On the Tuesday before Thanksgiving the Postal Service held an invitation only webinar to introduce to the industry their proposals for changes in design requirements for folded self-mailers. These changes were the result of more than two years of studying the data generated from testing customer supplied mail pieces. It shouldn't be a shock to those in the direct mail industry that these proposals are as draconian as the changes implemented in 2007 that destroyed flat mail volumes and are as repressive as the booklet redesign of 2009.
The release of the folded self-mailer proposals, less than a week after the recent MTAC meeting, demonstrates how cowardly postal management is when it comes to interacting with customers and having a face to face dialog with even this elite group. It's much safer for senior management to hide behind middle managers, allowing them to introduce rule changes that will negatively impact and change our industry forever through on-line webinars.
Postal management didn't have a clue as to how many pieces of mail would be affected by the recent redesign of booklets. Since letters are all grouped together with no breakout for booklets or folded self-mailers, management was left working in the dark when calculating the affect of these design changes on total letter volume. At the time the operations group (and senior management) really didn't care what the affect on mail volume or revenue would be since their mission and only concern was to fix booklets at any cost! They are now taking the same approach with folded self-mailers.
There is data on the affect of changes, demanded by the operations group, for the redesign of what used to be the over 50 billion piece flat mail stream. According to the Postal Service there has been a 32% reduction in flat volume since 2005. Flat volumes in 2005 and 2006 were nearly identical, with 53.9 B and 53.8 B pieces respectively. 2007 brought the implementation of the reengineered flat mail stream. Flat volumes dropped 1.4 B pieces immediately and continue to drop as customers react negatively to the massive redesign changes. Current flat volume is 36.8 billion pieces. With successes like this, by the time all of the FSS units are up and running there won't be any flats left to process.
With the loss of mail volume being the number one problem for the Postal Service, senior management is still oblivious to the affects of their decisions! In most organizations a 32% loss in volume of one product, after imposing major design changes, would cause a pause and reevaluation. It would also cause the middle managers that pushed for the changes to lose their job! Instead they've been directed to destroy ah, reengineer letter volumes.
The irrefutable fact is that after significant increases in postage rates and the massive redesign of the automated flat mailstream, flat mail still only covers 86% of its costs. In other words, senior management traded 32% of their flat volume, 17 billion pieces, for zero percent improvement in their bottom line! In fact, the 32% decline in flat volumes coincides with the significant deterioration in overall postal finances and has certainly been a contributing factor in that decline.
After their stunning success with flats, the operations people moved on to booklets creating chaos and carnage and are now trying to destroy folded self-mailers as a viable direct marketing tool. During the booklet redesign process, we were told that booklets made up 10% of the letter mail stream. We are now told that folded self-mailers make up 30% of the letter mail stream. These numbers are guesses, as postal management prefers working in the dark rather than with hard facts when it comes to making major policy changes. When the folded self-mailer proposals are fully implemented, the bureaucrats from operations will have reengineered 40% of the letter mail stream to their liking. Up next are cards and envelope mail with more restrictions on booklets and folded self-mailers.
You would think there are sound financial reasons for making such draconian changes to the letter mail stream. Survival of the Postal Service must be at stake. But according to the Annual Compliance Report filed with the PRC, First Class letters provide a revenue stream that is nearly three times what it costs to process and deliver. Standard Mail letters generate nearly twice what it costs for their processing and delivery. The reality is that letters are the most profitable mail the USPS carries.
So what's the most likely scenario? Changes in folded self-mailer designs will significantly increase processing efficiencies, delivering a corresponding increase in revenue? Or will enactment of these proposals have the same affect on the letter mail stream that the 2007 changes had on the flat mail stream? The Postal Service can not survive a 32% reduction in letter mail volumes and the revenue these pieces generate. With letters providing over 75% of (total) postal revenues some genius at headquarters, working in the dark, is playing with matches while standing knee deep in gasoline.
If the direct mail industry doesn't put a stop to the reengineering of the mail stream, Potter's ten year plan of reducing mail volume to 150 billion pieces will only take five years to accomplish. Total mail volume peaked at 213 billion pieces in 2007; ten years after this redesign we could achieve Potter's projected worst case scenario of 100 billion pieces. Is there any doubt that bureaucratic bungling is instrumental in the loss of mail volume and revenues past, present, and future?
There are two approaches to dealing with the folded self-mailer proposals. One is to do what our industry has always done and patiently follow the USPS lead, quietly voice our concerns, and accept the predetermined outcomes. With this approach we must always avoid offending anyone. We should never openly challenge postal employees or our industry's leadership; they know best. Softly bleating like sheep is the way we have done things for years, as postal pricing, policies, and procedures have driven our customers out of the mail stream and to our on-line competitors.
The second approach is to challenge the postal bureaucrats and their monopoly. It's confrontational, openly expressing our displeasure with their policies and procedures that adversely impact our businesses. It's demanding reasonable timelines, at the beginning of the process, so we can explain the idiocies of their proposals before anyone important has taken full ownership of this stupidity. Since management won't conduct a true dialog with customers, anytime they ask for our input we need to flood their servers with information as to the negative affects their proposals will have on our businesses and customers. If they don't ask for our input, we should provide it anyway! They have ignored us in the past; our responses to these proposals must be so overwhelming that they can not ignore us.
So we have two options, follow the shepherds of our industry down the same paths they have always lead us to be sheared, or become wolves. Can we really do worse than we did with flats or booklet redesign by taking a more aggressive path? What will the postal bureaucracy do if we make them mad; enact stringent policies that make mail production more complex, confusing, and costly? Will postal management, rebuffed by customers, tell acceptance units to be more unreasonable in their application of DMM rules, more difficult and unpleasant to work with, or to be even more inept? Of course management in retaliation may restrict postal hours of operation, making it more difficult to give them money, or even ask congress to allow policy changes that will delay mail delivery even more.
If our industry isn't willing to aggressively fight back after all of the changes the postal bureaucracy has inflicted on us the last five years we will cease to exist, and deservedly so!
Todd Butler, Butler Mailing Services, eKEY® Technologies can be contacted at 513-870-5060, toddb@butlermail.com or
www.ekeymailer.com.
The release of the folded self-mailer proposals, less than a week after the recent MTAC meeting, demonstrates how cowardly postal management is when it comes to interacting with customers and having a face to face dialog with even this elite group. It's much safer for senior management to hide behind middle managers, allowing them to introduce rule changes that will negatively impact and change our industry forever through on-line webinars.
Postal management didn't have a clue as to how many pieces of mail would be affected by the recent redesign of booklets. Since letters are all grouped together with no breakout for booklets or folded self-mailers, management was left working in the dark when calculating the affect of these design changes on total letter volume. At the time the operations group (and senior management) really didn't care what the affect on mail volume or revenue would be since their mission and only concern was to fix booklets at any cost! They are now taking the same approach with folded self-mailers.
There is data on the affect of changes, demanded by the operations group, for the redesign of what used to be the over 50 billion piece flat mail stream. According to the Postal Service there has been a 32% reduction in flat volume since 2005. Flat volumes in 2005 and 2006 were nearly identical, with 53.9 B and 53.8 B pieces respectively. 2007 brought the implementation of the reengineered flat mail stream. Flat volumes dropped 1.4 B pieces immediately and continue to drop as customers react negatively to the massive redesign changes. Current flat volume is 36.8 billion pieces. With successes like this, by the time all of the FSS units are up and running there won't be any flats left to process.
With the loss of mail volume being the number one problem for the Postal Service, senior management is still oblivious to the affects of their decisions! In most organizations a 32% loss in volume of one product, after imposing major design changes, would cause a pause and reevaluation. It would also cause the middle managers that pushed for the changes to lose their job! Instead they've been directed to destroy ah, reengineer letter volumes.
The irrefutable fact is that after significant increases in postage rates and the massive redesign of the automated flat mailstream, flat mail still only covers 86% of its costs. In other words, senior management traded 32% of their flat volume, 17 billion pieces, for zero percent improvement in their bottom line! In fact, the 32% decline in flat volumes coincides with the significant deterioration in overall postal finances and has certainly been a contributing factor in that decline.
After their stunning success with flats, the operations people moved on to booklets creating chaos and carnage and are now trying to destroy folded self-mailers as a viable direct marketing tool. During the booklet redesign process, we were told that booklets made up 10% of the letter mail stream. We are now told that folded self-mailers make up 30% of the letter mail stream. These numbers are guesses, as postal management prefers working in the dark rather than with hard facts when it comes to making major policy changes. When the folded self-mailer proposals are fully implemented, the bureaucrats from operations will have reengineered 40% of the letter mail stream to their liking. Up next are cards and envelope mail with more restrictions on booklets and folded self-mailers.
You would think there are sound financial reasons for making such draconian changes to the letter mail stream. Survival of the Postal Service must be at stake. But according to the Annual Compliance Report filed with the PRC, First Class letters provide a revenue stream that is nearly three times what it costs to process and deliver. Standard Mail letters generate nearly twice what it costs for their processing and delivery. The reality is that letters are the most profitable mail the USPS carries.
So what's the most likely scenario? Changes in folded self-mailer designs will significantly increase processing efficiencies, delivering a corresponding increase in revenue? Or will enactment of these proposals have the same affect on the letter mail stream that the 2007 changes had on the flat mail stream? The Postal Service can not survive a 32% reduction in letter mail volumes and the revenue these pieces generate. With letters providing over 75% of (total) postal revenues some genius at headquarters, working in the dark, is playing with matches while standing knee deep in gasoline.
If the direct mail industry doesn't put a stop to the reengineering of the mail stream, Potter's ten year plan of reducing mail volume to 150 billion pieces will only take five years to accomplish. Total mail volume peaked at 213 billion pieces in 2007; ten years after this redesign we could achieve Potter's projected worst case scenario of 100 billion pieces. Is there any doubt that bureaucratic bungling is instrumental in the loss of mail volume and revenues past, present, and future?
There are two approaches to dealing with the folded self-mailer proposals. One is to do what our industry has always done and patiently follow the USPS lead, quietly voice our concerns, and accept the predetermined outcomes. With this approach we must always avoid offending anyone. We should never openly challenge postal employees or our industry's leadership; they know best. Softly bleating like sheep is the way we have done things for years, as postal pricing, policies, and procedures have driven our customers out of the mail stream and to our on-line competitors.
The second approach is to challenge the postal bureaucrats and their monopoly. It's confrontational, openly expressing our displeasure with their policies and procedures that adversely impact our businesses. It's demanding reasonable timelines, at the beginning of the process, so we can explain the idiocies of their proposals before anyone important has taken full ownership of this stupidity. Since management won't conduct a true dialog with customers, anytime they ask for our input we need to flood their servers with information as to the negative affects their proposals will have on our businesses and customers. If they don't ask for our input, we should provide it anyway! They have ignored us in the past; our responses to these proposals must be so overwhelming that they can not ignore us.
So we have two options, follow the shepherds of our industry down the same paths they have always lead us to be sheared, or become wolves. Can we really do worse than we did with flats or booklet redesign by taking a more aggressive path? What will the postal bureaucracy do if we make them mad; enact stringent policies that make mail production more complex, confusing, and costly? Will postal management, rebuffed by customers, tell acceptance units to be more unreasonable in their application of DMM rules, more difficult and unpleasant to work with, or to be even more inept? Of course management in retaliation may restrict postal hours of operation, making it more difficult to give them money, or even ask congress to allow policy changes that will delay mail delivery even more.
If our industry isn't willing to aggressively fight back after all of the changes the postal bureaucracy has inflicted on us the last five years we will cease to exist, and deservedly so!
Todd Butler, Butler Mailing Services, eKEY® Technologies can be contacted at 513-870-5060, toddb@butlermail.com or
www.ekeymailer.com.
