“Lavelle Pepper with the post office in Shreveport says they too are feeling the affects of the same disease hitting the country… a struggling economy. ‘We employ about 685,000 people. If we do layoffs it would include clerks, carriers, mail handlers across all crafts.’”

“Pepper says the postal service is looking to eliminate 40,000 jobs nationwide. There’s not an exact number on how many of those could be from the Ark-La-Tex. Pepper says workers who are not part of union with six or less years of service would likely be the first on the chopping block. ‘We’ve identified 16 thousand people that are not covered under contract. We’ll see what those numbers add up to.’”

Meanwhile, on the usually well-regarded Mish’s Global Economic Trend Analysis, blogger Mish Shedlock mentions the story and then comments “I certainly am in favor of this.”

Really? I certainly am not.

How is anyone helped by the loss of 40,000 postal jobs? Or 40,000 jobs in any field? How is the country made better?

If 40,000 people lose their jobs that means a lot of local communities will see an increase in unemployment costs and foreclosures. A lot of households and families will suffer. Home values — even for Mish’s home — will fall as the inventory of locally-foreclosed properties increases. There will be fewer people to pay taxes meaning higher taxes for those who do pay or reduced public services.

And no, people cannot just be instantly retrained.

We have to change the way we think. Given that two-thirds of our economy is based on consumer spending we ought to hope that everyone has a job and that everyone has access to education and training so they can get a better job. Alternatively, if we favor lots and lots of job losses we’ll soon have an economy where most of the population will live in poverty or something close to it. That sure doesn’t sound like fun and anyone who has been to a poor country would agree.

Until this point the Postal Service has generally reduced its workforce through attrition and retirements — in other words, without layoffs. The Federal Times has reported that this policy MAY change with the elimination of 250 jobs at headquarters.

Moreover, in July the Postal Service sought a Voluntary Early Retirement Authority (VERA) from the Office of Personnel Management (OPM). Note the expression Voluntary Early Retirement. Not lay-offs. Not firings. Rather a continuation of past policies.

There is a huge difference between 40,000 voluntary separations and a reported 250 lay-offs. This is not to say that 250 job losses are somehow good, but rather that no one is thinking in terms of 40,000 lay-offs.

Indeed, the Postal Service has just issued this statement:

“A news story currently in wide circulation is reporting that the Postal Service will soon layoff 40,000 employees. This story is not accurate. Originating out of Shreveport, LA, the story does quote a Postal Service spokesperson. Unfortunately, that spokesperson was in error. The Postal Service is not laying off employees. Efforts to match our workforce to a reduced workload are focused on voluntary early retirements. Voluntary early retirement has been offered to a number of employees and to date, 3,685 employees have accepted the offer.”

Technorati Tags: attrition, lay-offs, Mail & Jobs, retirement

Figures from the Federal Reserve show that “the number of checks paid in the United States has fallen from 42 billion in 2001, to 37 billion in 2003, and to 30 billion in 2006.”

Whoops. That’s 12 billion checks that vanished in just five years. You can bet that the trend continues and that future reports will show even fewer paper-based checks in 2008 and beyond.

Why is this a mailstream matter? Why are postal jobs at stake? Should the Postal Service be concerned?

In many cases the reduction in check volume reflects the increased use of electronic deposits. If this means that a foreman no longer goes around the plant floor on a Friday giving out envelopes then we do not have a postal issue in the sense of deliveries and such.

But many checks are sent through the mails. It’s difficult to imagine that we have 12 billion fewer checks and no mail volume reduction. Okay, it’s impossible to imagine.

The Postal Service and the mailer community cannot undo either progress or technology. But the question ought to be asked: If the volume represented by checks — those checks that really are in the mail — is being reduced, then what new volume is being created?

This is the essential issue for the mailer community. As postal volume declines and fixed expenses largely remain, increased hard costs per piece must be absorbed by remaining users. As prices per piece rise the incentive to avoid the postal system grows.

What to do? The Postal Service needs to demonstrate why paper-based communication and exchange have value in the electronic era. There’s a good argument to be made — if only someone would make it.

Technorati Tags: checks, mail, Mail & Jobs, mailstream, postal, volume

Given that mail is used by virtually all environmental, consumer and nonprofit groups, it should be fairly obvious that mail has a minimal environmental impact. That said, no product or service is without impact, so it makes sense to ask two questions: How does mail relate to green concerns and how can the environmental impact of mail be reduced?

Pitney Bowes has now comes out with an interesting discussion of such issues. Entitled The Environmental Impact of Mail: A Baseline, the 30-page report looks at such matters as CO2 emissions, carbon footprints, forest acreage, landfill use and related topics.

One item that struck me as interesting was CO2 generation. The U.S. annually produces 20.1 tons of C02 per person. How much of that is from the production and distribution of mail?

To get the answer we first need to convert tons into grams: For instance, according to the Thomas Jefferson National Accelerator Facility there are 909,091 grams of lead in a one ton, so 20.1 tons would equal 18,272,729.1 grams.

We can then look at mail. As the Pitney Bowes study explains:

“The USPS delivers about 515 letters per capita per year. Using a general estimate of 25 grams of CO2 per letter generated within the postal value chain and the worst case scenario of 50 grams of CO2 per letter, the distribution of these letters generates 13 – 26 kg of CO2 per capita.”

Let’s see, in one kilogram there are 1,000 grams, so 13 to 26 kilograms would equal 13,000 to 26,000 kilograms.

The sum of 26,000 goes into 18,272,729.1 a total of 702.797 times.

Seen the other way, 26,000 equals 0.001422 of 18,272,729.1.

The idea of the Pitney Bowes study is not that mail is without environmental impact, but rather that mail has a minimal green cost; efforts should be made to reduce such impact as mail has even further; and that all products and services — including email — have an environmental cost.

No less important, environmental costs must be balanced against the benefits produced by a given product or service.

No product or service has a zero impact and mail represents some 8,300,000 jobs nationwide. Given the minimal environmental cost of mail does it make sense to lose jobs in every neighborhood and community and to close local post offices in the quest for environmental perfection — something which can never be achieved?

Responsible environmental groups all have the same answer: They mail.

A copy of the study is available by pressing here.

Technorati Tags: benefits, CO2, costs, environment, grams, green, mail, tons

For the past few years the mail, and by implication the Postal Service, has been under attack. Although strategic and targeted responses have kept state do-not-mail laws from being passed or moving forward, the Postal Service and the people who depend upon the Postal Service, are losing the battle to win the hearts and minds of American consumers.

Recently, the Postmaster General announced that he had created a new position — the Vice President of Sustainability. The Postal Service is developing and sharing with its work force fact sheets that discuss the Postal Service’s accomplishments in “being green,” the value of the mail, and ways consumers can “manage their mail.” Personally, I do not think this is enough.

I think the Postal Service needs a Vice President of Survival. Just in case I get a chance to interview for the job, here is what I would tell the Postal Service it needs to do.

The Postal Service cannot let the dialogue focus around issues of “consumer choice” or the “environment.” The more time we spend talking about the mail in these terms, the more we pay homage to the buzzwords of those who don’t care if the Postal Service and the jobs it anchors survive.

Even if the Postal Service tries to do damage control and stay out of the fray by saying, “We just deliver,” this argument or position is also a loser. It’s too passive.

Big Brown and Dominos deliver. The Postal Service needs to focus, and get out the word, about what makes the Postal Service special.

The Postal Service needs to be LOUD and PROUD about its mission. If I were the Vice President of Survival, I would be a mail missionary. I would make it my job to persuade postal stakeholders, including customers, consumers, the labor force and others to become mail missionaries.

The Postal Service has a Constitutional mission to connect the country together. It is the only free access, universal communication channel. The Postal Service is sender-supported. There are no subscription or access fees.

The Postal Service runs on volume. On print and paper.

Any attack on mail volumes, print or paper, whether in the form of a law or a consumer movement that would curtail mail volume, would destroy the Postal Service and its ability to deliver on its mission.

Here are the messages that the Postal Service should be promoting. Let me make it clear. These are not lobbying messages. They are messages about the critical, country-connecting mission of the Postal Service.

1. Free Speech. Mailers have a right to send a message to all consumers as long as they pay the postage. There is no “right” to opt-out or choose what mail you want or do not want to receive. The right to send is part of the economic underpinning of the right to have access for free.

2. Economic Equity and Affordable Service. The Postal Service delivers mail and packages to a lot of people who depend upon mail delivery. Frequently these people receive very little mail but the mail they get is important to them. The housebound person who shops by mail, the senior who gets prescription drugs by mail, and the many households who get benefit checks, or payments by mail that are essential for their rent, food and expenses, are postal dependents.

The ability of the USPS to reach all households affordably and regularly is paid for by postage payers who want to reach all consumers and businesses. Much of the volume that underwrites the Postal Service’s network is advertising mail.

Any law, or consumer movement, that would give consumers a choice or incentive to opt out of the mail, or “redline” their mailbox, is elitist. There are a lot of “haves” in this country who get mail advertising from many sources. Most of these “haves” are wired, have cable, computers, Blackberrys, and Palm Pilots.

The “haves” do not need the Postal Service lifeline to get goods, services, and communications. Giving the well-connected upper crust some right to declare their mailbox a “gated community” will discriminate against the rates and services available to those who do not have so many communication choices.

3. Unrestricted Mail Promotes A Free Market System and More Jobs. The Postal Service has helped numerous small businesses get in business and stay in business.

The Postal Service helps businesses of all sizes with new products, services, and a way to reach consumers with “a better mouse trap.” For the past 25 years I have worked with an organization of small business advertisers. I have heard their testimonials about how coupons, shared mail packages, and classified ads in free papers help them get in business and stay in business. The mail remains the most democratic and accessible way a small business service provider, retailer, home-based business, or handyperson can target and reach a small-to-large audience.

I remember the story of a recently-divorced woman who lost everything and only knew how to clean houses. She sent a coupon in the mail to some well-heeled communities offering her services. What would have happened to her if these “we’ve-got-enough-mail-thank-you” households had declared their mailbox off-limits to mail paid for by senders?

America’s economic growth has historically been fueled by consumer spending. Anything that hurts or limits the rights of businesses to reach existing and potential customers hurts the American economy as a whole. It will hurt America’s small businesses, self-employed, and home service businesses the most. These are the businesses that are most dependent upon affordable and locally targeted mail.

Advertising is the fuel that helps businesses get in business and stay in business. You cannot just “build it” and hope they come. As a consumer, there are lots of great products and ideas I would never have discovered but for the coupons, catalogs, and mail offers that come to my door.

4. Mail Is Good. Mail shopping is fun and environmentally friendly. Lots of people like to shop. With the high cost of gas, traffic congestion, and the press of time, window shopping and mall-walking is not always possible. I would urge the Postal Service to promote and partner with the mailing industry about the pleasures of clipping coupons, cruising through catalogs, and finding values in circulars and shoppers.

The Postal Service should NOT be shaping its message by consumer opinion polls. If the Postal Service believes it has a mission, and believes it is doing the right thing, start telling people why. Create and share your message and story based on your own convictions.

What do I think makes the Postal Service special?

The Postal Service has REACH. The Postal Service’s ability to serve all, affordably and regularly, depends upon its ability to reach all.

The Postal Service, and the industry, needs to stop playing defense.

The Postal Service is driving America’s greenest, most democratic and affordable, SUV. That stands for SERVICE that is UNIVERSAL and VOLUME supported.

The Postal Service has a national network, touching and connecting all, that’s powered by print products and paper.

It is time for the Postal Service to start being LOUD and PROUD.

Technorati Tags: marketing survival, Postal Service

The current interest in mail-order shopping is hardly new. Mail order has been popular for more than a century, in large measure because direct mail assures low prices nationwide.

In the 1880s, consumers outside major cities depended on local stores with small inventories. Such stores were free to charge whatever the market would bear, and since there was often no other nearby source of goods and supplies, consumers paid high prices for common
merchandise.

Not only were local stores expensive, they were inefficient. Because they only served a small number of consumers, they could not place large orders. Without large orders, local stores could not get volume discounts that could mean big savings to consumers.

Enter mail order. Aaron Montgomery Ward started his catalog business in 1872 while Richard Sears mailed his first fliers in the 1880s. For the first time consumers were no longer captive. They could get attractive goods and prices whether they lived in the middle of Manhattan or a remote rural setting.

The contest between mail-order houses and local stores centered on three major issues — price, inventory and assurances — the very factors which made mail order houses successful.

On the issue of price, there was little doubt that mail order goods could be competitive.

The postal system allowed direct-mail companies to operate on a national basis. With a customer base that potentially included anyone with a mailbox, catalog companies could order in bulk, obtain huge discounts and then pass the savings on to consumers.

To see how this system worked consider the cost of bicycles. In 1897, according to Made in the USA, a history of American business by Thomas V. DiBacco, bicycles were selling from $75 to $100 — at least until the public saw the Sears Roebuck catalog. Sears, which sold thousands of units per week, charged $5 to $19.75 depending on the model selected.

Not only did Sears sell bikes, it sold just about everything. In 1897, according to the History of the U.S. Postal Service, “Sears boasted it was selling four suits and a watch every minute, a buggy every ten minutes, and a revolver every two minutes.”

Some mailers became so large that rather than buying from a factory at discount, they simply bought suppliers or created their own. In-house suppliers allowed mail-order firms to cut costs even further.

Not only did consumers want low prices, they also wanted variety — 20 kinds of dresses rather than two. Here again, the enormous volume generated by leading mail order houses made huge inventories not only possible but also practicable.

But price and variety, while important, have only limited value if the goods themselves are shoddy or poorly-made. So the mail-order firms protected consumers with powerful guarantees.

Montgomery Ward was one of the first companies to offer a money-back guarantee, and the Sears Roebuck pledge of “satisfaction guaranteed or your money back” is one of the best-known commitments in American business.

Today the marketplace has changed and so has mail-order marketing. Now firms of every size use mail order and the result has profoundly changed the American marketplace:

• Prices must be competitive regardless of location. If a local merchant cannot supply goods at reasonable costs, then consumers can turn to the national market created by direct mail.
• Because postage rates are the same everywhere, because the cost of a stamp is the same in both Alaska and New York, all sections of the country can compete on an equal footing.
• The economies of scale which work so well in manufacturing are also possible in retailing, especially when a “store” has no geographic boundaries.
• A company in a small community can reach consumers in the biggest markets nationwide through the mailstream.
• Merchandise which may be “seasonal” and out of stock in one area may be available through catalog companies that serve a national clientele.
• Residents of rural areas can get the same goods as those who live in major urban centers. And with mail order, those who live in country settings need pay no more than individuals who reside in the
  heart of major metropolitan regions.
• Mail order allows individuals to shop at their leisure, at 10 PM or at 6 AM according to individual needs and desires, a value not to be ignored in an era where two-worker families and single-parent
  households are common.
• Mail order makes specialization possible. For instance, while there may not be enough demand in one community to support a store that sells only carved wooden ducks, a catalog going to millions of people nationwide can easily support the plants and people who produce such carvings.
• Mail order allows local businesses to compete with huge national corporations. A hardware store, for example, can target consumers in a 1-mile radius with direct mail. Such small mailings may not make sense for a corporate giant, but they can produce excellent results at little cost for a local retailer.
• In practical terms, the Internet increasingly serves as a “front desk” where goods and services can be ordered — and then delivered (and sometimes returned) through the mailstream.

All in all, not bad for an industry that had it’s modern beginnings a little more than a century ago with Mr. Ward, Mr. Sears and a few stamps.

Technorati Tags: catalogs, choice, convenience, history, mail, Mail & Jobs, oppoortunity, options, postal, rural

America’s best marketing medium is universal, inexpensive, effective and efficient.

You don’t need a massive advertising budget, hundreds of outlets nationwide or a big-city address to become involved in direct mail marketing.

You can start small and have your program grow as your business expands. And if you already have an established business, direct mail can be used to enhance an existing marketing plan.

A direct mail program begins with a thorough analysis of the product or service being sold. For example, a company — we’ll call it Tonertronics — that sells small copiers for home offices is really marketing more than a device to make copies. Other values can be stressed to potential buyers, such as:

• Convenience — With your own machine, there’s no need to run down to a copy center at 8 pm just for one or two copies.
• Expense — The cost per copy is lower than a commercial copier might charge.
• Efficiency — If you have your own copier, you don’t have to wait for other people or worry that someone else will break the machine.
• Productivity — Instead of leaving home to make a copy, an individual can devote his or her time to income-generating activities.
• Warranty — A service agreement with an automatic loaner feature can assure that buyers will always have a machine available. Given a variety of values, the next step is to write and design an appropriate brochure.

Businesses, especially small or new organizations, can sometimes generate effective advertising material in-house, but organizations of all sizes commonly use direct response firms for such work. These companies can write copy, select paper and provide graphic design services to produce the look, tone and pitch most in tune with a potential market.

Once the brochure has been developed, the next step is to target the proper market.

You want to find that group of people who not only are most likely to have an interest in your product but also have the financial capacity to buy it.

To find the most likely buyers, Tonertronics can rent a list of home office workers from a specialized company with access to thousands of lists. List brokers have lists that can pinpoint home-based computer users, free-lance writers, public relations specialists and artists. Before renting such lists, however, the copier firm will want to make sure it is getting the best deal.

• Cost — Lists are generally rented on the basis of a charge per 1,000 names. The better the list, the higher the cost per name.
• Restrictions — Many lists are restricted so they cannot be used by those who compete with their owners, or by organizations and individuals offering items inconsistent with the goals of the list owner. A health magazine, for example, would be unlikely to rent its list to a firm that wants to market chewing tobacco by mail.
• Terms — Since lists are rented for limited periods of time and for a given number of mailings, it’s important to know how long and how often a list can be used.

Once a list has been acquired, the next step is to work with data processors who specialize in mailing list organization.

A data processor can take a basic mailing list and compare it against a national change-of-address database, a ZIP+4 directory, demographic information and other lists until the basic list is honed and perfected.

The list development process is crucially important to direct mailers. Every time a duplicate name is removed, or an unlikely contact is eliminated, the mailer pays less for printing, postage and handling.

To this point, there is a product, a mailer and a list. Now it’s time to insert materials into an envelope, label each envelope, and then apply the proper postage.

For small jobs, say several hundred to a thousand names, the work can often be done by hand through a small firm or a non-profit, sheltered workshop.

Inserting by hand is often impractical, however, especially when large volumes of mail are involved or a quick turn-around is important. Jobs of all sizes can be handled by full-service direct mail firms and direct response organizations that use automated equipment.

In addition to automation, larger firms sometimes offer another advantage as well: a full-time postal representative on site. In such cases, by having a postal employee at the mailer’s facility the Postal Service saves money and speeds processing because the delivery of millions of letters is streamlined.

Not all mailing firms are full-service operations, however. Some limit their activities to insertions, labeling and postage and in such cases customers will often hire a lettershop.

A lettershop is a specialized company that navigates through the postal system to find the best possible rates for clients. As an example, a lettershop might arrange direct transportation from a printer to the particular post office which offers the best rate. Direct delivery to an individual post office can eliminate many distribution layers as well as excess postal costs.

Once the mail goes out and orders come in, the mailer — in this case the copier company — must begin the delivery process. Mailers can fill their own orders, but many prefer a fulfillment service which takes the orders, assembles the ordered goods for shipment and then sends the merchandise to the customer.

Fulfillment services are so effective that a company can sell by mail and never handle its own products. Instead, products are sometimes sent from manufacturers directly to fulfillment firms and then from fulfillment companies to individual consumers. At the end of the direct-mail process, the copier company should have orders, hopefully at a lower cost per sale than otherwise might be
available with alternative media.

And if the company is really savvy, it will realize that it may have a new asset as well. The individuals who bought copiers might also want other products and services, information that a list manager may be able to market to other firms with an interest in home-office sales.

Technorati Tags: advertising, business, mail, marketing, mationwide, national, postal

Our Founders had vision: the postal system in this country is so important that it’s actually included in the U.S. Constitution — Section 8 says that only Congress shall have the power to “to establish post offices and post roads.”

Why Congress? And why not the states? Because the Founders knew that unlike the situation in Europe, a single postal system with one set of standards and one set of prices could bind the national together. All citizens, no matter where they lived, would pay the same fee for the same services.

No less important, the U.S. postal system requires no payments from recipients. We have a sender-funded delivery system, meaning that senders take all the financial risk when they send materials through the mailstream. (In contrast, email recipients pay — that’s why it doesn’t matter if a spammer broadcasts 10 messages or a million emails, the cost is about the same.)

This is a site which says that the mailstream is important to the country, that we as a Nation are not so wealthy that we can afford to lose millions of jobs inside our borders and that a reasonable discussion of the mailing system is helped by the availability of factual information and data.

Technorati Tags: Constitution, economics, Founders, government, mail, Mail & Jobs, vision

It’s a fair question and here’s the answer: Imagine that you go to a bicycle shop. You can buy an assembled bicycle for $100 or you can buy the very same bicycle unassembled for $75. In other words, if you do some of the work the store has a lower cost and you pay less.

Postal rates work the same way. You can drop a letter into a corner mailbox with a handwritten address and no ZIP code. The Postal Service must send out a truck to pick up the letter, read the address, and add the ZIP code. Indeed, the Postal Service must send out a truck whether or not there’s any mail in the box.

But the Postal Service can reduce costs if the letter has a machine readable address that can be scanned automatically. The Postal Service can cut expenses if that address is required to have up-to-date delivery information including a special bar code. The Postal Service can save still more time and money if the letters are facing in one direction for easy processing and arranged in ZIP+4 order.

The Postal Service can save again when letters are bundled in specially-coded bags or ordered sequentially in “flats” to speed processing. Lastly, the Postal Service can also save money because it does not need to send a truck to a corner mailbox — to qualify for lower rates mailers must take their mail to a limited number of special postal facilities, not just neighborhood post offices.

Just like the bicycle shop, the Postal Service charges less when users do more of the work.

What would happen to stamp prices if we got rid of advertising mail?

Without advertising mail, stamp prices will soar. Here’s why:

The Postal Service delivers more than 212 billion pieces of mail each year to more than 148 million delivery points. A huge system must be in place to perform this work, a vast network that requires post offices, facilities, vehicles, and more than 765,000 employees.

If postal volume declines, costs will remain largely the same. For instance, if a home gets four pieces of mail instead of five each day, the Postal Service must still maintain its network of offices, facilities, vehicles and people. In other words, the Postal Service has fixed costs which are always in place.

The result is that if postal volume falls, costs must be divided among fewer pieces of mail, so each piece of mail must cost more.

Think of a pizza that sells for $10. If it’s divided into 12 slices, the cost per slice is 83 cents. If we take the same pizza and cut it into 8 splices, the cost is $1.25 per slice. Same pizza, but a higher cost per slice when there are fewer slices. The concept is the same with the mail.

But wait a minute. Isn’t the Postal Service subsidized with tax dollars?

No. The Postal Service has not received an operating subsidy since 1983 — at least 25 years ago. The Postal Service did receive one-time public funding to help with clean-up efforts after the 2001 anthrax attacks, special-purpose funding universally supported in response to acts of terrorism and murder.

How are stamp prices set?

In 1971 the Post Office Department, then a part of the cabinet, was converted into the Postal Service, a governmental agency. At the same time, a new entity, the Postal Rate Commission (PRC), was established. A new process to establish rates was also created, a process which typically required ten months of hearings, testimony and debate before the price of a stamp could be changed.

After reviewing testimony, research and reports from a wide range of sources, the PRC could accept a rate change from the Postal Service, modify it or deny it. The Board of Governors of the United States Postal Service then had the right to accept the PRC decision or to implement a rate increase. And, of course, no matter who decided what, the entire matter could be appealed to a court for further debate.

Over the years it became apparent that the rate-making system set-up in 1971 did not work in the Internet era. While competitors could change pricing overnight or offer a new service at anytime, the Postal Service could not. At the same time, the need for an efficient postal system continued to grow as additional delivery points were added each year and volume increased.

In December 2006, the Postal Accountability and Enhancement Act was passed by the Congress and with a new law the rate system changed radically.

What happened? In basic terms, the system now works like this:

• The Postal Service can now set its own rates, however the new rates cannot exceed the rate of inflation and rates may be not be set for the purpose of earning a profit. Instead, the Postal Service may only charge enough to more-or-less break even.
• The public and the Postal Rate Commission — now called the Postal Regulatory Commission — have 45 days to comment before any proposed rate changes go into effect.
• The PRC has the authority to assure that no class of mail subsidizes another. In other words, the prices of First Class mail cannot be raised so that those who send parcels through the postal system pay less — and vice versa. There are elaborate economic models used to determine the costs for each type of mail.
• The Postal Service can conduct market tests of experimental products, typically for not more than 24 months.

Why go through so much hassle just to change the price of a stamp?

Because the mailstream is a basic pillar of the U.S. economy.

“The Postal Service,” says the Washington Post, “has about 738,000 employees, relies on revenue from operations rather than taxpayer funding and is one of few federal bureaucracies with which most Americans have regular contact. It is at the center of a $900 billion mailing industry, which employs 9 million people in such businesses as direct mail, paper manufacturers and printers.” (See: Postal Services Finances Bleak, March 23, 2004)

Over the years the process of changing the price of stamps has been costly, time-consuming, complex and combative. But by at least one measure the system worked very well: Today the U.S. has the most successful postal system in the world — more than 45 percent of all mail worldwide goes through the U.S. Postal Service.

Resources:

• Landmarks In Postal History
• How Mail Order Changed America’s Shopping Habits
• History of Postcard Rates
• History of First-Class Stamp Rates

Technorati Tags: mail, postal, Postal Regulatory Commission, rate

At the center of America’s new media habits is a basic conflict between time and numbers. As a nation, we work longer and vacation less then most other countries. The result for many of us is less time to read, watch or listen.

But although we have less time for the media, the number of media outlets that compete for our attention is growing.

The three major TV networks that dominated television for the past 40 years must now compete with a fourth network as well as huge numbers of cable channels.

The number of magazine titles has greatly increased in the past decade while total industry circulation has grown slowly.

Major big-city dailies now face strong competition from specialized publications such as shoppers, city magazines, suburban papers, entertainment guides and local real estate advertisers.

Consumers are spending more time online — time that in the past might have been spent with traditional media.

What we’re seeing today is a wholesale shift in media preferences. Major metropolitan dailies are not getting the market penetration that used to make them so strong. The result is that they are less and less effective as advertising platforms. Daily newspaper circulation, as one example, has plummeted. According to the Newspaper Association of America morning and evening circulation in 2006 stood at 52.329 million copies — down from 63.340 million in 1984.

The alternative to broad-based, shotgun promotions is targeting, a strategy often represented by advertising mail marketing.

Why? When you use advertising mail there’s a sense of individual contact. There is also a feeling of immediacy, that here is something of value which should be considered now.

And while radio and TV are powerful mediums, even if you have the world’s best commercial it doesn’t count for much if a listener or viewer is out of the room. And once radio and TV ads are finished, they’re finished forever because few people tape even a tiny portion of the many programs broadcast each week — and some recording systems are programmed to ignore ads.

The need for targeting is largely behind the move to make individual media outlets reach more precisely-defined audiences. As an example, instead of a large daily paper with a single editorial package for every area in a major city, a newspaper may instead publish zoned editions and specialized sections.

In similar fashion, generalized radio programming has given way to stations that feature only one type of fare. Stations that offer top-40 music compete for a different audience then those which offer religious programming or all-talk formats.

Magazines, too, are becoming increasingly specialized as new publications spring up to serve individual market niches. As for television, segmentation is responsible for the growth of all sports, all news and all music cable outlets as well as specialized channels for children, investors and movie watchers.

To make matters more complex, we not only have papers fighting papers and TV channels battling with other TV channels, we also have across-the-board competition.

Consider the dilemma of a company that produces a two-seat sports car. Does it advertise in local newspapers, magazines that cover the auto industry, or does it use advertising mail to reach individuals who currently own sports cars and live in high-income residential neighborhoods?

Advertisers today want to reach specific publics. The availability of consumer and business data, useful software, computers and market segmentation allow advertisers to target their messages with great precision. And when messages are carefully targeted, it becomes possible to obtain higher response rates and lower costs per sale.

Targeting offers other benefits as well.

• First, with careful targeting consumers are likely to receive fewer irrelevant ads. They will increasingly receive only those ads which most closely relate to their buying patterns and demographics.

• Second, in an age of heightened environmental awareness, it’s often wasteful to broadly advertise when targeting can lower costs and yet produce the same number of sales. More efficiency translates into less need for paper, energy and landfill space, benefits that help everyone.

• Third, advertising mail is the most democratic medium of all. You don’t need a $10 million campaign to start an advertising mail program. Individuals, small businesses, charities and growing companies can all find advertising mail programs that fit their budgets.

The new emphasis on targeting can be seen in advertising sales. For example, between fiscal 1997 and 2007, ad mail volume increased from 77.3 billion pieces to 103.5 billion pieces — a huge increase, and one that is especially interesting because it parallels the growth of online communication.

What the future will bring is an open question. Tough economic times in the late 1980s and early 1990s slowed retail, employment and real estate advertising — the traditional mainstays of big-city newspapers. Conversely, as the economy improves newspaper advertising volume should rise.

As for advertising mail, it is increasingly popular both with advertisers and the public. According to Robert Coen, Senior Vice President, Director of Forecasting at Universal McCann, advertisers will spend almost $64 billion on direct mail in 2008. That’s more than advertisers will spend on newspapers and about one out of every five advertising dollars spent for all media.

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Mail spending rose 4.0 percent in 2007 to $60.998 billion, according to Coen, senior vice president, director of forecasting with Universal McCann, one of the largest advertising agencies in the world,

In the December 2007 issue of his “Insider’s Report,” Coen
said that advertisers spent $283.88 billion on all media in 2007, a .07 percent increase over 2006. In effect, mail continues to represent one of every five dollars spent by U.S. advertisers.

Coen said Internet advertising increased 20 percent in 2007 to $10.92 billion — about one-sixth of the dollars spent with the mailstream. Newspapers took in $42.94 billion, down substantially from the $47.71 billion spent in 2006.

For 2008 Coen estimates that total ad spending will grow by 3.7 percent to $294.38 billion. expenditures for ad mail will grow at an even stronger pace. Coen predicts that for 2008 advertisers will spend $63.73 billion advertising through the mailstream, up 4.5 percent over 2007.

The fact is that advertisers will spend more money on direct mail than on promotions through radio, newspapers, magazines, network television, cable TV or the Internet.

“Madison Avenue,” says Business Week, “came of age as a content supplier to mass media and remains much better versed in making 30-second TV spots than in exploiting the interactive intricacies of the Internet. What is more, in the same way that network TV’s dominance of media is eroding, advertising’s dominance of marketing is diminishing. Marketers are increasing their spending on telemarketing, direct mail, e-mail, in-store displays, and other forms of closely targeted, nonmedia spending.” (See: “The Vanishing Mass Market,” July 12, 2004)

For advertisers, there is a use and value for all forms of media. Each media option offers something unique, and in a country with an $11 trillion economy everyone benefits when there are numerous media choices.

But why the interest in mail?

Advertisers today want to reach specific publics. For instance, a local pizza store may want to reach everyone in a given ZIP code while a company that sells ski boots may only want to reach households with a given income level in communities where snow is common six months a years.

The availability of consumer and business data, advanced software, computers and market segmentation allow advertisers to target their messages with great precision. And when messages are carefully targeted, it becomes possible to obtain higher response rates and lower costs per sale. In other words, mail is popular because advertisers get strong returns for each dollar they spend.

Targeting offers other benefits as well.

• With careful targeting consumers are likely to receive fewer irrelevant ads. They will increasingly receive only those ads which most closely relate to their buying patterns and preferences.
• In an age of heightened environmental awareness, targeting can lower material consumption and yet produce the same number of sales.
• Advertising mail is the most democratic medium of all. You don’t need a $10 million campaign to start an advertising mail program. Individuals, small businesses, charities and growing companies can all find advertising mail programs that fit their budgets — and the same is also true for unions, political campaigners, environmental groups, consumer organizations and religious congregations.

Does ad mail targeting work? You bet.

According to the Postal Service consumers read 78 percent of the advertising mail they receive, nearly 10 percent respond to offers, and 21 percent bring coupons and ad mail with them when they shop.

The new emphasis on targeting can be seen in ad mail volume:

For example, between fiscal 1996 and 2007, ad mail volume increased from 71.7 billion pieces to 103.516 billion – a huge gain, especially given the growth of email and online communication in general.

What is the future of ad mail? Given universal delivery six days a week as well as competitive pricing, ad mail offers much potential. After all, how else can you securely reach more than 148 million physical addresses?

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