Editor's Note: In this article, Todd Butler presents two different views of the Every Door Direct Mail program. Which one do you side with?
Point:
I find myself (for this article) in the rare position of defending the Postal Service's most recent marketing initiative, Every Door Direct Mail (EDDM). I am not sure why, but nearly everyone in the Mail Service Provider (MSP) community feels threatened by this initiative. Their concerns seem to border on hysteria over a few, minor rule changes. I cannot comprehend the outrage over the limited extension of using a simplified address for all saturation flat mail. Butler Mailing Services has provided saturation mail for many of our customers since our first mailing in 1983. Sometimes we use simplified addressing and sometimes we purchase a saturation list. Frankly, not buying a list (simplified addressing) increases the amount of preparation work and does not save the customer money.
Many MSPs have commented that EDDM will dilute the value of mail because of the perception that unaddressed mail does not have any value. The truth of the matter is that no recipient of mail looks for and evaluates the printed address before they decide whether they are going to open an envelope or self-mailer, leaf through a catalogue, or clip a coupon for a pizza! Addressing a mail piece has huge advantages in that it allows for targeting direct mail to specific households and people. Research shows that personalization of targeted direct mail increases response rates, but give me a break, when it comes to grocery add utilization, addressing and personalization do not increase redemption rates!
The other change brought about by EDDM, the elimination of permit fees, is positive but of little value. Most saturation mail customers do not currently pay for mailing permits. They use our permit and we consider the fee a minor cost of doing business. My belief is that the USPS and postal employees are going to learn a great deal from the design and implementation of the EDDM program. Discovering that a fee of $370 ($185 for the permit, $185 for the annual fee) negatively impacts potential customers is a big step forward for the USPS. Apparently some postal employees finally realize that high costs affect mail volume. This is a significant, positive development for our industry. Who knows, maybe by next year postal employees will realize it is not MSPs pricing customers out of the mailstream!
After reading many responses on MFSA's (a mailing industry association) listserv, I think the terror many are expressing is due to three primary issues. The first is a concern that postal marketing efforts and the promotion of simplified addressing will cause many of our existing customers to decide that they do not need trained professionals to prepare their mail. The second is a concern that postal sales people will disrupt our existing customer relationships while promoting EDDM. The third concern, from a very small group of possibly paranoid MSPs, is that the USPS will use the EDDM program to move into mail processing and compete directly with its most loyal supporters. In a companion article, "Every Door Direct Mail: You're not paranoid" I provide proof that the last two concerns are not unfounded.
As for the greatest fear of MSPs, that our customers don't need us anymore, I contend that MSPs underestimate the value they provide to their customers. The first big job Butler Mailing Services had was mailing 10,000 pieces to a saturation list. The multipage, quarter fold, newsprint advertisement filled our garage and came to us with the permit and address panel folded to the inside. We had to print and apply labels (by hand), count, bundle, sort, and bag this mailing after the pieces had been refolded by the printer. It was a mess and a lot of hard work. The reason the EDDM program is not going to be a huge success is that preparing a 5,000 piece, simplified address mailing IS STILL A LOT OF WORK and needs to be processed by trained professionals!
My customers hire me to deal with postal rules and regulations, confusing preparation requirements, paper work requirements, mail piece printing errors, design issues, acceptance issues, and uncooperative postal employees. EDDM does nothing to eliminate these issues, hassles, or problems.
Nor does it reduce the high cost of postage!
Many MSPs have commented that EDDM will dilute the value of mail because of the perception that unaddressed mail does not have any value. The truth of the matter is that no recipient of mail looks for and evaluates the printed address before they decide whether they are going to open an envelope or self-mailer, leaf through a catalogue, or clip a coupon for a pizza! Addressing a mail piece has huge advantages in that it allows for targeting direct mail to specific households and people. Research shows that personalization of targeted direct mail increases response rates, but give me a break, when it comes to grocery add utilization, addressing and personalization do not increase redemption rates!
The other change brought about by EDDM, the elimination of permit fees, is positive but of little value. Most saturation mail customers do not currently pay for mailing permits. They use our permit and we consider the fee a minor cost of doing business. My belief is that the USPS and postal employees are going to learn a great deal from the design and implementation of the EDDM program. Discovering that a fee of $370 ($185 for the permit, $185 for the annual fee) negatively impacts potential customers is a big step forward for the USPS. Apparently some postal employees finally realize that high costs affect mail volume. This is a significant, positive development for our industry. Who knows, maybe by next year postal employees will realize it is not MSPs pricing customers out of the mailstream!
After reading many responses on MFSA's (a mailing industry association) listserv, I think the terror many are expressing is due to three primary issues. The first is a concern that postal marketing efforts and the promotion of simplified addressing will cause many of our existing customers to decide that they do not need trained professionals to prepare their mail. The second is a concern that postal sales people will disrupt our existing customer relationships while promoting EDDM. The third concern, from a very small group of possibly paranoid MSPs, is that the USPS will use the EDDM program to move into mail processing and compete directly with its most loyal supporters. In a companion article, "Every Door Direct Mail: You're not paranoid" I provide proof that the last two concerns are not unfounded.
As for the greatest fear of MSPs, that our customers don't need us anymore, I contend that MSPs underestimate the value they provide to their customers. The first big job Butler Mailing Services had was mailing 10,000 pieces to a saturation list. The multipage, quarter fold, newsprint advertisement filled our garage and came to us with the permit and address panel folded to the inside. We had to print and apply labels (by hand), count, bundle, sort, and bag this mailing after the pieces had been refolded by the printer. It was a mess and a lot of hard work. The reason the EDDM program is not going to be a huge success is that preparing a 5,000 piece, simplified address mailing IS STILL A LOT OF WORK and needs to be processed by trained professionals!
My customers hire me to deal with postal rules and regulations, confusing preparation requirements, paper work requirements, mail piece printing errors, design issues, acceptance issues, and uncooperative postal employees. EDDM does nothing to eliminate these issues, hassles, or problems.
Nor does it reduce the high cost of postage!
Counterpoint:
As the EDDM program has been rolled out, much has been said about the marketing needs of the pizzeria down the street. The reason I do not mail for the local pizza establishment and other small and medium sized businesses is that they can no longer afford the cost of printing and postage!
I don't need bureaucrats in Washington and their high powered consultants to tell me that small and medium sized businesses (SMBs) are a large untapped market. What they don't understand is that SMBs were a significant part of my business until high postage costs drove these customers out of the mail stream and on-line. Permit fees, list costs, and my preparation fees are not an impediment to increasing mail volumes. The USPS, with its high costs and poor service, are the reason the industry lost small and medium sized businesses to on-line advertising and why significant mail volumes generated by the SMB market will not return.
So what happens when EDDM is not the success it is projected to be? I believe there will be a push by postal managers to morph EDDM into an old, discarded program called Neighborhood Mail. Neighborhood Mail was a program the USPS tried to implement in 1995. The idea was to generate more saturation mail by breaking down the barriers to utilizing the mailstream for neighborhood businesses. The barriers to be eliminated were list companies and mail service providers. Sound familiar? Bad ideas are not discarded by the Postal Service, they're renamed.
The Neighborhood Mail program was designed so local businesses could have their printing shipped in bulk directly to the local Post Office. The local business would provide a list of carrier routes they wanted to mail to and paid their postage fees. Postal carriers for the routes on the "mailing list" would go to the skid of printing, count out the pieces they needed for their route, and deliver this "mail". The direct mail industry went ballistic. The USPS shelved Neighborhood Mail before implementation. Unfortunately, I believe that an unsuccessful EDDM program will morph into the old Neighborhood Mail program. And Neighborhood Mail is a significant threat to mail service providers!
I recently received a notice from MFSA (an industry association) that the USPS wants our help in spreading the word about EDDM. With the tone of the discussions on the MFSA listserv, I am afraid any cooperation from our segment of the industry in support of EDDM will be limited. MSPs are concerned about their businesses and unhappy with the negative affects the USPS has had on our bottom line. Over the last six years, as our mail volumes declined significantly, the Postal Service demanded mail preparation changes resulting in higher processing and equipment costs. During the same six years, the USPS repeatedly and forcefully told our customers that they must either comply with significant mail piece design changes and higher postage costs or leave the mail stream. Many of our customers complied taking their marketing dollars on-line.
Now, a new Postmaster General wants MSPs to partner with him to promote a program that makes it easier for businesses to bypass our services and prepare their own mailings. The stated goal of the EDDM program is to go after SMBs that are not using the mail stream. But where have postal marketing and sales teams gone to find these "NEW" customers? To their local BMEU's where they gather contact information (provided by MSPs) of our existing customers.
Every time there is a big postal marketing push, postal sales people rush to BMEU's to collect proprietary mail owner information (identified as a Ghost Number) that was provided in confidence by MSPs. Also available to postal sales people is the type of mail utilized, quantities mailed, frequency, and postage amounts paid by these Ghost Number accounts. For many MSPs, this privileged information is not allowed to be shared with anyone and is covered by confidentiality agreements. And yet the USPS takes this proprietary information and is able to share it with the world!
Everyone in the mailing industry assumes that Ghost Number information about our customers is required. In fact, providing mail owner data is not required! Ghost Numbers are not mentioned in the DMM and providing this information is not required within its pages. There is no place on a 3602 for a "Ghost Number" and the postal wizard doesn't require it. In a 2006 OIG Report (MS-MA-06-002) sent to Susan M. Plonkey, VP Customer Service and currently VP of Sales, under the "Managements Comments" section on page 4, the report states that the "mail owner" information is not required.
The report goes on to say that if mail owner information is provided, the USPS can use it any way they want. What the USPS has done since beginning its systematic collection of proprietary information is to use deception to get MSPs to provide their customer data. Our industry has been lead to believe that this information is required, while upper management and the OIG agree that it is not. I have been told that the USPS has no legal reason to gather this MSP proprietary information, which is why providing it is not a requirement.
If you think things have changed since 2006, the most recent redesign of the 3602 (the 4/17/2011 version) still does not have a required field that provides for mail owner information! Therefore management's statement (in the OIG report) that "acceptance clerks [are] to assume the mailing is that of the permit holder if the postage statement does not give the mail owner's name" is still postal policy. The only reason the USPS gathers customer information from MSPs is so they can use it for POSTAL MARKETING. This charade performed by postal management over proprietary customer information is unethical and immoral!
In numerous speeches the Postmaster General has told us that he wants to build greater trust, better communications and a better relationship with the mailing industry. The PMG wants to partner with the mailing industry in promoting his newest program, EDDM. Funny how the only time the USPS is sincere when talking about "partnerships" is when they want support from the MSP community. Not that I'm bitter, but as a MSP treated like the three legged dog of an ugly step child for more than ten years, I have two conditions the current PMG must meet before I drink the "partnership" cool aid again.
Condition number one: The Postmaster General must guarantee that the USPS will not change the current parameters of the EDDM program so they resemble those of the Neighborhood Mail program. More to the point, he must assure MSPs that the postal service will not move into mail processing and compete directly with our segment of the mailing industry! He is either a partner or a competitor; it is time to openly declare which one!
Condition number two: The Postmaster General must build an impenetrable firewall between proprietary customer data provided by MSPs and the rest of his postal organization! This includes past, present, and future proprietary information.
Over the last ten years the Postal Service jumped the rails of ethical behavior in its relationship with MSPs. Getting the ethical train back on track would be a good way to help reset the partnership between the USPS, the Postmaster General, and his mailing services provider community.
The only way the Postal Service can grow mail volume is if we do it together!
Todd Butler
Butler Mailing Services
eKEY® Technologies
513-870-5060
toddb@butlermail.com
www.ekeymailer.com
I don't need bureaucrats in Washington and their high powered consultants to tell me that small and medium sized businesses (SMBs) are a large untapped market. What they don't understand is that SMBs were a significant part of my business until high postage costs drove these customers out of the mail stream and on-line. Permit fees, list costs, and my preparation fees are not an impediment to increasing mail volumes. The USPS, with its high costs and poor service, are the reason the industry lost small and medium sized businesses to on-line advertising and why significant mail volumes generated by the SMB market will not return.
So what happens when EDDM is not the success it is projected to be? I believe there will be a push by postal managers to morph EDDM into an old, discarded program called Neighborhood Mail. Neighborhood Mail was a program the USPS tried to implement in 1995. The idea was to generate more saturation mail by breaking down the barriers to utilizing the mailstream for neighborhood businesses. The barriers to be eliminated were list companies and mail service providers. Sound familiar? Bad ideas are not discarded by the Postal Service, they're renamed.
The Neighborhood Mail program was designed so local businesses could have their printing shipped in bulk directly to the local Post Office. The local business would provide a list of carrier routes they wanted to mail to and paid their postage fees. Postal carriers for the routes on the "mailing list" would go to the skid of printing, count out the pieces they needed for their route, and deliver this "mail". The direct mail industry went ballistic. The USPS shelved Neighborhood Mail before implementation. Unfortunately, I believe that an unsuccessful EDDM program will morph into the old Neighborhood Mail program. And Neighborhood Mail is a significant threat to mail service providers!
I recently received a notice from MFSA (an industry association) that the USPS wants our help in spreading the word about EDDM. With the tone of the discussions on the MFSA listserv, I am afraid any cooperation from our segment of the industry in support of EDDM will be limited. MSPs are concerned about their businesses and unhappy with the negative affects the USPS has had on our bottom line. Over the last six years, as our mail volumes declined significantly, the Postal Service demanded mail preparation changes resulting in higher processing and equipment costs. During the same six years, the USPS repeatedly and forcefully told our customers that they must either comply with significant mail piece design changes and higher postage costs or leave the mail stream. Many of our customers complied taking their marketing dollars on-line.
Now, a new Postmaster General wants MSPs to partner with him to promote a program that makes it easier for businesses to bypass our services and prepare their own mailings. The stated goal of the EDDM program is to go after SMBs that are not using the mail stream. But where have postal marketing and sales teams gone to find these "NEW" customers? To their local BMEU's where they gather contact information (provided by MSPs) of our existing customers.
Every time there is a big postal marketing push, postal sales people rush to BMEU's to collect proprietary mail owner information (identified as a Ghost Number) that was provided in confidence by MSPs. Also available to postal sales people is the type of mail utilized, quantities mailed, frequency, and postage amounts paid by these Ghost Number accounts. For many MSPs, this privileged information is not allowed to be shared with anyone and is covered by confidentiality agreements. And yet the USPS takes this proprietary information and is able to share it with the world!
Everyone in the mailing industry assumes that Ghost Number information about our customers is required. In fact, providing mail owner data is not required! Ghost Numbers are not mentioned in the DMM and providing this information is not required within its pages. There is no place on a 3602 for a "Ghost Number" and the postal wizard doesn't require it. In a 2006 OIG Report (MS-MA-06-002) sent to Susan M. Plonkey, VP Customer Service and currently VP of Sales, under the "Managements Comments" section on page 4, the report states that the "mail owner" information is not required.
The report goes on to say that if mail owner information is provided, the USPS can use it any way they want. What the USPS has done since beginning its systematic collection of proprietary information is to use deception to get MSPs to provide their customer data. Our industry has been lead to believe that this information is required, while upper management and the OIG agree that it is not. I have been told that the USPS has no legal reason to gather this MSP proprietary information, which is why providing it is not a requirement.
If you think things have changed since 2006, the most recent redesign of the 3602 (the 4/17/2011 version) still does not have a required field that provides for mail owner information! Therefore management's statement (in the OIG report) that "acceptance clerks [are] to assume the mailing is that of the permit holder if the postage statement does not give the mail owner's name" is still postal policy. The only reason the USPS gathers customer information from MSPs is so they can use it for POSTAL MARKETING. This charade performed by postal management over proprietary customer information is unethical and immoral!
In numerous speeches the Postmaster General has told us that he wants to build greater trust, better communications and a better relationship with the mailing industry. The PMG wants to partner with the mailing industry in promoting his newest program, EDDM. Funny how the only time the USPS is sincere when talking about "partnerships" is when they want support from the MSP community. Not that I'm bitter, but as a MSP treated like the three legged dog of an ugly step child for more than ten years, I have two conditions the current PMG must meet before I drink the "partnership" cool aid again.
Condition number one: The Postmaster General must guarantee that the USPS will not change the current parameters of the EDDM program so they resemble those of the Neighborhood Mail program. More to the point, he must assure MSPs that the postal service will not move into mail processing and compete directly with our segment of the mailing industry! He is either a partner or a competitor; it is time to openly declare which one!
Condition number two: The Postmaster General must build an impenetrable firewall between proprietary customer data provided by MSPs and the rest of his postal organization! This includes past, present, and future proprietary information.
Over the last ten years the Postal Service jumped the rails of ethical behavior in its relationship with MSPs. Getting the ethical train back on track would be a good way to help reset the partnership between the USPS, the Postmaster General, and his mailing services provider community.
The only way the Postal Service can grow mail volume is if we do it together!
Todd Butler
Butler Mailing Services
eKEY® Technologies
513-870-5060
toddb@butlermail.com
www.ekeymailer.com
