PostalCare Reform

August 22, 2009

Poor Richard indulges in anachronism. He still reads newspapers.  You may remember them, they’re printed with ink on cheap paper. People used to take them on buses and subway cars to annoy others. They could be rolled up to train dogs, much to the dismay of the paper boys (another anachronism).  What Poor Richard has been reading lately is a lot of conjecture about what a government sponsored health care system would be like and how it might be administered.

There seems to be a great deal of skepticism amongst a very vocal segment of the population  regarding the capability of the U.S. government to administer a single payer system.  Our intrepid and career-oriented legislators have euphemistically entitled this version of a health care fix “the public option,” with the inference that if the private option currently in existence is irrevocably broken, the public option that they propose can’t be too much worse.

Poor Richard finds that comforting, I think.  But he doesn’t understand the reticence to create another multi-trillion dollar bureaucracy to administer health care.  After all, it’s only money (we can always print more) and the U.S. government is so good at bureaucracy.

Mailman holding human brain

Mailman with brains

And I am simply astounded that none of our clever would-be statesmen have grasped the phenomenal opportunity to re-employ a failing public bureaucracy that is dangling right before their eyes. In past blog posts, Poor Richard has written about the tribulations of the U.S. Postal Service (See Neither Rain, Nor Snow, Nor Dead Economy). After years of study led them to the realization that people don’t want to mail anything anymore, the USPS has decided to let some people go.  Fortuitously, they are releasing an army of career bureaucratic types at the exact time these folks are needed . . . to administer the new health care system!

Downsized postal workers are eminently qualified to run the new health care system.  Never mind that most of them don’t know anything about biology, physiology and the like. They all know how to follow the regulations. There is no way that the new regulations for a national health insurance program could be more cryptic or nonsensical than USPS regs. It’s a natural fit . . . today a mailman, tomorrow a claims agent or even an underwriter!

Just consider the benefits:

  • The postal workers are already on the government payroll.  There’s no need to re-test them for incompetence.
  • Instead of hundreds of thousands of early retired postal workers placing a burden on the USPS retirement system, they could be gainfully employed spending government money and determining whether Aunt Sally really needs a new kidney.
  • There would be no concerns about health care delivery under the new system. USPS employees are really good at delivery.
  • If the regulations for the “public option” don’t make sense, it won’t be an obstacle to the re-employed postal workers. They’re used to dealing with irrational regulations and have no compunctions about explaining nonsense to their customers. It’ll be even easier if they’re the only game in town!

Poor Richard suggests that we call the new system PostalCare, in recognition that the new bureaucracy will probably benefit the newly re-employed postal workers more than the rest of society.  Poor Richard also agrees with President Obama that Congress should act in great haste . . . we wouldn’t want this wonderful opportunity to slip away!

My apologies to our friends at the postal service.  This one was just too good to pass up.  Life is grand, isn’t it?

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Direct Mail and the Internet

August 10, 2009

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?

August 1, 2009

mailtruckPoor 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