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How Would You Make Over the U.S. Postal Service?
From Inc.com
With bankruptcy looming, the U.S. post office needs a major fix. We asked Inc. 500 CEOs how they would approach the problem
By Darren Dahl | Oct 1, 2009
Everyone agrees that the U.S. Postal Service could do better. With bankruptcy looming, there’s a consensus that big changes need to happen, most involving cutting staff and scaling back services. But what if we could unleash the creative ingenuity of entrepreneurs to improve the post office? We asked Inc. 500 CEOs how they would approach the problem. Here are some of their responses.
The USPS needs a digital mail system. Your physical address could become your username, with the post office allowing you to turn off physical delivery of mail, like banks have done with bank statements. Recipients could choose to have their physical mail delivered to their home mailboxes for archiving once a month. By creating and owning the digital postal service market, the USPS could greatly reduce costs and become profitable, useful, and relevant for the next 100 years.
Aaron Houghton
Chairman and co-founder, iContact
Durham, North Carolina
The mail carrier could do pickups and charge a monthly pickup fee, just like FedEx and UPS, while keeping the letterbox as a free service. Simply adding a $25 monthly fee for businesses that want a daily mail pickup would be something that many businesses would jump on. If you had even 20 percent of the small-business market, you could generate an extra $60 million a year. If the USPS also cut retiree benefits by 40 percent and operating costs by 10 percent, along with raising rates by 5 percent, it could turn a $7 billion loss into a $4 billion profit.
Sandeep Walia
CEO, Ignify
Cerritos, California
Raise the rates on first-class mail. It is the postal service’s core, and it has a monopoly to deliver it. This system actually works and is the most profitable part of the USPS. When the USPS’s first-class rates are compared with those in other industrialized countries, though, they are grossly underpriced. A similar-size letter mailed in the U.K. costs 65 cents versus 44 cents with the USPS; in Germany, it costs 78 cents. Using 2008 statistics, each one-penny increase in the first-class mail rate would add over $900 million in revenue. If you raise it by 5 cents, you add another $4.5 billion.
Harry Geller
CEO, SoDel Concepts
Bethany Beach, Delaware
When it comes to shipping small packages, the USPS is cheaper than its competitors and offers comparable and sometimes even faster delivery times. However, since it doesn’t offer reliable tracking, we pay a premium to ship most of our packages with UPS. If the USPS tracked packages as well as UPS, it could capture a lot of business.
Sean Harper
Co-founder, TSS-Radio
Chicago
The USPS is an out-of-date concept. I don’t think my 18-year-old son has ever written a letter. For him, the post office is about as relevant as cassette tapes, rotary phones, and broadcast television. The USPS doesn’t need to be fixed — it needs to be sold off.
Tony Paquin
CEO, Paquin Healthcare Companies
Celebration, Florida
Copyright © 2009 Mansueto Ventures LLC. All rights reserved.
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Plunge in Credit-Card Mailings Slows
Could this be some good news for a change!From Brandweek
Aug 14, 2009
- Mark Dolliver
When the credit crunch took hold last year, it stanched the usual flood of direct-mail credit-card mailings to U.S. consumers. The subsequent meltdown of the financial system had its own restraining effect on such offerings. But now, a report from Synovate says the research firm’s Mail Monitor operation has detected a bottoming out in the volume of such solicitations.
In the second quarter of this year, says the report, households received 349.1 million credit-car offers in the mail. That’s 67 percent lower than the level of mailings in the same quarter of 2008. But it’s down just 6 percent from the level of first-quarter 2009. Some of the big mailers even increased their volume during the second quarter. Bank of America’s mailings were up 77 percent from the first-quarter-2009 level, and Citibank’s were up 65 percent. Noting that credit-card issuers have been growing less risk-averse than they were earlier in the recession, Synovate goes so far as to predict an “uptick” in card offers next year.
An earlier report from Mintel Comperemedia noted a stabilization (after two years of declines) in the number of mailings sent to households promoting mortgages and home-equity loans. But the nature of the offers has shifted, given lessons consumers have learned the hard way in the past year. Notably, direct-mail offers of adjustable-rate mortgages have “fallen out of favor,” according to Mintel’s analysis.
Of course, the fact that companies are making offers of credit cards and loans doesn’t necessarily mean people are taking them up on it. Polls during the past year have consistently found consumers professing their aversion to taking on more debt of any sort. Typical of the genre was a Gallup poll released last month (based on fieldwork in June) in which 46 percent of respondents said it’s “a bad time to borrow money,” vs. 17 percent saying it’s a “good time” to do so.
Postal Service health is still a concern
By Juliana Gruenwald CongressDaily July 30, 2009 While there is little disagreement that the U.S. Postal Service is facing a severe financial crisis, lawmakers voiced concerns on Thursday over the proposed solutions, which include closing some branches and possibly reducing deliveries to five days a week.
GAO this week said it was adding the Postal Service to its list of “high-risk areas” needing attention by Congress.
It said the USPS is facing a “deteriorating financial situation” and is on track to end the year with a net loss of $7 billion. Its financial woes are due to the ailing economy and declining mail volumes as more people and businesses bypass snail mail for e-mail, text messaging and other forms of electronic communications.
At a House Oversight and Government Reform Federal Workforce and Postal Service Subcommittee hearing, lawmakers pressed the USPS for details on what criteria would be used in determining which of the proposed 3,200 suburban and urban branches under consideration would be closed.
USPS acting Vice President Jordan Small said fewer than 1,000 post offices out of the list of 3,200 are likely to be closed. The criteria USPS will use in determining whether to close a facility is a branch’s proximity to other branches and the consuming habits of postal customers in that area.
He declined to give an estimate of how much would be saved by the closures and by eliminating Saturday deliveries. Small said USPS would have a better sense of the estimated cost savings in October when a study on such moves is complete.
But some lawmakers voiced concern about the potential impacts on their communities. “While I admit, the finances here are very grave … there is a need to conduct ourselves with, I think, a thoughtful approach … and do it in a way that causes the least amount of disruption,” Federal Workforce and Postal Service Subcommittee Chairman Stephen Lynch, D-Mass., said. Rep. Gerry Connolly, D-Va., said many of his constituents who have long commutes to work would be unable to visit a post office if they are not open in the evening.
Del. Eleanor Holmes Norton, D-D.C., chastised the postal service for taking too long to implement the necessary reforms but then quizzed Small on whether any post offices in Washington are on the list of possible closures. For the most part, business groups dependent on the postal service said they support the proposed changes if they will help ensure USPS’s viability.
But they voiced strong opposition to raising postal rates. Noting that the bad economy has hurt their industry as well, “mailers cannot shoulder another rate increase,” the Direct Marketing Association’s Jerry Cerasale said. Federal Workforce and Postal Service Subcommittee ranking member Jason Chaffetz, R-Utah, said lawmakers should consider providing USPS with economic stimulus funds and urged USPS to do more to make itself more relevant, perhaps through assisting in conducting the 2010 census.
Advertising Will Change Forever
From Advertising Age July 20, 2009
By Josh Bernoff
Digital Spending Will Nearly Double in 5 Years, But Ad Budgets Won’t
Here’s one of the things we do at Forrester Research: we interview as many marketers as we can about their plans, identify trends and project future likely conditions, and then we put together some numbers to make a projection. If you’ve ever seen a Forrester projection, it comes from a process like this.
This means that inside every projection is an idea or ten about the future. Those ideas can be powerful, and they come from research with marketers and consumers.
My colleague at Forrester, Shar Van Boskirk, just published our five-year interactive marketing forecast. The idea inside it is the real kicker.
In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement “we will increase budget for interactive by shifting money away from traditional marketing.” Only 7% said “we have no plans to increase our marketing budget.”
Unlike the last recession, digital marketing is no longer experimental. Now it looks more like advertising is inefficient, relative to digital. More than half of the marketers we surveyed said that effectiveness of direct mail, TV, magazines, outdoor, newspapers, and radio would stay the same or decrease within three years. In contrast, well over 70% expected the effectiveness of channels like created social media, online video, and mobile marketing to increase.
The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets won’t grow much.
This is huge.
It means we are all digital marketers now, since digital is at the center of many campaigns anyway.
It means media is in trouble, or at least in the middle of a transformation. For example, online video ads, which will be about $870 million this year, will grow to over $3 billion in 2014. What will this do to networks plans to put more of their shows online in places like Hulu. How will it accelerate some newspapers plans to become more and more centered around online?
And it means that social “media,” which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn’t even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.
Pundits have been declaring the end of mass media and advertising for years now. From my 14 years of experience analyzing this stuff, I’ve learned that things die very slowly, but there are real trends you can see. If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.
Yes it’s coming, Web 3.0
Marketers want to get as close as possible to buyers with the greatest potential, well, web 3.0 continues the process to that end. Some tidbits from HowStuffWorks.com.
Internet experts think Web 3.0 is going to be like having a personal assistant who knows practically everything about you and can access all the information on the Internet to answer any question. Many compare Web 3.0 to a giant database. While Web 2.0 uses the Internet to make connections between people, Web 3.0 will use the Internet to make connections with information. Some experts see Web 3.0 replacing the current Web while others believe it will exist as a separate network.
It’s easier to get the concept with an example. Let’s say that you’re thinking about going on a vacation. You want to go someplace warm and tropical. You have set aside a budget of $3,000 for your trip. You want a nice place to stay, but you don’t want it to take up too much of your budget. You also want a good deal on a flight.
With the Web technology currently available to you, you’d have to do a lot of research to find the best vacation options. You’d need to research potential destinations and decide which one is right for you. You might visit two or three discount travel sites and compare rates for flights and hotel rooms. You’d spend a lot of your time looking through results on various search engine results pages. The entire process could take several hours.
According to some Internet experts, with Web 3.0 you’ll be able to sit back and let the Internet do all the work for you. You could use a search service and narrow the parameters of your search. The browser program then gathers, analyzes and presents the data to you in a way that makes comparison a snap. It can do this because Web 3.0 will be able to understand information on the Web.
Right now, when you use a Web search engine, the engine isn’t able to really understand your search. It looks for Web pages that contain the keywords found in your search terms. The search engine can’t tell if the Web page is actually relevant for your search. It can only tell that the keyword appears on the Web page. For example, if you searched for the term “Saturn,” you’d end up with results for Web pages about the planet and others about the car manufacturer.
A Web 3.0 search engine could find not only the keywords in your search, but also interpret the context of your request. It would return relevant results and suggest other content related to your search terms. In our vacation example, if you typed “tropical vacation destinations under $3,000″ as a search request, the Web 3.0 browser might include a list of fun activities or great restaurants related to the search results. It would treat the entire Internet as a massive database of information available for any query.
Summer Postage Sale – well, sort of a sale, no, more like a small rebate
summer sale
To those that are excited about the impending summer postage sale, there are a few details you need to know, first, did you receive a letter from the USPS recently?
Here is what it looks like: summer-sale-electronic-letter
Here are the details:
The USPS has made it official (almost) that they are going forward with the proposed ‘Summer Sale’ event. The PRC must still weigh in with their decision, which is expected in late May, to make this program official. This program would provide a 30% postage credit on mailings submitted between July 1, 2009 and September 30, 2009. This incentive program is designed to increase mailing activity during the usually dormant summer months, when the USPS has their most excess capacity available.
Unlike most sales however, there are a multitude of qualifiers that apply to the Summer Sale.
Who and what qualifies?
For the most part, the USPS has already determined what mailers qualify. Letters were sent out on 5/7/09 to approximately 3,200 mailers whom they determined will be eligible for this program by utilizing the mail volume data that exists within their internal system.
1. This program only applies to Presorted Standard letters and flats.
2. The next qualifier is that you must have mailed a minimum of 1,000,000 pieces during the time period of October 1, 2007 and March 31, 2008. Total volume is calculated by mailer, so even if you utilize multiple permits, your total volume will be calculated across all permits that are associated to your organization. This also applies to “Ghost Numbersâ€, which are created if your mail is sent through a Mail Service Provider. If you feel you are eligible, but have not received a letter, then you can request a contact by emailing your information to summersale@usps.gov.
If you have met the criteria above, you are ready to begin to calculate the ‘Sale’ portion of the program. The 30% postage credit will be given only on the number of mail pieces that exceed your mailing threshold for the time period of July 1, 2009 to September 30, 2009. The caveat to this all is that your mail volume in October must not fall below your mailing threshold for that month. If this occurs; the total credit accrued from mailings between 7/1/09 to 9/30/09 will be deducted by the amount of pieces that fell below the threshold in October and that will be the final credit. The credit will be issued at some point in December of 2009 once the USPS has completed the above calculations.
How to calculate your potential savings:
Below is an example of how to calculate the savings that you as a mailer may receive through this program. Listed in this example is the all important Threshold, which will be the key to planning your mailings to take advantage of this program.
1. Base volume (7/1/08 – 9/30/08): 500,000 pieces
2. Trend:
a. Volume 10/1/08 – 3/31/09 = 1,800,000 pieces
b. Volume 10/1/07 – 3/31/08 = 2,000,000 pieces
c. a/b = (1,800,000 / 2,000,000) = .90 or 90%
3. Base x trend = Threshold:
500,000 x .90 = 450,000
4. Rebate = (Actual volume – threshold) x (actual postage cost / actual volume) x 30%
a. Actual volume for 7/1/09 – 9/30/09 – threshold =
475,000 – 450,000 = 25,000 pieces
b. Actual postage cost / actual volume =
$103,075 / 475,000 = $0.217
c. Rebate =
25,000 x $0.217 x .3 = $1627.50
The October Effect:
It is important to keep your mailing volume for October in mind when factoring the potential savings. If your volume falls below the calculated threshold, then your overall credit will be impacted. Below is an example of how to calculate this effect.
a. October 2008 volume x trend (in #2 above) = October threshold:
300,000 x .90 = 270,000 pieces
b. If October 2009 (260,000 pieces) < October threshold:
Threshold – actual = adjustment
270,000 – 260,000 = 10,000
Rebate adjustment
a. Actual volume – summer sale threshold – rebate adjustment:
475,000 – 450,000 – 10,000 = 15,000
b. New rebate:
15,000 x $.217 x .3 = $976.50
For those of you that have received a letter; be sure to certify the volume that the USPS has provided to you since this will be a binding once you have agreed to enroll in the program. Also be sure to have your response in by August 1st, 2009.
This program is a great way to potentially reach more customers at a lower cost and therefore enhance your business’ ROI. The system is not perfect, but it is a step in the right direction for the USPS to utilize their new found pricing freedom to help mailers.
From the Federal Register today:
Federal Register Notices
DATE: Pending publication in the Federal Register.
Standard Mail Volume Incentive Program (aka Summer Sale)
AGENCY: Postal Serviceâ„¢.
ACTION: Final rule.
SUMMARY:
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®), to add section 709.2 which introduces new standards for a special volume incentive program for mailers of Standard Mail® letters and flats with mail volume exceeding their individual USPS™-determined threshold levels. The program period will be from July 1, 2009 through September 30, 2009.
EFFECTIVE DATE: July 1, 2009.
FOR FURTHER INFORMATION CONTACT: Kevin Gunther at 202-268-7208.
SUPPLEMENTARY INFORMATION:
The Postal Service is implementing a volume incentive program for qualified high-volume mailers of commercial or Nonprofit Standard Mail letters and flats, for volume mailed between July 1, 2009 and September 30, 2009, above their USPS-determined threshold level. This program encourages mailers to provide new volume and to take advantage of our current excess capacity to process and deliver additional volume.
Second is the new First
So, I was at this meeting last night and there were several round table discussions going on. The thing that struck me most was that people with these high tech software solutions were lamenting the fact that they could not get people to understand how they would help their business and that their sales cycles were 2 years or better.
It dawned on me that it might be a better strategy to copy and improve rather than innovate. Think My Space and Facebook, or Ford and Toyota or MP3 players and Ipods. There are many more examples where companies that may not have been first to market took a concept and improved it and made it so much more customer friendly that they blew away the originator. So the real key goes back to the old fashioned concept of customer service. When I think about it, the guys who were talking last night were more focused on how great their software was and how amazing the technology is, but I did not hear much-ok I didn’t hear anything-about how much their customers loved the product.
People Try Twitter One Month, Then Fly
From PC World Wednesday, April 29, 2009 4:22 AM PDT
It’s good to know I am not alone: Many other people use Twitter a few times and can’t think of a good reason to come back. With all the hype about Twitter’s 140-character version of living, I’d gotten the impression that I’m the only one on Twitter who doesn’t get why Twitter matters.
Not so, according to Nielsen data that shows 60 percent of people who use Twitter one month, even at its peak popularity, don’t come back the next. While it used to be that 70 stayed away that improvement is not much to brag about–Twitter’s customer retention is prone to peaks and valleys.
Twitter needs to be concerned about this, especially since both MySpace and Facebook have failure to return rates only about half that of Twitter. Put another way, 60 percent of MySpace and Facebook users come back the next month, about the same percentage that do not return to Twitter on its best months.
It is easy to think of reasons for this. Twitter is a one-trick pony. If you do not like tweeting or reading the tweets of others, there are not a whole lot of reasons to return.
Both MySpace and Facebook, for all their problems, offer more services than Twitter. It is easy to see how places where users can do more things could make the two services “stickier” than Twitter.
This does not surprise me. Twitter feels really light to me. Some people, obviously, become addicted but large numbers of others just walk away. That is not such a big deal right now as Twitter is in major growth mode. Growth hides all manner of sins.
However, if that growth mostly results in new users sampling and leaving, the growth will not last. Worse, it may be hard to get those unhappy users to return should Twitter ever expand its product features.
It is not clear whether Nielsen’s measure of Twitter’s return rate counts people, like me, who use a third-party application for their twittering. I do not return to Twitter nearly so much as I return to TweetDeck.
Today, it would be much easier for TweetDeck to make money off my use of Twitter than it would be for Twitter itself. Again, I do not see how these social networks ever make the big money that investors are betting they will.
To be honest, I am using Twitter mostly because I think “it’s good for me,” like some sort of social network vitamin. Like most good intentions, it will be interesting to see how long that lasts. Nevertheless, I am pretty certain to make it into next month.
I’m sure Twitter will be happy.
David Coursey tweets occasionally, and reached by e-mail using www.coursey.com/contact.
The IMB has great possibilities, but they don’t come free!!
Unknown to many mailers, the Postal Service last week quietly distributed to Confirm subscribers an update to its Publication 197, Confirm User Guide, which includes specifications and requirements to Confirm data provisioning for Full Service Intelligent Mail barcode users that will result in the need to purchase additional Confirm subscriber IDs at $2,500 for each non-subscriber in order to have the data provisioned to that entity. Mailers are not pleased at what some see as a covert move by the Postal Service that will result in onerous price increases for Confirm Service.
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