With all the new advances in technology, the old “bricks and mortar” direct mail method is still one of the most effective means of communication available. Direct mail offers very valuable face-to-face consumer experience which annoying pop-up advertisements on the web or spam emails cannot deliver − no matter how pretty the font or how much the images dance across the screen. Consumers still require that “touch and feel” encounter to help encourage action; action that turns into dollars for the mailers. Companies understand that the direct mail phenomenon has and will continue to be a steady and stable key to advertising success. We are not sure the U. S. Postal Service gets it.
Since the inception of the U.S. Postal Service in 1863 there have been 27 rate increases. Almost a third came in the last decade! The Postal Service has generated $68 billion in revenue during 2009 while reporting “experiencing unprecedented losses that are forecast to continue during the next 10 years. Without dramatic changes to the way the Postal Service does business, that cumulative loss will reach $238 billion in 2020.” (Source: Delivering the Future www.usps.com)
While controlled by Congress, the U.S. Postal Service receives no tax dollars to operate the 36,400 postal retail centers; to cover the $1.1 billion that is required to fuel the postal delivery trucks; or to pay for the $2.1 billion in postal employee salaries every two weeks. (That’s a whopping $54.6 billion, or 80% of income, in salaries alone!) With less than $70 billion in revenue generated, Congress must come up with solutions to create a financially sound future for the U.S. Postal Service or the current annual revenue gap of $15 billion will only continue to widen. And we do not want to think of the amplification of this difference when Congress acts on Retiree Health Benefits and delivery frequency which is estimated to put that gap at a staggering $160 billion. Could the U.S. Postal Service become extinct? We hope not but the bleeding has to stop.
So what are you going to do to stop the bleeding Mr. U.S. Postal Service?
In September 2010 Senator Tom Carper (D-Del.) introduced the Postal Operations Sustainment and Transformation (POST) Act of 2010 in an effort to get a handle on the current budget issues faced by the U.S. Postal Service. The act proposes to eliminate Saturday mail delivery at a savings of $40 billion, close the 26,000 post offices that are in the red, and address the $50 billion retiree health benefit payment issue. The savings are over a ten-year period. Keep in mind this bill must pass Congress before any changes take effect. Not to be the gloomy Gus but we hear Congressional gridlock. Until then what can the Postal Service do to stop the bleeding? Well guess what Mr. U.S. Postal Service, direct mailers i.e. a substantial portion of your rate payers want to give you the money you need to continue doing what it is you do best…deliver mail. Won’t you let them help you?
How? Glad you asked.
In an article written by Todd Butler entitled, “What’s Next? A New View of Exigency” he points out that Congress has taken a simplistic method in an attempt to stop the hemorrhaging by raising postage rates. The effect of this unsophisticated method of operation forced small and medium sized companies, and possibly the big firms as well, to look for other means to get their message to consumers. One obvious choice was the Internet where companies made hefty investments in online communication to significantly cut their postage expense. They traded “junk mail” for “spam” and saved a ton of cash. But that brought challenges of undeliverable email and opt-out policies. Consumers could simply apply email filters which automatically sent emails to junk folders for instant deletion. More and more intended consumers where opting out of email messages, turning off the mailer with the click of a button. Consumers did not even have to look at an advertisement to decide whether they wanted it or not. Tons of advertising messages went unnoticed. Because consumers decided they hated spam much more than they hated junk mail, direct mail is making a comeback.
How else can mailers get their message across to intended recipients? Direct mail was built on being intrusive. If consumers are able to “opt-out” of electronic advertising, they never even see or touch the message. Companies are coming to appreciate that cheaper does not mean more effective. But, mailers are not willing to pay higher costs for the government-controlled delivery system when there are other, albeit not as effective, means. And they definitely do not want to waste money on unresponsive prospects. Exigent rate increases are not the answer.
So Mr. U.S. Postal Service what does this mean for you?
Mr. Butler suggests “if you would like help keeping the USPS vibrant and alive, with as little negative impact on the federal budget as possible, direct mail customers need postage rates that are affordable and able to entice new customers into the mail stream.” Operationally the U.S. Postal Service must make changes as well. We agree.
Intra-Mail Network (IMN) helps mailers and as a result helps the U.S. Postal Service. IMN is an innovative, technology-based company that helps commercial mailers properly sort and sequence mail. IMN’s proven process substantially reduces postage costs for the mailer and paper waste associated with mailing. Besides saving money for commercial mailers, the IMN process provides better addresses and faster delivery which means less undeliverable mail pieces with more mail reaching the intended recipients. Less mail ends up in Circular File 13 (the garbage) and the money mailers save turns into more mail sent which turns into more revenue generated for the U.S. Postal Service. We cannot pass the POST Act. What we can do is insure deliverability of the mail, so that mailers are more apt to mail and mail more often because they know direct mail works. More mail equals more money. But the U.S. Postal Service must do its part.
Mr. Postal Service we want to keep you in business, why don’t you help us help you?
U.S. Postal Service facts taken from
http://www.usps.com/communications/newsroom/postalfacts.htm
http://www.usps.com/communications/newsroom/deliveringfuture/pdf/dtf_FSbynumbers.pdf
http://www.usps.com/communications/newsroom/deliveringfuture/html/dtf_FSfaqs.htm