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3 Direct Mail Opportunities in USPS Challenges

March 26, 2012 By Steve Brocker
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Make no mistake, postal changes are coming. The pressure on Congress to compromise is mounting because millions of jobs and more than a trillion dollars are at stake.

Senate Bill S. 1789 (21st Century Postal Service Act of 2011) is the current bill that addresses the United States Postal Services' financial condition and offers long-term remedies for their fiscal health. There's also the House Bill (HR 2309) that addresses the financial condition of the USPS, but differs in its proposed solutions. Without going into the details and obstacles of these bills, changes need to occur as soon as possible. Continued delays could hurt the mailing industry's performance and business model.

The 2010 Mailing Industry Job Study by the Institute of Postal Studies revealed there are 8.7 million U.S. jobs tied to the mailing industry, and $1.1 trillion in revenue—7 percent of GDP. Of these jobs, 92 percent represent the private sector. These figures demonstrate that a thriving Postal Service is required to support a major part of our economy.

The USPS faces a dire need to cut costs, stay competitive and deliver more value. Sounds like the challenge of most businesses today. Yet even in the face of reductions lie mailing opportunities:

1. Network Realignment
Mailers are concerned about service, as the Network Optimization Plan would close about 250 distribution centers while about 200 remain open. Who wouldn't be? This may impact the speed of overnight service, but what's important here is predictability. Can the Postal Service reduce its distribution footprint while maintaining, or improving, the delivery time of a mail piece? Is overnight delivery of First Class Mail important, or is the accuracy of that second or third day delivery the key? To a marketer, predictability is more important. Will Standard Mail used by marketers maintain current service standards? It must in order to stay relevant.

2. First Class Mail, Second Ounce Free
Has the USPS created a monster, or a monster opportunity? Let's realize something about First Class billing and mailing statements: They have nearly a 100 percent open rate. People read their bills and statements. Can I create a good marketing offer, event notice or introduction to a partner company's products (for a fee, of course) and take advantage of that second ounce free? The ability to generate income from that second ounce is a good reason to stay in the mail. This isn't cannibalizing Standard Mail efforts for acquisition mailings. It's an avenue to open up marketing efforts for prospects that do little or no mailing because the higher level of content viewership will attract new players. 

 

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