A storm is gathering on the horizon of the print/mail finishing industry. At a minimum, it has the potential to dramatically accelerate trends that are already in place and impacting many in the industry. At worse, it might reshape the industry virtually overnight.
The storm is called Do Not Mail, and it is an effort by environmentally motivated interests to prohibit or severely restrict the distribution of "unwanted" Standard Class mail. Their goal is to reduce unnecessary waste and its related harmful costs and impact on the environment. Given the state of high oil prices and the growing awareness of global warming, it is a reasonable position by people who have good intentions. The initiative will also produce a slew of unintended consequences, at least as far as the industry is concerned.
The current Do Not Mail effort is based on the Federal Do Not Call legislation that enabled consumers to register their phone numbers and opt out of receiving unwanted telemarketing calls. The Do Not Call effort is widely regarded as successful. No one I know misses those annoying dinnertime telemarketing calls. And if you do like receiving telemarketing calls, you still can. The registry is optional. You don't have to sign up.
Unlike Do Not Call, which is a Federal program, the current Do Not Mail effort is targeted at the state level. Various forms of the potentially restrictive legislation were introduced in 15 states last year. In the
Opponents of the Do Not Mail initiative, which include a broad coalition of industry leaders, are concerned that approval of the measure by a single state will eventually trigger approval at other states and will eventually lead to a Federal ban.
There is some debate as to how the measure would define unwanted junk mail. For example, would it include controlled circulation newspapers and reports from hospitals, schools and other local, civic or non-profit organizations? So it is not entirely clear that the effort is workable. And we don't know how many consumers would sign up if it were available. Still, the threat is real and worrisome.
Regardless of your personal view of junk mail, any decline in the volume of Standard Class mail brings with it a corresponding decline in revenue for the U.S. Postal Service. And because the USPS has large fixed costs, as well as rising costs for fuel and personnel, any drop in revenue from Standard Class mail will have to be made up in cost increases from First-Class mail. It is easy to see how a decline in volume and revenue in Standard Class mail can translate into higher postage rates, which in turn can trigger more declines in volume and revenue. Such a spiral is not a pretty picture.
The drop in mail volume and revenue is already an issue for the USPS. In the first quarter of fiscal year 2008, the USPS reported mail volume was down 3% overall. First-Class mail volume declined 3.9% and Standard Class was down 2.6%. Revenue was higher, thanks to the rate increase in May, but it was lower than projected.
The coalition of industry leaders that is fighting the Do Not Mail initiative is recommending a broad-based lobbying effort aimed at state legislators. (Ironically, the appeal I received from them was delivered via email.) The suggested lobbying message is very reasonable and centers on a few key facts.
First, direct mail is an invaluable business-building tool. It is used by countless businesses both large and small to acquire new customers. Second, direct mail has a far less onerous carbon-footprint (i.e. negative impact on the environment) than other human activities. While it consumes energy in its manufacture and delivery, the finished materials are easily recyclable. And it is near impossible to segregate out the energy cost of delivery since it is combined with First-Class mail. And third, the industry already offers an effective and voluntary opt-out procedure for consumers who do not want to receive direct mail offers.
The bottom line to the lobbying message is clear: a more widespread Do Not Mail registry is unneeded and harmful to business interests. Still, I would add a couple of other points.
Studies show that consumers, if given a choice, actually prefer to receive marketing messages via direct mail rather than the other channels, and for several good reasons. Direct mail arrives at a set time. It is not intrusive. It is easily handled and reviewed. It usually tells the full story, rather than just a tease. It enables recipients to take action, either immediately or at a later time. And it is easily avoided or discarded if it is not pertinent.
Considered another way, direct mail provides consumers with control, an invaluable attribute in a world where consumers are assaulted daily by thousands of random, intrusive and unwanted marketing messages.
A ban on direct mail would also negatively impact smaller, local businesses which are the real engines of job growth to a far greater degree than the giant corporations. Direct mail is far more useful to small and local businesses in reaching potential customers. Large corporations have the resources to reach consumers via other channels, and they could also easily get around a ban by offering additional products or services to existing consumers.
For example, it is much easier for large businesses, such as banks, credit card issuers and insurance companies, to capitalize on newer technologies. One is the growing shift to TransPromo messaging, which is the merging of marketing and transaction- or account-based messaging. The TransPromo technique will be increasingly more valuable as postage costs continue to escalate. Another is the array of electronic delivery options. These include email, SMS, inbound telemarketing and web postings and are increasingly popular as customer messaging channels.
Despite the threat of the Do Not Mail initiatives, and the recent and likely future increases in postage costs, direct mail can remain an effective and cost-efficient way to connect with new customers. But simply making it more difficult for consumers to stop receiving unwanted direct mail by opposing the Do Not Mail initiatives at the state level is not the only course of action.
It is far more effective for the long-term for direct mail marketers to invest in and improve the channel. They can do this by more fully utilizing customer data and the analytics-based software and digital color hardware technologies that are widely available today. These technologies enable far better targeting and tailoring and dramatically enhance the appearance and appeal of messages.
These investments will strengthen individual messages and boost their response while bolstering the channel as well, making both the individual messages and the entire channel more valuable to recipients and senders alike.
George Linkletter is a marketing and public relations consultant specializing in customer messaging. You can reach him at georgelinkletter@charter.net.
