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Posts Tagged ‘United States Postal Service’

How to save the Post Office?

Wednesday, December 2nd, 2009

The US Postal Service lost $3.8 billion last year. While still one of the most effective marketing channels, postal mail is in danger of extinction. Can the post office be saved? Postal Journal is a new website that aims to find a solution.

Postal Journal's mission is:

To explore the evolution of the American postal system as part of the nation's 21st century economic and communication infrastructure. To facilitate an exchange of postal perspectives by individuals without regard to past or present occupational affiliations.

The website is not high on design, but it contains links to a number of interesting proposals, such as the "Examination of Potential Postal Business Models" by Alan Robinson. He studies various models and proposes consideration of a private corporate model as other services have done successfully:

Postal Operators Spectrum of Business Models

Is Robinson's the right business model? That's a good debate. And it's good that the Postal Journal website is presenting this idea and many others for consideration. Unfortunately, the website is not interactive… it would be very helpful to see discussion and debate related to the various proposals.

The Postal Journal site has been made possible through the support of the Association for Postal Commerce, Direct Communications Group, the Direct Marketing Association, the Envelope Manufacturers Association Foundation, and the Mailing and Fulfillment Service Association – all of whom have a vested interest in a viable postal service.

Is Direct Mail Doomed?

Tuesday, May 26th, 2009

Direct Mail Falls, E-mail Soars (May '09) MediaPost just published a story entitled "Direct Mail Doomed, Long Live Email" which covers research by Borrell Associates entitled "Direct Mail Falls, E-mail Soars (May '09)". As you might guess from the title, the story spells the demise of direct mail:

After making quick work of print newspapers, and the Yellow Pages industry, "The kudzu-like creep of the Internet is about to claim its third analog victim," warns a new report from research firm Borrell Associates. The victim? "The largest and least-read of all print media: Direct mail."

"Direct mail has begun spiraling into what we believe is a precipitous decline from which it will never fully recover," Borrell predicts. More specifically, it is projecting a 39% decline for direct mail over the next five years, from $49.7 billion in annual ad spending in 2008 to $29.8 billion by the end of 2013.

If Borrell is correct, direct mail will fall from the premiere placeholder for ad revenue to the fourth — behind the Web, broadcast TV, and newspapers.

Is direct mail really doomed?

The financial situation of the USPS is certainly a recipe for disaster: they seem to be in a "death spiral" where their cost burdens drive up postage which drives down direct mail ROI which reduces revenue and profit which drives postage higher (repeat…). Electronic bill presentment and bill paying is taking a big chunk out of the USPS pocketbook. Credit card mailers have pulled back significantly because of their own problems. The USPS' list of financial problems is long and getting longer every day.

Cross-selling, up-selling, and retention programs (i.e. marketing to current customers) can be very effective through email if done right. This reduces demand for direct mail.

However, prospecting for new customers through email often fails miserably (particularly when the wrong mailing lists are chosen). This is where direct mail still shines despite the all the economic challenges of getting direct mail to the mail box. Response rates, average order, and ROI are higher with direct mail prospecting programs. With good mailing lists, results are even better.

What do you think? Can prospecting save direct mail? Or will spiraling postage and other cost increases eventually make direct mail inviable?