for accuracy, you're ready to drop your mail and start making more money. The copy is catchy and the design is dead-on. You've invested a considerable amount of time and money into getting the campaign just right and you're anticipating a great return on your efforts. You depend on direct mail to help keep the blood flowing and the hearts beating at your shop, so what happens when direct mail is unpredictably delayed, nearly causing a full-on arrest of your operation? Besides telemarketing, direct mail is the motor that runs most mortgage brokerage shops vying for those coveted leads, which are harder and harder to come by. With the dreaded Do Not Call list imposing growing restrictions on lead generation, reliance on direct mail is even greater. And the reliance is more than justified. According to the United States Postal Service (USPS), the average American spends more than $244 million on goods and services advertised through snail mail. But recent prolonged delays with unpredictable, standard, third-class mail have left many a broker biting their nails as they wait for the mail to hit and the phones to start ringing. Before the anthrax scare following 9/11, bulk mailings took an average of only seven to 10 days to land at their destinations. Now it can take upwards of 30 days for mail to arrive. And who has time for that? Speculation runs high about the reasons for these delays. Perhaps it can be attributed to the USPS Office's Mail Evaluation Readability Look-up Instrument (MERLIN), a tool used by the USPS to assist with the acceptance of business mail. Or maybe it has to do with the size and color of the bulk mail. Whatever the case may be, we do know that there are no longer any guarantees with standard third-class mail. Granted, opting for standard (or bulk) mail means relinquishing total control of delivery time to receive deep discounts on postage rates. The post office is able to offer bargains on bulk mail because it is processed at USPS' convenience. And that means it typically can take anywhere from five days up to more than a month for your mail to arrive at its destination. Vital to the survival of many brokerage shops that rely on direct mail is smarter mailing the need for consistency and predictability. To circumvent the deliverability delays and subsequent lagging leads, be sure to consider the following strategies for your next direct mail drop. Bar coding One effective method of speeding up mail delivery is to have your mail bar-coded. By bar-coding (or automating) your mailings, it will make its way through the USPS more quickly, as it's processed on high-speed postal sorting equipment. Postal pre-sorting In a perfect world, delivering direct mail would be as easy as placing a stamp on an envelope, dropping it down the chute and away it goes. Unfortunately, the world isn't perfect and sending direct mail isn't easy. It's a complex beast that requires the sender to adhere to the USPS's 600-plus page manual full of rules, regulations and procedures. This includes postal pre-sorting. More than a systematic way to group mail for efficient handling, it hastens delivery times and offers postage savings. The best way to exercise presorting is to partner with a provider that extends Presort Accuracy Verification and Evaluation (PAVE) certified software. This will help arrange your list in USPS-specified order to produce labels or files that guarantee your mail is in full compliance with the standard third-class mail regulations, while ensuring the lowest postage rates on your mail. Commingling Essentially, commingling merges multiple streams of mail from different senders into a single mail stream. Significant postal discounts can be had with the right combination of high-volume mail jobs shared with other companies. In order to receive a five-digit zip code postal discount, USPS requires a minimum of 150 pieces of mail that target the same zip code. By commingling runs, distributors increase the likelihood of meeting the 150-piece target, thus acquiring significant savings. A caveat about commingling: Once you begin the process, it's nearly impossible to stop. Halting a commingling job can only be done by hand. What's more, by pulling your commingled job, mailing rates for all jobs combined to create the single stream would alter. In effect, you would unfairly raise the postal cost for parties who remained commingled. The moral of the story here is to not commingle if there is even the slightest possibility of having to discontinue the job. Drop shipping By employing both drop shipping and commingling to your direct mail campaign, you increase your savings even more. In its simplest terms, drop shopping refers to trucking mail to a postal facility near its point of entry. USPS grants you discounted postage by work-sharing with you. The deeper into the postal system you first process your mail, the deeper your discounts. In other words, the closer to the final destination that your mail enters the USPS system, the less postage you pay. Simply depositing your direct mail at the local post office subjects your project to go through some rebate-reversing rigmarole. Typically, your mail will start at the local post office, be handed off to the local section center facility (SCF), then be passed on to the bulk mail center of the destination, after which it will be forwarded to an auxiliary service facility and then it will be delivered to the destination SCF, and finally your mail will reach its desired destination. Mail is delayed from three to 72 hours at each of these drop-off points. But by drop shipping directly to the destination SCF, you would capture a three to five day gain on getting your mail delivered more quickly. PLANET code/smart seeding Smart seeding is a mechanism to track mail by assigning a PLANET barcode to each tray of mail (rather than printing codes on every piece of mail) to monitor its progress through the postal system and thus allow you to allocate appropriate staffing needs when the mail hits. The assigned code gives the customer real-time knowledge about where the mail is in the mail stream. Whenever mail with PLANET codes is processed, electronic records are generated and sent directly to the sender or can be accessed online in the "Mail Tracking and Reporting" section of the USPS Web site, www.usps.com. First class mail As we've already established, standard third-class mail is unpredictable. Pinpointing delivery timeframes can be tricky, as they differ greatly, even within the same mail stream. If you have up to 30 days to spare for your mail to hit, than standard mail is the way to go. However, if your campaign is time sensitive, then first class mail is going to be your best option. Though it carries a higher premium, it offers the best cost/benefit ratio as your mail delivery is guaranteed. These are just a few strategies to consider before planning your next mail drop. The best advice you can take is to invest in working with an experienced direct mail vendor who is thoroughly versed in direct mail best practices. By working with an experienced mail vendor early and often, you'll save yourself a huge headache, not to mention time and money. Justin Andrews is vice president of marketing and one of the founding members of Merit Financial. He can be reached at (800) 720-6299 or e-mail [email protected]
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