Dogs and a kinder, gentler (and smarter) USPS

photo courtesy ABC News

In their relationships with the United States Postal Service, dogs generally have the upper hand . . . er, paw.  Beyond the fact that postal employees frequently provide a tasty midday snack for their customers’ canines (see photo above), the USPS’s attitude toward four-legged fuzzballs has been surprisingly favorable.  Dogs have been featured frequently on stamps, some postal employees actually own and love dogs, and recently a new USPS program has helped to locate a lost Labrador in Stillwater, NY.

Here’s the story:

When Randi Slocum’s dog Kaylee ran away from her Stillwater, NY, home, Slocum and her friends did what any group of concerned pet owners would do — they formed a search party and knocked on neighbors’ doors looking for the chocolate Labrador mix.

But Randi’s mother, Carolyn, had a better idea — use Every Door Direct Mail (EDDM) to notify residents in Stillwater and nearby Schuylerville, NY, of the dog’s disappearance.

Carolyn Slocum, a board member of the local Postal Customer Council, had just attended an EDDM seminar given by Albany District Grow Your Business Coordinator Natalie Dolan. “I knew that the best way to reach every household was through the new EDDM program,” said Slocum. “Since many people work all day, this would be the most likely way to reach them.”

By the next morning, Carolyn had the mailings prepared to EDDM standards and dropped them off at the Stillwater and Schuylerville Post Offices. The flyer helped unleash a series of phone calls, and that helped lead to Kaylee’s safe return.

Source: Postal Reporter News Blog

Long the poster child for government (or quasi-government) inefficiency, the USPS has in recent months introduced a couple of programs that are surprisingly sharp.  Every Door Direct Mail (EDDM) is simply not what you would expect from an agency know for volumes of arcane rules.  The postal service calls it a simplified mailing process, and it really is. Basically, EDDM makes it easy to send saturation mailings to reasonably small geographic areas without the need to purchase address lists. EDDM comes in two flavors – regular, for mailing service providers like Gralpharaphics Macon (name disguised to protect the delicate sensibilities of the franchise) and retail, for the DIYer.  The website (https://smp.usps.gov/) is functional and includes a cool mapping feature to allow the user to select by postal carrier route.

Source: USPS

It is important to note that EDDM is the direct opposite of the targeted mailings that Poor Richard’s printshop has been promoting for some time.  EDDM is, in essence, a saturation mailing. No demographics selections are available and because the addressing is generic, it’s not possible to personalize the mailing or direct the recipient to a personalized URL (PURL).  The only select feature allows the sender to de-select business addresses and/or P.O. boxes.

Even with those limitations, EDDM will be great for service businesses and other small businesses that sell to a broad customer base and want to target specific neighborhoods to generate new business.   We are currently working on a saturation mailing in three neighborhoods for a startup lawn service business.  He’s chosen carrier routes where there are few apartment complexes and has eliminated business addresses.  The mailing will be around 1700 pieces, postage will be around $.15 each,  and most of the mailpieces will land at addresses that could conceivably benefit from his services.
On the other side of the mailing spectrum, the USPS has introduced a special discount to run in July and August 2011 to help promote “web-enabled” mailings.  This is another smart move that recognizes the value of cross-channel marketing and the integration of direct mail and internet.  First Class and Standard Mail letters that incorporate a QR or other mobile barcode will receive an additional 3% discount during July and August.  Details can be found on the  USPS website.

Both the US Postal Service and the printing industry as a whole have suffered greatly during the past almost 4 years of decession as cost cutting, business closures, and an accelerated shift to online communication have reduced volumes.  Poor Richard is hoping that the tide may turn again as marketers recognize the value of tangible print messages, especially in combination with impressions from other channels.  It is refreshing to see the USPS taking some intelligent direct action to encourage the use of both direct mail and cross channel efforts.  Want to try any of this out?  Call me or stop by the printshop behind the red awnings on Poplar Street. Bring your dog.

Re-inventeration

Square-wheeled trike. Thanks to Jeff Atwood at http://www.codinghorror.com.

If one happens to be a small business owner, especially if one happens to be the owner of a local printing company, the idea of re-inventing one’s business is probably pretty far up on the agenda these days. This is primarily because much of the business we all once enjoyed has suddenly just disappeared, as if by magic; or possibly due to the re-inventing of a much less cooperative economy.

Re-inventeration, a new word which Poor Richard thinks he has just coined, is the process of re-inventing something.  Of course, the whole concept is preposterous.  If something is invented the first time, does it really make any sense to try to re-invent it?

And it’s complicated. Re-inventeration is frought with Catch-22 scenarios. For those who have not read Joseph Heller’s famous book, the Catch-22 was the ultimate bureaucratic boondoggle.  Catch-22 (the book) told the story of Yossarian, a WWII B-25 bombardier and his squadron, as they were forced to fly increasing numbers of bombing runs over Italy.  The squadron commander, Major Major, literally embodied the concept of Catch-22. It was possible to schedule an appointment with Major Major at any time; however, one could only actually see Major Major if he was not in.

Similarly, if one was deemed insane, it was possible to get discharged from the Air Corps. Because Yossarian’s desire for discharge was deemed very sane, his insane behavior was considered by his superiors as a natural expression of his  true sanity. Catch 22.

Not unlike Yossarian, Poor Richard is struggling with the Catch-22s of the re-inventeration process at his downtown Macon Gralpharaphics shop (name carefully disguised to protect the sensibilities of the franchise). The first Catch-22 is simply time.  Business is down, we’ve cut back on staff, and more time is spent working in the business than on the business.  Without more time to work on the business, we’ll never be able to grow the business back to a point where more folks can be hired to work in the business; relieving the requirement for the owner to fold brochures until 2 am and allowing him to use his brain once again.

The next and more worrisome set of  Catch(es)-22 have to do with scope, the literal definition of the business. Behind the red awnings on Poplar Street, we’re taking jobs that we probably wouldn’t have looked at a couple of years ago.  A lot of these are small and risky.  The risk is that the expense in time and effort to produce the small jobs will exceed the revenue that results. Catch 22. The potential benefit is a new customer who might actually bring us a profitable job one day. Poor Richard is not sure how this one is playing out.

The low hanging fruit has been picked. We’ve responded to economic pressure on mainstay product lines by adding more products. In our case, we’ve added wide format printing and reprographics to subsidize some of the losses in conventional offset printing.   These were natural additions – similar products and services to what we were already doing. They didn’t disrupt the production process much and they added little in the way of expense. Unfortunately, they did not add enough revenue to compensate for the decline in conventional printing; and these product lines are also facing economic and competitive pressures. Catch 22.

So what’s the next step? Poor Richard has written before (with misgivings) about the current buzz-phrase in the printing industry. The latest rage is for printing companies to become marketing service providers. (See Poor Richard’s post Measuring Value). Our little company  is moving in this direction slowly but steadily, unsure of all of the implications, but with a sense that it is inevitable – there just aren’t many other areas of opportunity left.

Becoming a marketing service provider is full of Catch(es)-22. First, the whole notion takes us out of the realm of producing tangible products and into the area of shaping content. We’re no longer working with machinery that prints, cuts or folds stuff; but rather with electronic means of communication and the disciplines that go along with them – CSS, XHTML, Purls and a bunch of other acronyms. The competitive cost of entry into this business is low relative to the cost of a new printing press, which means that the pressure to keep ahead of the technology curve will be steep. Worse, the marketing service provider notion requires a new skill set that takes time to learn.  In our case, that’s the owner’s time that is in very short supply. Catch 22.

Second, the whole idea of shaping content laps over into creating content.  Printing companies are pretty good at shaping. We do layout work, color correct photos, even occasionally light editing for our customers. This is different from creating the content, an area we have generally avoided because of time limitations and a focus on keeping the machines running.

It’s just a little too hopeful to think that we might make money only by implementing marketing services — integrated direct mail and e-mail campaigns, for example. Most of our customers simply lack the time and resources to develop the content for this kind of effort, so it appears inevitable that we will be required to do some development work for them if we want to sell the services.

Hopefully we can do this without stepping on the toes of our agency customers and triggering yet another Catch 22. Ideally, the agencies might find it helpful to use our shop to implement integrated direct mail and internet campaigns for their larger customers. Our challenge will be keeping the focus on implementation (and measurement) of specific marketing services without getting customers confused about what we can do (and want to do).

Creating content, even on a limited basis, is a big step for a small printing company; but it is still a lot different from the conceptual work that our agency customers do. We can make that statement, but will our customers understand it?  Another Catch-22.

Poor Richard supposes that re-inventeration, like change, is necessary and unavoidable; but he hopes he’s not re-inventing a square-wheeled tricycle.

Direct Mail and the Internet

So it’s no great mystery why mail volume, including direct mail (advertising) volume is down and the USPS is in a bind. In the last post Neither Rain, Nor Snow, Nor Dead Economy, we went over some of the dismal numbers that the USPS has “posted” in recent months. The financial strain of the recession has accelerated the move of content online, where the costs are less. Printers and the USPS are suffering.

So, is there still a place for printed direct mail in the mix? Let’s turn to the USPS again.  In a surprisingly insightful brief entitled Mail and the Internet, the postal service presents a convincing case for a combination of print mail and online advertising. Here’s the thrust of the argument:

In fact, recent studies by the U.S. Postal Service and a number of independent research groups found that consumers — even heavy Internet users — continue to view mail as a highly relevant and significant part of their lives. It provides a physical and tangible quality consumers find lacking in their electronic communications. But that’s not all. The studies also showed that mail, working side by side with digital media, can have a substantial impact on the use of commercial Web sites.

Much of the specific content of the brief deals with the integration of email, online storefronts and conventional catalogues, but the USPS makes a couple of key points regarding the combination of conventional mail and email in the marketing mix:

1. While email has outpaced mail as the primary form of (written) personal communications, readers are much more likely to “trash” marketing emails than conventional mail pieces. People still enjoy opening the mail.  Junk email is a nuisance.
2. Conventional mail is a very effective way to get permission to send an email.  In other words, direct mail is a great way to get potential customers to subscribe to emailed news briefs or promotions.

From here, it’s tempting take on the ROI argument and search out some spurious data to try and prove that the return on investment for conventional direct mail is actually higher than the ROI for an email campaign.  Poor Richard thinks that’s a worthless effort, but can state uncategorically that the ROI for a  well-conceived direct mail or email campaign will always be higher than the return for a poorly implemented campaign of either type.

Nor is it useful to argue that direct mail and email are apples and oranges. They’re more like white grapes and peach . . . the juice goes together really well. And there is great potential to combine conventional mail, email and other online communications to improve the total ROI for the combined efforts. Conventional direct mail combined with personalized URLs (PURLs) provide a great method of sorting through an inexpensive direct mail list for those who are really interested in a product or service.  Respondents sign on to a landing page, where they can ask for direct contact or for more information. They might also be asked if they’d like to subscribe to an e-newsletter or for periodic special offers.

The net result is that more money and attention are focused on those who are most interested (and most likely to buy something) and less on those who aren’t interested. Even more better, you get to measure. While it is possible to partially measure response from conventional mail campaigns with BRMs, coupons or a tracked phone number, the integrated print and email campaign generates better measurable data from the landing page . . . including names and addresses of those who respond. And if they subscribe to an e-news brief or some other such offering, they’re actually asking you to stay in touch.

Back to the USPS and the printing business. Regardless of the trends, there will remain a very real need for the postal service in the foreseeable future. While it’s easy to communicate online, you need a Star Trek transporter to actually send stuff through cyberspace. Similarly, the tangibility and portability (and disposability) of print gives it an advantage over electronic media in many situations. I haven’t seen them passing out Kindle’s at the theatre, yet.

Poor Richard can’t speak for the future of the postal service, but the the technology to produce and manage integrated electronic and print communications is very available. We’re even playing with it at Gralpharaphics (name changed to protect the innocence of the franchise). Not to say that the change isn’t painful.  It was certainly easier for printers when print was king. But change is inevitable . . . and Poor Richard isn’t really ready to become a dinosaur yet.

Neither rain, nor snow, nor dead economy?

Poor Richard thought it was only printers that had it bad. It had been a while since I had visited our local BMEU (Bulk Mail Entry Unit). The printshop next to Grant’s Lounge (name withheld to protect the sensibilities of the franchise) had a mailing to go out Friday, and no one else was available, so I loaded up the Suburban and headed for the post office.

First, let me say that the people we work at the Macon BMEU are nice folks. Ken, the boss, helped me get started in mailing several years ago.  I called him looking for information and he actually came out to the shop and spent a couple of hours going through the regulations. Randy, Charlotte, Gary and John are always helpful and friendly.  They play by the rules and let us know when we screw up, but they have always been patient and very good to work with.

This part of the post office (the BMEU) used to bustle with activity.  On any given day, There would be several mailers there with at least one who had made a royal mess of a mailing job.  One of the folks mentioned above would be patiently explaining the rules, even if the customer was irate. There is a Merlin machine behind the counter that checks barcodes and machinability. In days past, this machine was generally running. Other postal folks were continually going in and out behind the counter doing the things that postal folks do.

Yesterday’s scene was quite different. Only Ken and Charlotte were there and there was no activity at all. The first words from Charlotte’s mouth were, “This is my last week. I’m taking early retirement.”

And apparently she’s not the only one. The USPS has offered its employees an early opt-out program in recognition of the changes in their business. And the mail business has changed indeed.  The official statement from USPS on the Voluntary Early Retirement (VER) program reads like this:

Automation and technological advances coupled with mail volume reductions has the Postal Service continuing to look for ways to voluntarily reduce its workforce while maintaining excellent customer service.

Source: Liteblue.usps.gov

Dear readers, I hope you don’t think it inappropriate for Poor Richard to read a bit between the lines and hazard some not so bold inferences.

First, the reduction in mail volume is easy to document.  First Class mail peaked in 2001 and (with one year’s exception) has been declining steadily ever since. In FY 2008, the USPS lost $2.8 billion (yep, billion) on it’s operations and total mail volume decreased by 4.5% from the previous fiscal year. It’s a no brainer . . . email continues to replace mail.

The recession has impacted direct mail in the same way that printing has been affected. Direct mail is an easy target for businesses cutting expense. Standard mail piece volume for FY09 was down almost 20% from the same time period in FY08. (Source USPS Financials).

Staunching the flow of red ink seems to be more important to USPS than excellent customer service, though. It seems obvious that USPS is moving toward a much less customer-friendly environment. Bulk mail facilities in smaller communities have already been shuttered with customers told to carry their mailings to centralized units in larger communities.

The postal service is also quickly heading towards enforced online entry of mailings for mail service providers. At this point, the online service (PostalOne) is kind of clunky and complicated. That’s no big surprise. The problem, though,  is that all of the customer-friendly postal employees are taking early retirement. There’s no one to explain the new systems.

Finally, transferring costs to the customer may be exacerbating the problem. Poor Richard thinks that it started with rubber bands. Only a year or so ago, the bulk mail offices actually supplied rubber bands to their mailers for use in packaging standard mail. When mailers were told that there would be no more free rubber bands, most of us just shrugged our shoulders and passed that little cost on to our customers. Since then, there have been a lot of incremental cost increases that we’ve had to pass along. For example, the USPS has added a move update requirement that has increased the cost of list processing. They’re also charging a small fortune for address corrected pieces that are returned to the mailer.

Postal rates and costs continue to increase while the perceived cost of electronic communication is low.  Even when the potential impact of mail can be very positive (high ROI), it is perceived as an expensive way to market.   Simply put, the cost to mail has gone up while the perceived value of mail compared to the alternatives has diminished.

This is not a winning scenario for the USPS . . . and it does explain the drastic changes at the Post Office.

So we have to ask the question. Is printed mail, especially direct mail, still a worthwhile endeavor? Is there a place in the new economy for the US Postal Service?

NEXT POST – Direct Mail and the Internet

Neither Rain Nor Sleet, nor ?

A Summer Sale.

That’s what the subject line of the email stated.  I nearly clicked the junk button, but a quick glance at the sender held my attention.  DMMAdvisory.  Wait a minute, that’s the U.S. Post Office.  They don’t have summer sales . . . what’s up here?

DMMAdvisory is the USPS email link to keep mailers informed about all sorts of goings on at the Postal Service.  The DMM is the domestic mail manual.  Actually, I think it’s the domestic mail manuals . . . there’s a bunch of them (if you’re curious, you can look at ’em here).  Usually, the DMMAdvisory is all about new rules that are going to be issued because they’ll make the USPS more efficient or rescinded because even though the USPS will be more efficient, everyone else will be less efficient.  The Advisories also talk a lot about Intelligent Barcodes, Move Updates, and services like PostalOne!, the online portal where mailers like AlphaGraphics are supposed to enter in all of their mailing data to make the USPS more efficient.  And we’ll be glad to do it, too . . . just as soon as the USPS figures out how to make the website work.

I’ve never seen a DMMAdvisory that talked about a summer sale. I got kind of excited about that, thinking maybe this was something we could use to promote mailing services. So I clicked on the link to find out about it. What I got was a 32 page .pdf document.  The USPS doesn’t advertise a sale, you understand, they file a Notice with the Postal Regulatory Commission. That kind of advertising wouldn’t get results for the rest of us, but apparently it works for the USPS.

Poor Richard, feeling brave, waded into the document. The first important fact I discovered is that Standard Mail is an important investment for American business and that it is incumbent upon the USPS to encourage American businesses to invest:

The current state of the economy has forced businesses, particularly Postal Service customers, to pull back on important investments necessary for ensuring their continued prosperity. The precipitous decline in the use of Standard Mail for marketing products and services is an illustrative example of the unwanted choices many postal customers have had to make because of the economy. The Postal Service believes it can, and should, find ways to help its customers increase their use of mail during these challenging economic times (pp. 1 -2).

On p. 3, Poor Richard discovers that the sale will run from July 1 to September 30.  A 30% discount for 3 months, that’s some sale! Oops, not so fast . . .here’s a catch on p.4:

The “Summer Sale” program will run from July 1, 2009, through September 30, 2009, and will provide a 30 percent rebate to eligible mailers on Standard Mail letters and flats volume above a mailer-specific threshold. The threshold is calculated by taking the percentage change between a mailer’s postal fiscal year-to-date (October 2008 through March 2009) volume and the volume mailed in the same period last year, and applying that percentage to the volume the mailer mailed between July 1, 2008,
and September 30, 2008.

So, the deal’s not so sweet.  The 30% discount only applies to the increase of mail volume in relation to the ratio of last year’s to this year’s mailings from October to March, factoring in of course the projected daily volume of pork belly contracts in the same period and the average shoe size of a U.S. mail carrier.

Reading on, Poor Richard discovers another hitch:

Qualifying mailers must be able to demonstrate volume of at least one million Standard Mail letters and flats, between October 1, 2007, and March 31, 2008, for one or more permit imprint advance deposit account(s), precanceled stamp permit(s), or postage meter permit(s).

This is looking less like a sale to Poor Richard. One million Standard Mail letters effectively rules out 100% of my customers. In fact, it probably rules out 99.9% of the mailers in South Georgia. And reading further:

Mail service providers (MSPs) are not eligible for the program.

It also rules out mail service providers, like AlphaGraphics; who if they might be large enough to aggregate and mail a million pieces of mail or so for their  customers and wanted to promote mailing services and pass along a little discount, would not be eligible to participate.

“Not a sale at all,” thinks Poor Richard.

The next couple of pages communicate the Postal Service’s intent to contact eligible mailers by letter and then direct them to a website to register to participate in the summer sale. The projected additional revenue for the USPS from the sale is between $38 and $95 million with costs at around $1 million to administer the Summer Sale.  A respectable projection of return, but qualified with this statement:

In particular, an overestimate of the additional volume generated by the incentive or an underestimate of the administrative effort required could unfavorably affect expected financial performance. (p.7)

Unexpected costs related to the malfunction of the response website are also presumably not included. The remaining 23 pages of the .pdf file encompass further justifications of the US Postal Service’s desire to try a “sale,” the regulatory provisions which allow them to do so, why the Postal Regulatory Commission should approve the request, and 17 pages of appendices that detail applicable postal rates, projections on pork belly contracts and historical data pertaining to the average shoe size of a US Postal Service Mail Carrier.

Poor Richard might humbly suggest that if Standard Mail is indeed in “precipitous decline” (and I have no doubt that it is), this proposal is unlikely to rectify the situation. I might also point out that a rate increase is scheduled for May 11 that will presumably do little to reverse the decline or encourage postal service customers to “invest in their continued prosperity” through a return to conventional mail.

Mail volume, like print volume, is decreasing; but there remains a need and demand for both services, at least in the near term. Mail has come under competitive pressure since the introduction of the telegraph, but in today’s communications environment, the pressures on both mail and print are extreme.  Barring a collapse of the Internet, mail and print volumes will continue to decrease. That said, there are still applications where printed mail is the best solution. Direct mail is demonstrably more effective with the 45 and over age group (dinosaurs like me, irrespective of Facebook enrollment). E-mail blasts will never have the impact of a well-written letter, especially if it is personalized.  Even “junk mail,” because it is tangible, has measurably justifiable place in some marketing campaigns.

Because the cost to disseminate printed mail is  higher than electronic communications, it is necessary to justify its value.  Specifically, this can be measured as ROI (return on investment) in any campaign.  It is also important to make it easier for customers to access and understand both printing and mailing. Poor Richard thinks that the US Postal Service is not succeeding in this area. Recent changes to the postal code (Move updates and the IM barcode) have been cumbersome to implement, difficult for mail service providers to understand, and completely inscrutable to our customers.  These changes have not really provoked anger among USPS customers, because they expect this kind of clumsiness, but the customers are very definitely not encouraged to increase their volume of mailing.

Perhaps the USPS should consider doing something proactive for their customers to encourage them to continue to consider mail as a viable means of communication.  Do you think a sale would work?