3 Direct Mail Opportunities in USPS Challenges
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.
3. QR Codes Promotion
The 2011 USPS Mobile Barcode Promotion was very successful. More than 76,000 unique mailings using QR Codes were processed, with 90 percent of the volume being Standard Mail. That was almost a 10-fold increase in barcode usage during the promotional period. There will be a 2012 Mobile Commerce and Personalization Promotion with details finalized and approved by the PRC. It will be focused on e-commerce and personalization, taking the marketing thrust of the 2011 promotion up a notch. It can be an educational opportunity for mailers and marketers alike. More synergy between the print and digital world will be explored by mailers. Credit the Postal Service for bringing ideas like this to the table.
Marketers can take advantage of the strong tie between mail and the digital world. Several studies have shown that website visits and purchases are higher for customers receiving the physical catalog versus any other medium. The touch and feel of mail is still a powerful influence in the customer's mind. In fact, our world of mail and its many facets is often enhanced by, or helps, its media cousins. As mail gets smarter and more targeted, its value in the mailbox will increase. No matter what technologies come next, embrace the future. Look for ways to waltz with the mail and you are probably going to succeed.
The USPS has the mailbox franchise and infrastructure to deliver to over 150 million addresses six days per week. Its potency as a valuable marketing channel cannot be denied. It is time for Congress to review the Postal Service's situation and bring forth a solution. This will insure direct mail's future in the media mix, and a significant part of the U.S. economy.
Steve Brocker is the vice president of sales and marketing for Western States Envelope & Label headquartered in Butler, Wis. He is chairman of the Postal and Government Affair Committee of the Envelope Manufacturers Association (EMA), and represents EMA on the Postmaster General's Mailers' Technical Advisory Committee (MTAC). He is also on the EMA Foundation's Institute for Environmental Studies (IES) committee. He can be reached at firstname.lastname@example.org.