Anyone involved in the mailing industry most certainly watched the events of the USPS throughout 2011. They could be viewed in two ways: signifying a year where not much happened to change things, or a year where there was actually some progress.
I tend to take the latter view. Let's look at what we did see happen:
· 2-4-1 -- Everybody Wins
You may already know that on October 11, 2011, the USPS announced that prices for most mailing services would change again on January 22, 2012. Among the changes are letters (one ounce), which will see a one-cent increase to 45 cents, postcards will increase to 32 cents, a three-cent bump, and letters to Canada or Mexico will increase by five cents to 85 cents. However, the most important change for those of us reading this publication had to do with First-Class Mail Presort pieces, weighing between one and two ounces. The second ounce is now free.
One might think that this change for First-Class Mail Presort pieces is just something the USPS decided to do along with the other changes to seek better financial health. But that is not the case. The idea of two ounces for the price of one (I like to refer to it as 2-4-1) was planted long before the decision was announced. This past spring at a Major Mailers Association (MMA) meeting in March, Paul Vogel spoke to those of us in attendance. As the President and Chief Marketing/Sales Officer for the USPS he is responsible for all domestic and international product development, including pricing, placement and promotion. After his talk, one member of MMA approached him with the idea that perhaps the USPS would approve allowing business mailers to mail two ounce pieces at the one ounce rate. Every major mailer at the meeting liked this idea. Mr. Vogel liked it too, and said he would get back to us.
In the meantime, behind the scenes, we did not stay quiet. My company, DATAMATX, along with 30 first class large business mailers who comprise the National Postal Policy Council, many of which are Fortune 100 companies, are always actively lobbying for lower business rates from the USPS. Many of us are also active members of the Coalition for a 21st Century Postal Service that advocates for business mailers. We knew this was one decision that didnâ¬t need a ruling by the Postal Regulatory Commission (PRC) or Congressional approval, as it is not a rate increase or a mandate. This position was confirmed at a National Postal Policy Council (NPPC) meeting held after the Major Mailers⬠meeting when both Bill Baker, legal counsel for the NPPC, and Steve Sharfman, the PRC General Counsel, agreed that this move would not be defined as a rate case. It would also require very little additional capacity to handle two ounces versus one, and certainly no additional labor, given the fact that staff has already been cut significantly to reduce labor cost. All it would take is for the USPS executive management and its board to act. It didnâ¬t happen in October, but still all of our noise paid off.
The best news is that this change gives our customers the ability to fill that envelope with additional promotional messaging and other information that provides value to the mail and helps to grow their businesses, which is why like to call it 2-4-1 -- Everybody Wins.
· A summer of QR Codes
The public's enthusiastic acceptance of Smartphones that link to the Internet certainly did not decrease in 2011 and with that came more ways to allow customers to interact with businesses using these devices. With their growth in popularity, you may have already seen QR codes. They have been popping up in magazine ads, catalogs, brochures, outdoor signage and even on some television broadcasts. QR codes are two-dimensional barcodes that, when scanned by the camera on a Smartphone, connect a user to online content. Recognizing consumer fascination with these barcodes, the USPS team kicked off a QR Code promotion last July. The USPS mobile bar code promotion provided businesses with a three percent discount on Standard Mail and First-Class Mail letters and flats that included a mobile bar code. When consumers scanned the bar codes, they might view exclusive offers, video demos or social networking platforms. It was a limited offer for bulk mail only and most likely an experiment to see if making mail more interactive would encourage more direct marketers to use mail to grow business and help keep mail viable.
I tend to take the latter view. Let's look at what we did see happen:
· 2-4-1 -- Everybody Wins
You may already know that on October 11, 2011, the USPS announced that prices for most mailing services would change again on January 22, 2012. Among the changes are letters (one ounce), which will see a one-cent increase to 45 cents, postcards will increase to 32 cents, a three-cent bump, and letters to Canada or Mexico will increase by five cents to 85 cents. However, the most important change for those of us reading this publication had to do with First-Class Mail Presort pieces, weighing between one and two ounces. The second ounce is now free.
One might think that this change for First-Class Mail Presort pieces is just something the USPS decided to do along with the other changes to seek better financial health. But that is not the case. The idea of two ounces for the price of one (I like to refer to it as 2-4-1) was planted long before the decision was announced. This past spring at a Major Mailers Association (MMA) meeting in March, Paul Vogel spoke to those of us in attendance. As the President and Chief Marketing/Sales Officer for the USPS he is responsible for all domestic and international product development, including pricing, placement and promotion. After his talk, one member of MMA approached him with the idea that perhaps the USPS would approve allowing business mailers to mail two ounce pieces at the one ounce rate. Every major mailer at the meeting liked this idea. Mr. Vogel liked it too, and said he would get back to us.
In the meantime, behind the scenes, we did not stay quiet. My company, DATAMATX, along with 30 first class large business mailers who comprise the National Postal Policy Council, many of which are Fortune 100 companies, are always actively lobbying for lower business rates from the USPS. Many of us are also active members of the Coalition for a 21st Century Postal Service that advocates for business mailers. We knew this was one decision that didnâ¬t need a ruling by the Postal Regulatory Commission (PRC) or Congressional approval, as it is not a rate increase or a mandate. This position was confirmed at a National Postal Policy Council (NPPC) meeting held after the Major Mailers⬠meeting when both Bill Baker, legal counsel for the NPPC, and Steve Sharfman, the PRC General Counsel, agreed that this move would not be defined as a rate case. It would also require very little additional capacity to handle two ounces versus one, and certainly no additional labor, given the fact that staff has already been cut significantly to reduce labor cost. All it would take is for the USPS executive management and its board to act. It didnâ¬t happen in October, but still all of our noise paid off.
The best news is that this change gives our customers the ability to fill that envelope with additional promotional messaging and other information that provides value to the mail and helps to grow their businesses, which is why like to call it 2-4-1 -- Everybody Wins.
· A summer of QR Codes
The public's enthusiastic acceptance of Smartphones that link to the Internet certainly did not decrease in 2011 and with that came more ways to allow customers to interact with businesses using these devices. With their growth in popularity, you may have already seen QR codes. They have been popping up in magazine ads, catalogs, brochures, outdoor signage and even on some television broadcasts. QR codes are two-dimensional barcodes that, when scanned by the camera on a Smartphone, connect a user to online content. Recognizing consumer fascination with these barcodes, the USPS team kicked off a QR Code promotion last July. The USPS mobile bar code promotion provided businesses with a three percent discount on Standard Mail and First-Class Mail letters and flats that included a mobile bar code. When consumers scanned the bar codes, they might view exclusive offers, video demos or social networking platforms. It was a limited offer for bulk mail only and most likely an experiment to see if making mail more interactive would encourage more direct marketers to use mail to grow business and help keep mail viable.
· A move to realign the network
In another move to reduce costs the USPS filed a request this past fall for a non-binding advisory opinion from the PRC regarding plans for network optimization. The consolidation of mail processing facilities accelerated over the past year to bring the Postal Service network in line with a dramatic drop in mail volume. The USPS is now proposing approximately 250 processing facilities be closed. The process for studying these proposed changes is called the Area Mail Processing (AMP) study, and a list of the facilities under study is available on the USPS' web site. Of course, this won't be a popular move in the areas that are being affected. Nobody wants their post office to close, but with 80% of the USPS cost being labor and the excess capacity; it is a step toward solving the financial difficulties the Postal Service faces.
What didn't happen in 2011?
It's a foregone conclusion that the USPS will continue to face financial difficulty in the years ahead, yet there was no real action when it came to eliminating mail delivery on Saturdays even though changing the carriers' work week to five days would save an estimated $3.5 billion. However, an elimination of Saturday delivery would require congress to pass a bill. It may surprise you that in spite of the savings involved there was not even a proposed bill in 2011. My guess is that whether you are a Republican, a Democrat, or simply an American, the general consensus is that no one running for office would want to do anything right now that suggests the elimination of more jobs.
So what might that mean for the future? What it may mean is we may be forced to toss in billions of dollars to save the Postal Service, similar to what happened with General Motors. And who pays for that? Taxpayers. I think it is safe to say that bailing out the USPS is bound to become the next big point of discussion in our country. It would be hard to replace the USPS, now wouldn't it? But, there's no doubt we can no longer count on business as usual. As business owners we know that unpopular business decisions aren't easy. But as hard as they may be, they are often decisions that make more sense than sticking to a business model that no longer works. 2011 is behind us and we made a bit of progress in the mailing community.
In another move to reduce costs the USPS filed a request this past fall for a non-binding advisory opinion from the PRC regarding plans for network optimization. The consolidation of mail processing facilities accelerated over the past year to bring the Postal Service network in line with a dramatic drop in mail volume. The USPS is now proposing approximately 250 processing facilities be closed. The process for studying these proposed changes is called the Area Mail Processing (AMP) study, and a list of the facilities under study is available on the USPS' web site. Of course, this won't be a popular move in the areas that are being affected. Nobody wants their post office to close, but with 80% of the USPS cost being labor and the excess capacity; it is a step toward solving the financial difficulties the Postal Service faces.
What didn't happen in 2011?
It's a foregone conclusion that the USPS will continue to face financial difficulty in the years ahead, yet there was no real action when it came to eliminating mail delivery on Saturdays even though changing the carriers' work week to five days would save an estimated $3.5 billion. However, an elimination of Saturday delivery would require congress to pass a bill. It may surprise you that in spite of the savings involved there was not even a proposed bill in 2011. My guess is that whether you are a Republican, a Democrat, or simply an American, the general consensus is that no one running for office would want to do anything right now that suggests the elimination of more jobs.
So what might that mean for the future? What it may mean is we may be forced to toss in billions of dollars to save the Postal Service, similar to what happened with General Motors. And who pays for that? Taxpayers. I think it is safe to say that bailing out the USPS is bound to become the next big point of discussion in our country. It would be hard to replace the USPS, now wouldn't it? But, there's no doubt we can no longer count on business as usual. As business owners we know that unpopular business decisions aren't easy. But as hard as they may be, they are often decisions that make more sense than sticking to a business model that no longer works. 2011 is behind us and we made a bit of progress in the mailing community.
Now let's keep our focus on 2012. If the consensus is that it makes financial sense to change to five-day delivery, let's keep the pressure on as a continued effort to keep rates from going up and to keep our postal system in tact.
Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation's largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Major Mailers Association (MMA), PCC Advisory Committee (PCCAC), and the Board of the National Postal Policy Council (NPPC). He is also president of The Imaging Network Group (INg), an association for Transactional and Direct Mail Marketing service bureaus. As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers. Harry is a frequent contributor to E-Document News and is author of Harry's Corner. You can contact Harry at hstephens@datamatx.com. Find DATAMATX at http://datamatx.com.
