I'm not sure I'd agree that the margins are so tight that the ''junk mail'' industry would simply cease to exist if mailing costs were even slightly increased.Woody Guthrie wrote:This is how it works.
The DSA companies can charge less than we can because their systems are completely automated and what staff they do have are poorly paid compared to us.
As the DSA companies are already running on tight margins they cannot afford to absorb any increase in what we charge them without passing it on to their customers.
If they increase the cost to customers with the letters market and economy so fragile what will inevitably happen is a lot of these customers will look at other options like online billing, appointments and advertising because you're making it look less attractive to send out physical letters.
Instead of driving up our revenue you're actually driving it down.
In order for us to take back this kind of business in house and be competitive we would have to invest in the kind of fully automated cut price operation the existing DSA companies have and that would almost certainly be a separate business with a second tier workforce.
Be careful what you wish for.
I know someone who worked in marketing for a bank and they once told me that they needed less than 2% ''customer uptake'' from whatever they were offering in any given mailshot for it to be a profitable exercise.
I suspect that 2% figure applies across the board for all the usual junk mail suspects... Cotton Traders, Easylife, Chums, Sky, BT etc etc
You only have to look at the huge numbers of customers who pull their face and chuck their various catalogues and brochures straight in the bin without even looking at them and yet STILL these companies keep sending this stuff out to them despite getting no custom from them for years to see that these junk mail companies couldn't really care less about how accurately they target their customers presumably because junk mail is such a cheap method of advertising anyway.