Author Archives: bebtexas

What is GDP and Why it Matters to Marketers

The U.S. GDP is at 6.9%. U.S. real GDP growth rate (annualized) during the fourth quarter of 2021, up from the 2.3% growth in the third quarter. For all of 2021, real GDP grew by 5.7%, versus a 3.4% decline in 2020.

So, what exactly IS GDP? It’s an acronym for Gross domestic product. It is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.

The calculation of a country’s GDP encompasses all private and public consumption, government outlays, investments, additions to private inventories, paid-in construction costs, and the foreign balance of trade. (Exports are added to the value and imports are subtracted).

Of all the components that make up a country’s GDP, the foreign balance of trade is especially important. The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy. When this situation occurs, a country is said to have a trade surplus.

If the opposite situation occurs—that is the amount that domestic consumers spend on foreign products is greater than the total sum of what domestic producers are able to sell to foreign consumers—it is called a trade deficit. In this situation, the GDP of a country tends to decrease.

GDP can be computed on a nominal basis or a real basis, the latter accounting for inflation. Overall, real GDP is a better method for expressing long-term national economic performance since it uses constant dollars.

A constant dollar is an adjusted value of currency used to compare dollar values from one period to another. Due to inflation, the purchasing power of the dollar changes over time, so in order to compare dollar values from one year to another, they need to be converted from nominal (current) dollar values to constant dollar values. Constant dollar value may also be referred to as real dollar value.

Successful marketing strategies use economic indicators to make sound decisions and identify the best timing for messages. The economy has a direct impact on the way we market to consumers and understanding the connection is an essential practice to any successful campaign.

Spring Shopping

As winter turns into to spring, people start to pack away coats, return patio furniture to the backyard, and shake off their winter shut-in mentality. They also start to shop. A lot.

Of course, consumers stock up on essentials such as garden equipment, spring-cleaning supplies, and warm weather clothing. They also spend lots of money on items that may surprise you!

Bazaarvoice, a software tech company, conducted an analysis of shopper’s behaviors using data from their 5,700+ brand & retail clients and interesting statistics took shape. In 2021, people spent $5.4 billion on St Patrick’s day. That’s an average of $40.71 per consumer.

Website traffic for dresses rose 16% higher in spring over summer. Traffic increased even more in late April as high school students began to prep for graduation parties and proms.

Lawn and garden traffic grew by 61% during the week of spring break.

Christmas spending generates around $800 billion in sales, and $9 billion of it is from Black Friday. Spring holidays generate around $55 billion in sales:

$ 5.4 billion    St Patrick’s Day
$21.6 billion    Easter
$28.0 billion    Mother’s Day
$55.0 billion    Total

Let us not forget April 15th – Tax Day. The IRS issued 128 million refunds for the 2021 tax filing season (2020 tax year), which totaled $355 billion. What’s more, nearly 8 out of 10 people who receive a refund will spend it rather than put in into savings.

Reviews from your customers are essential. The Bazaarvoice analysis showed that 75% of online vacuum-cleaner shoppers read a review before making a purchase. Similar numbers were found in lawn care (69%), tools (61%), and dresses (60%) categories.

When outlining your spring retail strategy, be sure to plan for seasonal behavior surges. Plot the timing of when to offer the right products and services so you can be ahead of your competitors and create incentives for your satisfied customers to review your business.

Postal Reform Act of 2022 Passes – On It’s Way to the Senate

Finally, some good news! The House passed the Postal Reform Act of 2022 on Tuesday.

This bill addresses the finances and operations of the U.S. Postal Service (USPS). It requires the Office of Personnel Management to establish the Postal Service Health Benefits Program for USPS employees and retirees and provides for coordinated enrollment of retirees under this program and Medicare. The bill repeals the requirement that the USPS prepay (annually) future retirement health benefits, something no other government entity was required to do. The bill would eliminate much of USPS debt and restructure some of its operations, opening the door to the first overhaul of the agency in 15 years while providing major financial relief.

The bill will also allow the USPS to establish a program to enter into agreements with an agency of any state, local, or tribal government, and with other government agencies, to provide certain nonpostal products and services such as collecting water bills or basic Department of Motor Vehicle functions as long as they reasonably contribute to the costs of the USPS and meet other specified criteria.

Postal Reform also requires the USPS to develop and maintain a public dashboard to track service performance and must report regularly on its operations and financial condition.

The Postal Regulatory Commission must annually submit to the USPS a budget of its expenses. It must also conduct a study to identify the causes and effects of postal inefficiencies relating to flats.

After passing in the House on Tuesday, the new measure now heads to the Senate, where it already has bipartisan support and a passing vote is expected soon.

A Letter from Ron Royall

Houston, TX— Happy New Year, from all of us at Business Extension Bureau! Like most of us, 2021 was fraught with challenges that we would not have thought possible a few years ago.

In the Houston area, a winter storm in February, brought the longest number of consecutive days with freezing temperatures since 1940. Over 4 million power outages were reported during the storm. The entire city shut down yet we managed to work through it and are grateful that none of our staff were too negatively impacted.

Then the pandemic slowed the global supply chain. Manufacturers suspended work as various safety precautions were enacted. By mid-2021, major American ports became inundated with historic amounts of inbound cargo. Terminal staff lacked the bandwidth to unload ships leading to extended wait times. Even rail and trucking services struggled under the increased load and nationwide labor shortages added fuel to the fire. As we prepared for the busy fall mailing season, we watched paper prices go up, availability go down, and wait times increase.  Inflation increased due to labor and material shortages and lavish government spending.

In August, we saw an unprecedented postal rate increase (the second within the same year). US Postmaster General Louis DeJoy continues to raise controversial and unnecessary headaches for mailers across the nation that include extended delivery times and a restructure of how rate increases are calculated and controlled. We expect the next market dominant postal rate increase to occur sometime in July 2022, and will keep you abreast of rates and regulation changes as they happen.

Of course, there were a few times over the past year that we endured outbreaks of COVID within our organization. We are happy to report that, so far, every employee has recovered and our business remained operational without delay or closures.

November brought our biggest challenge to date. In the early morning hours of November 11, (Veterans Day), our office building caught fire. Our business resides within three buildings:
1.  Operations
2. Conference/classroom/climate controlled storage
3. Offices
The office building was built in 1945 and was once affiliated with a theatre across the street. Our lobby was known for its red-flocked wallpaper, sweeping, red carpeted staircase, and rustic chandelier.

Thankfully, nobody was hurt. And thanks to a good Samaritan that quickly contacted 911, the fine professionals of the Houston Fire Department contained the blaze before it spread to our other buildings. Unfortunately, the offices sustained serious water damage.

It is important to share that once again, I am awestruck by the dedication and loyalty of our employees and partners. Operations ceased for one-day only, while we assessed the damage and started the process of rebuilding. My brother, Ro, reminds me that we submitted a mailing to the post office on the day of the fire, so actually, we didn’t miss a day.

We are very fortunate as BEB has very low turnover. We have several employees who have worked for us for over 25 years, and even have multiple generations of the same families working here.

We have officed in this location since 1965, and it was touching to see how the fire profoundly
affected our BEB family. My brothers and I grew up here. Ro and I worked in the warehouse during our high school and college years! For many of us, the aftermath of the fire evoked a sense of loss, as if we lost part of our past.

However, not even fire can break our spirit or erase our 73-year old history. Like the Phoenix rising from the ashes, we have embraced our rebuild with vigor and renewed life. The renovation is allowing us the opportunity to expand our operations space, upgrade equipment, and enhance the workflow of our manufacturing plant; while at the same time allowing us to preserve the heritage and history of our beloved family owned business, which we value beyond measure.

To our staff and partners, thank you for all of your contributions and caring assistance during this recent event.

To our amazing clients, a special thank you to you too. We consider it a privilege to partner with you, and are grateful for your business.

Sincerely, I hope you have a healthy and successful year and again, on behalf of all of us at BEB, Happy New Year.

Ron Royall
President & CEO

2022 Paper Prices

Printers and mailers faced never seen before events which had an industry wide impact on raw material, paper, and transportation supplies last year.

The February Gulf Freeze drove force majeure declarations across many industries and raw material shortages extended into the fourth quarter. Prices rose between 4% – 10% in 2021.

Meanwhile, paper demand increased between 5% – 10% year-over-year for white paper products. Pulp prices rose 40% over the previous year, and paper price increases ranged from 7.5% to 20%.

Then transporting materials became an issue as the national Load-to-Truck Driver Ratios reached as high as 12 loads to 1 driver.

Crude oil prices rose 128% driving up the cost of diesel fuel for long haul trucking. Even container shipping costs increased by nearly 195% over the past year as supplier surcharges were introduced to cover the rising costs.

In October, the Labor Department reported that more than 11 million open jobs existed in the U.S., the highest level ever, with over one million more jobs than unemployed people.

The struggle with higher costs coupled with the search for paper availability and slower delivery times made Q4-2021 a real challenge.

We anticipate that in 2022, speed optimization will become a hot selling point, as businesses look for ways to offset rising postal costs and delivery service downgrades. Collaboration between Sales, Operations, and the Supply Chain becomes crucial to ensure the timely delivery and accurate management of paper and other key materials for production of direct mail projects.

Paperboard is expected to account for two-thirds of the global paper output by the end of 2022. That’s up from 50% before COVID-19.

As market demand for cartons and other paperboard products dramatically increase, white paper product manufacturing declined. Coated freesheet volumes are down 48%, and uncoated freesheet dropped 12% since 2017.

Online paper purchases continues to grow as does the demand for packaging products. Online sales of pulp and paper products are growing at record speeds, more than 15% of sales in the United States is expected to occur online in 2022.

Q4 challenges aren’t going away into the new year. Paper mills are projecting continued allocations and limited supplies well into 2022. As paper mills work to replenish inventories and demand levels off, most experts anticipate some relief after the second quarter, with pulp and wood prices likely to moderate.

Supply chain issues are also expected to continue into 2022, including:

  • Inflation driven by ongoing disruptions in paper and raw material availability and uncertainties across transportation sectors. Pitney Bowes is projecting that global shipping volume will surpass 100 billion parcels in 2022
  • Labor shortages resulting from increases in the remote workforce and employees transitioning to higher paying jobs
  • Demand uncertainty caused by rising global demand with dramatic changes in consumption as consumers shift focus to the purchase of products instead of services

Increased awareness of market conditions and a rise in focus at executive and board levels will allow companies to better navigate the supply chain challenges in 2022. In addition, changing analytic capabilities are driving dramatic improvements in the management of supply chain shortcomings.

Heightened consciousness of corporate social responsibility is creating pressure on supply chain leaders to rethink how they operate. After the shortfall in the 3rd and 4th quarters of last year, many companies are reconsidering supply sources, as they look to shift from global suppliers to local or regional instead.

No one has any idea when exactly this paper shortage will end. However, efforts are ongoing to strengthen and expand supplier relationships as we prepare for the busy seasons of 2022.

Large Church Attendance vs Small Church Attendance

Based on a recent Faith Communities Today survey, small to mid-sized churches are finding that half of the country’s congregations have 65 or fewer people in attendance on any given weekend. That’s a drop from a median attendance level of 137 people in 2000.

Produced by the Hartford Institute for Religion Research, the FACT survey consists of self-reported questionnaires sent out to congregational leaders every five years since 2000.

Congregations with 1,500+ people in attendance were able to avoid decline; 71% of those large churches grew over the past five years. Larger churches tend to have full-time clergy, greater financial and physical resources and a diversity of ages and races among members.

However, smaller churches tend to have higher levels of member commitment, parishioners give more money per person, and are more likely to volunteer. These churches spend less on staffing and give the highest percentage of their budget toward missions and charity.

Churches with more than 250 attendees account for 10% of all U.S. congregations, yet host close to 60% of all weekly churchgoers.

With a larger number of parishioners comes a decline in per capita giving, willingness to volunteer, and a lower overall level of participation within the congregation.

As large gatherings continue to raise safety issues, determining how to draw existing and new members to churches remain a priority for leaders. Engagement with participants and the community surrounding the church are essential in attracting individuals to worship.

Direct mail is a great way to connect with your congregation and community. Invite your neighbors to join your smaller group gatherings such as bible studies, or support groups.

Using direct mail to notify your parishioners about upcoming events, or sending a saturation mailing to every household within a certain radius is an excellent way to increase participation. Direct Mail Works!




Facebook, Snapchat & Instagram Users Visit Daily

Seven-in-ten Facebook users say they visit site daily. Despite the ever-changing relationship with its consumers, Facebook users remain loyal and active to the platform. 70% of Facebook users say they visit the site daily, including 49% who say they visit several times a day. (These figures are statistically unchanged from those reported in the Center’s 2019 survey about social media use.)

Smaller shares – though still a majority – of Snapchat or Instagram users report visiting these respective platforms daily (59% for both). And being active on these sites is especially common for younger users. For instance, 71% of Snapchat users ages 18 to 29 say they use the app daily, including six-in-ten who say they do this multiple times a day. The pattern is similar for Instagram: 73% of 18- to 29-year-old Instagram users say they visit the site every day, with roughly half (53%) reporting they do so several times per day.

YouTube is used daily by 54% if its users, with 36% saying they visit the site several times a day. By comparison, Twitter is used less frequently, with fewer than half of its users (46%) saying they visit the site daily.

Below is a chart showing income demographics by platform to help plan your 4th quarter marketing campagins.

Social Media Marketing – Don’t Leave Out 50+

In a pattern consistent with past studies on social media use, there are some stark age differences. Some 84% of adults ages 18 to 29 say they use social media sites, which is similar to the share of those ages 30 to 49 who say this (81%). By comparison, a somewhat smaller share of those ages 50 to 64 (73%) say they use social sites, while fewer than half of those 65 and older (45%) report doing this.

These age differences generally extend to use of specific platforms, with younger users being more likely than their older counterparts to use these sites – though the gaps between younger and older Americans vary across platforms.

Majorities of 18- to 29-year-olds say they use Instagram or Snapchat and about half say they use TikTok, with those on the younger end of this cohort – ages 18 to 24 – being especially likely to report using Instagram (76%), Snapchat (75%) or TikTok (55%). These shares stand in stark contrast to those in older age groups. For instance, while 65% of adults ages 18 to 29 say they use Snapchat, just 2% of those 65 and older report using the app – a difference of 63 percentage points.

Additionally, a vast majority of adults under the age of 65 say they use YouTube. Fully 95% of those 18 to 29 say they use the platform, along with 91% of those 30 to 49 and 83% of adults 50 to 64. However, this share drops substantially – to 49% – among those 65 and older.

By comparison, age gaps between the youngest and oldest Americans are narrower for Facebook. Fully 70% of those ages 18 to 29 say they use the platform, and those shares are statistically the same for those ages 30 to 49 (77%) or ages 50 to 64 (73%). Half of those 65 and older say they use the site – making Facebook and YouTube the two most used platforms among this older population.

YouTube Use up 11% for 65+

The Pew Research Center surveyed 1,502 US adults between January 25 and February 28 and found that 81% use the social media platform, YouTube. YouTube and Reddit were the only 2 social sites that measured statistically significant growth since 2019, (Up 10% in just 2 years).

YouTube saw increases across the board on all age levels, but the 50+ crowd grew double digits.

50-64 year olds were up 13% and 65+ rose by 11%.