One month does not a fiscal year make, but the early Postal Service FY 2010 financial results show some encouraging signs. We're not suggesting that things are fine, or anything close to fine, but the FY 2009 financial freefall could be moderating.

The Postal Service recently disclosed its preliminary financial information for November 2009, the second month of FY 2010. These numbers show that total operating revenue was $5.6 billion, which was 4.4% more than plan and one percent more than the same period last year. At the same time, total operating expenses were $5.8 billion, right at plan, and 3.4% less than the same period last year.

This resulted in a net income loss of $255 million for the month, but the plan had been to lose $493 million and the loss was $507 million for the same period last year. For the first two months of the fiscal year, October and November, the total loss was $476 or about $400 million less than plan.

Total mail volume was about 14.5 billion pieces, compared to the plan of 16.5 billion pieces and the same period last year of 15.1 billion. This equates to a total mail volume decline of four percent compared to the same period last year. However, total work hours were 0.6% under plan and 7.9% less than the same period last year.

Whether this is the beginning of a slightly improved trend is yet to be determined, but it does offer some hope that the worst could be behind us.

Marketing Mail Cuts Backfire on Businesses
It may seem like the prudent business decision to cut marketing mail costs in these challenging economic times, but companies are learning that it can have a disastrous effect on the bottom line. An article in the Wall Street Journal entitled "Firms Hold Fast to Snail Mail Marketing" explains that "some entrepreneurs who were quick to write off direct mail as too pricey or passé are finding it's not so easy to dismiss."

The article points to a small New York company that sells city diaries, albums and planners in the corporate gift market. Deciding to eliminate a $20,000 cost for personally signed letters to prospective customers, the company saw a 25% drop in early orders compared with the same period last year. The president of the company said, "We realized we had made a huge mistake."

The article explains that the "affordability of e-marketing, along with the explosion of social media and the desire to trim costs in the recession, has prompted many small companies like Per Annum to slash traditional direct-mail budgets. US consumers received about 5.2 billion pieces of direct mail in the third quarter of 2009, a 27% decline compared with 7.1 billion in the same period a year earlier, according to Mintel Comperemedia, a research firm that tracks direct-mail marketing."âââ

Another example of the continued power of the mail involved a wholesale insurance broker that stopped his small firm's humorous postcard mailings last year. Sending about 2,000 current and potential clients a postcard every four to six weeks cost the company $4,000. But after stopping the mailings, customers complained about not receiving them. "We would visit some clients and notice they were hanging the postcards on the wall, collecting them," according the firm's founder. The founder further said that he secured $270,000 from a new client that chose to do business with the firm after receiving the postcards.

Marketing mail remains a powerful medium, despite the emergence of e-marketing. The lower cost of e-marketing makes it appealing, but the results generally don't compare with a well-designed and implemented mail campaign.

Tony Conway is the Executive Director of the Alliance of Nonprofit Mailers (