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Aug. 16 2010 08:02 AM

The financial challenges of posts around the world promise to have a profound impact on mailers, employees, consumers and potentially national budgets. Postal leaders are exploring cost cutting and revenue generating alternatives that will help alleviate these financial pressures.

Some of the questions being asked these days are:
How can I cut my costs to adjust for lower mail volumes?
How can I stimulate volume?
How can I reduce labor hours without disrupting my labor force and quality of service?
How can I close offices without enraging consumers and local elected officials?
What are the legal adjacent spaces where I can gain market entry and compete?

Traditional answers to these questions are steeped in the historical role of postal services. Mail binds a nation together. Mail connects citizens to their government, to each other and to the companies that want to do business with them. Mail provides a trusted, secure, and universal method of communicating confidential information around the corner or across the country. And yet with ubiquitous wired and wireless broadband, less expensive laptops, netbooks and smartphones; email, texting, IMs, Facebook, Twitter, ooVoo and, most recently, the iPad, there are now numerous digital alternatives available to businesses, governments and consumers to exchange information and build relationships.

Trends in History

With this trend in mind, I am reminded of Henry Adams' essay The Dynamo and the Virgin. When Adams visited the Great Exposition in Paris in 1900 he was awestruck by the dawning electric civilization of the twentieth century and the inherent cultural disruption it portended - in contrast to the motive force symbolized by the great medieval cathedrals and centuries of cultural stability in a largely agrarian society.

If Adams were alive today and he was a postal executive, would his essay now be entitled The Mailbox and the iPad? In many regards, postal executives are awestruck by the dawning globally interconnected society of the twenty-first century and the inherent cultural and business disruptions it portends - in contrast to the centuries of stability of the legacy postal business model.

As important as these questions and ponderings of postal executives are, I think the critical assessment framework which comes from Harvard Business School strategist Clayton Christensen. Christensen, who advises companies facing disruptive competitive pressures, focuses on understanding why customers "hire" their product. For postal operators, that means asking what job is the mail being hired to do? Or conversely, why is mail being fired? And who is responsible for the hiring and the firing?

The Importance of the Customer's Customers

Postal executives are focused on their customers: the mailers and primarily business entities that pay for postage and shipping. But what about the customer's customers, the people receiving that letter or package? They are traditionally viewed as a cost of doing business, represented by distribution expenses, labor expenses, fuel, wear and tear, among others. But it is the customer's customers who order the packages. It is the customer's customers that ultimately determine if they want physical mail or digital alternatives. They are ultimately responsible for the hiring and firing.

It is therefore incumbent upon posts, mailers and their technology and services suppliers to work in concert to develop offerings that create more value for the customer's customers as well as the mailers. Fortunately, mailing technology is also advancing to the point that mailers and consumers can increasingly get exactly what they want and need from the mail channel, and therefore will become more likely to "re-hire" mail for future communications.

For the mailer it is obvious - reducing barriers to attract, retain and serve customers while reducing costs. For the consumer, in the face of a jobs crisis, credit crisis, health care crisis and retirement crisis - mail helps them manage their lives.


One good example of the application of mailing technology that benefits mailers and consumers is when a transactional statement is combined with key attributes of a direct mail piece, often called transpromo technologies. What makes transpromo unique is its ability to combine variable content, or data from different sources, into one stream of information on a customer. What makes transpromo most valuable is the combination of a highly trusted document such as a banking statement, credit card statement, tax bill, pension plan or invoice with relevant advice, counsel and offers in the context of that statement on how customers can best manage their wealth, health and lives.

To take the example of healthcare, profitability is linked to a plan member's health and welfare. Insurers are incentivized to change the behavior of their clients for a win-win scenario. Some examples include: for patients to use preventative services through their primary care doctors instead of emergency rooms; to use mail order vs. retail pharmacy; to manage their chronic conditions vs. risking worsened health. A transpromo document with its high openability and read rate is the perfect context for improving profitability while aligning with the member's need for medical guidance and counsel on how to better manage his or her life.

In addition, transpromo technologies have matured to the point where they can lower the barriers between the mailer's marketing, IT, and operations functions to allow customer insight to drive relevant communications, advice, counsel, and offers in these high open rate vehicles. When effectively applied they offer the opportunity for mail to be rehired by both the mailer and the consumer.

The Last Word
In addition to services and technology, mailers also play an important part in today's digital age. As referenced previously, the contrast of the Mailbox and the iPad holds the key. Many posts view themselves as a pipe between mailers and consumers; however, it is not the only framework within which to find solutions.

From a consumer's perspective, the postal service is a trusted aggregator and consolidator of mail. Therein lies the digital opportunity - where mailers, technology and service providers and posts can leverage their assets, capabilities and brands to repurpose the content inside and outside of the envelope. In this way they can replicate the post's role as a trusted consolidator and aggregator of mail in a fixed or mobile digital environment. Within this framework, new opportunities exist for posts to play a very relevant role in helping consumers better manage their lives using both physical and digital channels.

Bernie Gracy is Vice President, Strategy & Business Development, Pitney Bowes Inc. Visit for more information.