The Postal Service made a splash in mid-April with announcements of two new experimental products that are innovative and exciting. Both products suggest the Postal Service is giving serious thought on how to remain relevant in a fast-changing communications market - without abandoning its core strengths.
First, the Postal Service announced a promotional offer of discounts of three percent on any First-Class or Standard Mail letters or flats that include a two-dimensional barcode, often referred to as a Quick Response Code, which consumer smartphones can read. The product integrates direct mail with digital technology, which is an exploding segment of the advertising market. The second offering is a postage-back guarantee to test advertising by mail. In the initial market test, Mail Works Guarantee will have 16 companies try advertising mail, using either First-Class or Standard mail. If the performance of the campaign does not meet a certain metric, the Postal Service will refund the advertiser's money. It's not necessarily a flashy product that ushers the Postal Service into the digital market. It's a product that is right in the Postal Service's wheelhouse. But it illustrates a fresh approach to luring new customers and trying to win over those companies that aren't using advertising mail, for whatever reason. In basic sales jargon, it's called putting your money where your mouth is.
These two new products, along with the simplified addressing offering, Marketing Mail Made Easy (or recently renamed Every Door Direct Mail Retail), suggest the Postal Service is embracing a more creative - and urgent -- approach to new products. The simplified addressing idea had percolated at the Postal Service for years. It was controversial within some parts of the mailing industry as some groups opposed addresses that are not tied to actual lists of names. Some within the mailing industry also worried this simplified approach would energize the "do not mail" movement. But other groups pushed the Postal Service to embrace a simplified addressing product to entice smaller mailers to try mail, and to grab what many see as a lucrative market opportunity.
At a press conference earlier this year, Postmaster General Pat Donahoe touched on his vision for revenue growth. He noted that the Postal Service, which has lost 41 billion pieces of mail over the past four years, doesn't have the luxury of dithering over volume-growth ideas, just because they were once deemed controversial. I heard his message as this: companies that are bleeding red ink and losing big chunks of market share on a flagship product can't sit in meetings and endlessly debate the pluses and minuses of each new offering. They need to get to market quickly. If a product fails, kill it. If it succeeds, figure out how to replicate it. This is what businesses do all the time. In fact, they can't be afraid of failure. Many entrepreneurs will tell you that the biggest rewards come from the biggest risks.
The Postal Service is not known for its risk-taking. In many ways, it has been encouraged not to take risks. For one thing, it was often criticized for trying new ideas or products that wandered outside its core mission. In some cases, the criticisms were warranted. It was playing with monopoly money and launching small products in spaces where the private sector was probably well-established. But in other ways, the criticism is all too familiar, and not necessarily fair. The Postal Service is told to act like a business, but then when it tries to do things that businesses do, like consolidate under-used facilities or close unprofitable retail outlets, it gets rebuked by politicians.
The political climate might be changing, even if the public rhetoric sounds the same. I see recognition from many corners that the Postal Service can't keep limping along in the same way it has been for the past decade. It needs the freedom to manage its costs and right-size its network. But it also needs to show that it is making a real effort to grow the business. Without this balanced equation, congressional leaders are going to be reluctant to loosen the reins.
The Postal Service's market tests this spring are a step in the right direction. The offerings mentioned above, as well as the new flat-rate products and forever postage for Priority Mail, suggest the Postal Service is ready to get creative and competitive. The organization seems serious about testing the boundaries of the Postal Accountability and Enhancement Act in terms of experimental products and market tests. Let's hope these efforts are a harbinger of even bigger things to come.
First, the Postal Service announced a promotional offer of discounts of three percent on any First-Class or Standard Mail letters or flats that include a two-dimensional barcode, often referred to as a Quick Response Code, which consumer smartphones can read. The product integrates direct mail with digital technology, which is an exploding segment of the advertising market. The second offering is a postage-back guarantee to test advertising by mail. In the initial market test, Mail Works Guarantee will have 16 companies try advertising mail, using either First-Class or Standard mail. If the performance of the campaign does not meet a certain metric, the Postal Service will refund the advertiser's money. It's not necessarily a flashy product that ushers the Postal Service into the digital market. It's a product that is right in the Postal Service's wheelhouse. But it illustrates a fresh approach to luring new customers and trying to win over those companies that aren't using advertising mail, for whatever reason. In basic sales jargon, it's called putting your money where your mouth is.
These two new products, along with the simplified addressing offering, Marketing Mail Made Easy (or recently renamed Every Door Direct Mail Retail), suggest the Postal Service is embracing a more creative - and urgent -- approach to new products. The simplified addressing idea had percolated at the Postal Service for years. It was controversial within some parts of the mailing industry as some groups opposed addresses that are not tied to actual lists of names. Some within the mailing industry also worried this simplified approach would energize the "do not mail" movement. But other groups pushed the Postal Service to embrace a simplified addressing product to entice smaller mailers to try mail, and to grab what many see as a lucrative market opportunity.
At a press conference earlier this year, Postmaster General Pat Donahoe touched on his vision for revenue growth. He noted that the Postal Service, which has lost 41 billion pieces of mail over the past four years, doesn't have the luxury of dithering over volume-growth ideas, just because they were once deemed controversial. I heard his message as this: companies that are bleeding red ink and losing big chunks of market share on a flagship product can't sit in meetings and endlessly debate the pluses and minuses of each new offering. They need to get to market quickly. If a product fails, kill it. If it succeeds, figure out how to replicate it. This is what businesses do all the time. In fact, they can't be afraid of failure. Many entrepreneurs will tell you that the biggest rewards come from the biggest risks.
The Postal Service is not known for its risk-taking. In many ways, it has been encouraged not to take risks. For one thing, it was often criticized for trying new ideas or products that wandered outside its core mission. In some cases, the criticisms were warranted. It was playing with monopoly money and launching small products in spaces where the private sector was probably well-established. But in other ways, the criticism is all too familiar, and not necessarily fair. The Postal Service is told to act like a business, but then when it tries to do things that businesses do, like consolidate under-used facilities or close unprofitable retail outlets, it gets rebuked by politicians.
The political climate might be changing, even if the public rhetoric sounds the same. I see recognition from many corners that the Postal Service can't keep limping along in the same way it has been for the past decade. It needs the freedom to manage its costs and right-size its network. But it also needs to show that it is making a real effort to grow the business. Without this balanced equation, congressional leaders are going to be reluctant to loosen the reins.
The Postal Service's market tests this spring are a step in the right direction. The offerings mentioned above, as well as the new flat-rate products and forever postage for Priority Mail, suggest the Postal Service is ready to get creative and competitive. The organization seems serious about testing the boundaries of the Postal Accountability and Enhancement Act in terms of experimental products and market tests. Let's hope these efforts are a harbinger of even bigger things to come.
