…postage rates are going up again!

Yes, indeed, on July 14, the cost of a first-class letter will increase five cents from $.68 to $.73. The cost of a postcard will increase three cents from $.53 to $.56. This means first-class has increased by 62.2% and postcards have increased 75.0% since 2012, as shown above (clicking here will open a larger image in a new window).

What does this mean for your utility?

For starters, if you didn’t budget for this increase in postage, expect your budget to be stretched even tighter.

Coupled with increased delivery times that were implemented in October of 2021, it now costs considerably more (and takes longer) for bills to be delivered to your customers than it did a few years ago.

What can we do about it?

If you aren’t already outsourcing the printing of your bills, you can start there. The 2024 Utility Staffing Survey revealed that many of the less efficiently staffed offices are still printing bills in-house.

Many smaller utilities think outsourcing is out of their price range when, in fact, it has become increasingly more economical in recent years. Most outsource printers will combine your bills with all the other mail they are sending that day for the best possible postage discounts. Many outsource printers can also send ebills, which is especially helpful if you have a billing system that doesn’t offer this functionality.

Encourage more customers to switch to ebilling

Another way to offset the increasing cost of postage is to encourage more customers to move to paperless billing, also known as ebilling. For every customer that elects ebilling you not only save the cost of postage, but also the cost of forms and envelopes. One way to get more customers to opt in to ebilling is to offer incentives to do so.

What will it cost to switch?

If you’re interested in finding out what it would cost to move from printing bills in-house to outsourcing, I have a calculator on my website that will help you. The calculator will also let you know what percentage of your customers would need to opt in to ebilling to offset the cost of moving to outsourcing.

What about customers mailing payments?

Of course, the increase in postage also impacts your customers who still mail a check to pay their bills. Some of these customers will invariably look for other options rather than paying more for postage. What you don’t want them to do is decide to come to the office to pay, rather than mailing their payments.

You can encourage these customers to sign up for bank drafts, pay online, or use their bank’s online banking to pay their bills. If you’re concerned that customers using their bank’s online banking will just lead to more mail, please check out this post.

Are you operating as efficiently as possible?

Is your utility doing all you can to be as efficient as possible? If you’re not sure, please give me a call at 919-673-4050 or email me at gary@utilityinformationpipeline.com to learn how a business review could help you find out.

© 2024 Gary Sanders