In June of 2003, Jack Potter, the past Postmaster General, hired Jerry Whalen as his new VP of sales. Together, the two decided to unilaterally break the partnership between the United States Postal Service and their best, most valuable customers: mail service providers. Mail Service Providers (MSPs) are companies that invest their own money, time, and resources into selling postal delivery services to end user customers (rate payers). For the substantial sales, marketing, and technical support provided by MSPs, the USPS paid (and continues to pay) NOTHING!
During Mr. Whalen's tenure, the USPS eliminated postal support from most MSPs and concentrated his resources on trying to sell postal services directly to rate payers. Three significant problems soon arose with the grand plan from a copier salesperson (Whalen) and the PMG. The number one problem was that postal sales people couldn't find end user customers, new or old. To assist in their sales efforts, postal management instituted a policy requiring MSPs to provide contact information for their customers. This information and information from subsequent postal requirements continue to provide easy access to confidential information about MSP customers.
The second significant problem was that with big company experience, the new sales guru directed his sales teams to only call on big customers. As small and medium sized business customers slipped away to the Internet, sales teams chased only the biggest customers. For a while it appeared the goal of not dealing with smaller and less sophisticated postal customers would pay off, until the bottom fell out of mail volume starting in 2007.
The fallacy of only wanting to deal with large customers was self-evident, as the USPS watched the retraction of the financial services industry devastate mail volume and send postal finances in to a death spiral. In 2010 the USPS rediscovered that the small and medium sized business market, which they had ignored since 2000, represented a huge potential for the Postal Service. It is a shame they didn't nurture that market, when they owned that market!
The third problem, as expressed by postal sales people, was that they were able to get people interested in direct mail but were unable to close the deal. The USPS (then and now) was not allowed to provide mail preparation services. Potter and Whalen never developed a coherent marketing/sales plan that included taking prospects all the way through the sales funnel culminating in an actual mailing. It would seem that a partnership with MSPs might have come in handy to produce the mail generated by postal sales efforts. But when you belittle and demonize your partners as ââ¬Å"self-servingââ¬ââ (Potter's description), it is a little difficult to eat crow and ask for help.
During Mr. Whalen's tenure, the USPS eliminated postal support from most MSPs and concentrated his resources on trying to sell postal services directly to rate payers. Three significant problems soon arose with the grand plan from a copier salesperson (Whalen) and the PMG. The number one problem was that postal sales people couldn't find end user customers, new or old. To assist in their sales efforts, postal management instituted a policy requiring MSPs to provide contact information for their customers. This information and information from subsequent postal requirements continue to provide easy access to confidential information about MSP customers.
The second significant problem was that with big company experience, the new sales guru directed his sales teams to only call on big customers. As small and medium sized business customers slipped away to the Internet, sales teams chased only the biggest customers. For a while it appeared the goal of not dealing with smaller and less sophisticated postal customers would pay off, until the bottom fell out of mail volume starting in 2007.
The fallacy of only wanting to deal with large customers was self-evident, as the USPS watched the retraction of the financial services industry devastate mail volume and send postal finances in to a death spiral. In 2010 the USPS rediscovered that the small and medium sized business market, which they had ignored since 2000, represented a huge potential for the Postal Service. It is a shame they didn't nurture that market, when they owned that market!
The third problem, as expressed by postal sales people, was that they were able to get people interested in direct mail but were unable to close the deal. The USPS (then and now) was not allowed to provide mail preparation services. Potter and Whalen never developed a coherent marketing/sales plan that included taking prospects all the way through the sales funnel culminating in an actual mailing. It would seem that a partnership with MSPs might have come in handy to produce the mail generated by postal sales efforts. But when you belittle and demonize your partners as ââ¬Å"self-servingââ¬ââ (Potter's description), it is a little difficult to eat crow and ask for help.
Fast forward to 2012.
The Postal Service's sales effort, after nine years of concentrated work and millions of dollars spent on trying to sell direct mail, has failed! The relationship between MSPs and the Postal Service has grown more contentious and confrontational, while mail volume continues in free fall. The Postal Service's marketing response to the near bankruptcy of their organization? First they intensified their disruptive sales techniques, which negatively impacts MSPs. Second, they now provide print and mail services in direct (and unlawful) competition with the industry they are supposed to serve. Third, they deny (lie?) that either of their first two responses are happening. All three responses are irrational coming from an organization in an ethical and financial crisis!
The simple fact is the USPS cannot sell direct mail!
The simple fact is the USPS cannot sell direct mail!
More than a year ago postal marketing received approval for their Mail Works Guarantee program. This program was designed for the very largest companies in the country that do not currently use direct mail in their advertising mix. If the company tried direct mail and the campaign did not achieve agreed upon goals, the USPS would refund their postage. To date, the Postal Service has had zero success in selling the program to even one company. In other words the Postal Service's top sales/marketing/management people cannot sell direct mail, even when they offer free postage in the event the marketing campaign is not a success.
In the summer of 2011 the USPS introduced the Direct Mail Hub. The USPS test marketed selling printing and direct mail services through an on-line store owned by a contractual (direct revenue sharing) partner. The contract was designed to allow postal sales teams to sell printing and mailing services directly to end users. The goal was to generate a revenue stream for the USPS by competing directly with MSPs. Their on-line partner was to provide the printing and mail preparation services while the USPS provided all of the sales and marketing assets.
Postal sales and marketing efforts included Webinars, robust direct mail, Grow Your Business Promotional meetings in every Post Office in the targeted areas, and personal sales calls or visits from postal sales people. After nearly a year of trying, the mighty USPS sales effort generated (approx.) 100 small mail jobs, most of which were less than 10,000 pieces. Accurate statistics for a failed program are rarely made available by postal bureaucrats, for obvious reasons. The Direct Mail Hub has been put on the back burner because of the significant cost per sale of the marketing campaign. Who would have thought that selling direct mail would be so hard? Program managers were astonished at the amount of hand holding necessary for small businesses to complete a mailing. Instead of rolling out the Direct Mail Hub nationwide, the USPS is winding the program down signaling yet another significant marketing failure.
EDDM has been hailed as one of the Postal Service's biggest marketing successes, and yet it too is a failure. EDDM was designed to target non mailers and convert them in to direct mail marketers. The USPS is reporting phenomenal results from this program. But the simple fact is that if sales people were not calling on existing mail users (most of which are MSP customers) the program would have been scrapped long ago. MSPs, great and small, from around the country have been complaining to postal management that sales people are calling on existing customers and converting them from higher cost postal products to EDDM. Note to new VP of Marketing: self-cannibalization is not a winning strategy! Postal management keeps saying that this isn't happening, that this shouldn't be happening and that the postal sales force has been told not to call on existing customers. And yet they keep calling!
The last two weeks of June saw an EDDM marketing blitz from the Postal Service involving both email and phone based campaigns. If the Postal Service was truly targeting non-users of direct mail, wouldn't they match their marketing list against a list of current customers (permit holders), thereby reducing costs and increasing marketing effectiveness? Isn't this how it is supposed to be done?
There is so much pressure to sell EDDM that the marketing staff doesn't care who is contacted, which is why MSPs across the country recently received phone and email messages talking about the virtues of EDDM. EDDM is another postal marketing program that has failed at its stated goal, to only market to non-users of direct mail. It also proves postal management is duplicitous in its dealings with our industry.
The Postal Service's policy of going it alone has been a total failure. Let's hope current management will change course and initiate a new partnership with its most loyal customers.
Todd Butler, Butler Mailing Services, eKEY Technologies can be reached at 513.870.5060, toddb@butlermail.com or
www.ekeymailer.com.
Making postal delivery, an interactive, multimedia experience!
