By Jennifer Dirks

Special to The Oregonian

"I think we'll see another five to 10 percent of our business cut,” said Kudrna of the results of the price hike. Big mailing hitters in the same fix are Portland's Ad-Mail, Reed/Harris and Pro Bind, and printers who do mailings as well, such as Signature Graphics and Journal Graphics. These are joined by hundreds of other small mailing houses.

If Kudrna, and other businesses like his, can't find a way to cut costs for customers, he risks losing their business all together. That's because these clients could instead turn to less-expensive forms of bulk marketing, such as newspaper inserts.

"The majority of the folks that we deal with, as far as bulk business mailings are concerned, will see their costs go up 8 to 8 ½ percent," Kudrna said. And for clients like Mercy Corps, a Portland non-profit that funds emergency relief services worldwide through mailed donation requests, that's a problem that could gouge substantially into revenues.

"They're kind of caught," Kudrna said, "because they need to target (their donation requests) so well that other options aren't as viable." Direct mail is consistently the best way to target.

            To keep business steady, "what we have to do is try to figure out ways to make sure our customers are maximizing their dollar," he said, "through either slightly more selective or more targeted mailings, where each piece costs 8 percent more than it did before but you're mailing 8 percent less."

He's faced this problem before. In 20 years since Kudrna started his business, bulk postage prices jumped in the late-1980s, in 1996 and again, just one year ago, in July 1, 2001.

Now the problem is even more urgent. "It used to be that when we had a significant rate increase, at the same time the postal service would offer discounts for bulk mailings" to offset costs, Kudrna said. "Now, they just raise the rates."

Will business rebound? "Generally speaking, there was always a dip in business, and it almost always came back -- in part because the general economy was better. We're not sure what we're going to see now. We feel there will be a lot more interest in solutions, but whether or not it will recover…."

His solutions? He has three:

1) He uses a machine to double-check every mailing. This makes certain there are no money-eating duplicates. Every piece counts.

2) He uses several databases to double-check addresses. This makes sure that if a letter is mailed out it will be delivered to the right potential customer.

"Virtually every mailing goes through a piece of software," he said. "If you have two out of three pieces of an address it can usually fill in the missing piece (zip code, street address). We call it 'address hygiene.'"

These address-checking tools costs Kudrna money in the short run, since he must buy tools such as the post office's National Change of Address database to help ensure addresses.

            3) He helps his clients aim at their best customers, by helping them wade through "frequency statistics." Those are the business's records that show how recently people made a purchase, how frequently they bought, and how much they spent.

These frequency statistics are easy to analyze, "if you keep records," Kudrna said. "But the little (businesses) don't necessarily know how to do that."

Though he's adding these services out of necessity, he also has to raise his own charges to compensate. "What we talked about does cost (our clients) something, but the savings are greater than the costs," he said.

Double-checking for duplicates costs $1 to $7 per thousand, depending on quantity. Change of address checks cost anywhere from 50 cents to $6 per thousand.

            Will these strategies save the day? Kudrna hopes so.

"Every time there's a rate hike, people are like, 'What can we do? What can we do?' But after time, they become more lax," he said. "So if we can get past the hike, and buy and use the tools that are needed to make mailings more effective, then things will smooth out."

SAMPLE PHOTO ASSIGNMENT FOR THIS PIECE:

WHAT: Story on mailing house crisis for May 16 "Washington County Weekly"

WHERE: Mailing/fulfillment house AKA Direct, at 9650 S.W. Herman Road in Tualatin.

WHEN: 9:30 a.m., Tuesday, May 7, 2002

CONTACT: Ken Kudrna, owner, 454-2200

REPORTER: Jennifer Dirks, (360) 566-1481

DIRECTIONS: From Interstate 5 (heading south), take the Tualatin/Sherwood Road exit to the light at 90th (you'll pass Fred Meyer and K-Mart stores and cross a railroad track). Make a right onto 90th and follow it to the end (you'll pass over another railroad track). Make a left at the light onto Tualatin Road. Go to the light and stay straight (Tualatin Road veers to the right). This becomes Herman Road. You'll want to take your first left after the light, which turns you into an industrial area. Turn left at the T in the road, and AKA Direct's building is the second building on the left (there's an AKA sign on the building).