COVID-19’s Effect on the USPS and Direct Mail Marketing

We’ve heard a lot on the news about essential businesses during COVID-19, but one we all count on that is not mentioned much is the USPS. The Postal Service, like many of us, have been greatly impacted by this crisis, and so has direct mail marketing in general.

What strange times we are living in right now as individuals and businesses. In 29 years of working with direct mail, I have never seen anything like this. We’ve heard a lot on the news about essential businesses during COVID-19, but one we all count on that is not mentioned much is the USPS. The Postal Service, like many of us, have been greatly impacted by this crisis, and so has direct mail marketing in general.

First there has been a dramatic drop in marketing mail with numerous events canceled and businesses shuttered, causing a need to send fewer mail pieces. Second, the USPS must maintain facilities and personnel based on CDC guidelines, which can be very difficult in a processing facility. For more details on that, you can read the statement that was issued to address this. And third, the USPS was already having financial troubles before the crisis without congressional action.

To address the drop in marketing mail, Mailers Hub along with several other industry associations have sent a letter to Postmaster General Megan Brennan and Robert Taub, chairman of the Postal Regulatory Commission (PRC) to express concern about marketing mail volumes.

They offered suggestions like a per-piece discount, deferring collections, extending or adding promotions and incentives, and deferring planned price changes for international mail.

As the letter stated, “Now is the time for action from the Postal Service and the PRC to keep businesses using the mail.” While the USPS may understand this, the challenge will be to find a “stimulus” for mailers that is within the limitations of the CPI cap and the rate setting process that the PRC is charged with enforcing. What the USPS may want to do to help mailers and what the law allows them to do may be very different.

So, one would think that when Congress is working on legislation to help businesses and individuals through this crisis that there would be some help for the post office as well. Check out what Leo Raymond, Managing Director of Mailers Hub wrote in the last newsletter issue:

“By voice votes in the Senate on March 26 and the House on March 27, Congress last week passed HR 748, the Middle-Class Health Benefits Tax Repeal Act of 2019, a $2.2 trillion program to help the nation’s economy and citizens deal with, and recover from the consequences of the ongoing virus-related crisis. Conspicuously missing was any aid for the Postal Service.

Instead, the bill only allowed it to borrow another $10 billion from the Treasury, going even deeper in debt. The final version of the bill was a dark disappointment for many in the mailing industry as well as the postal unions and their allies, who’d hoped Congress would use the occasion to lift some of the Postal Service’s burden of debt – not make it worse.”

From Target Marketing’s sister brand, Printing Impressions, Lisbeth A. Lyons VP, Government and External Affairs of the Printing Industries of America (PIA) shared additional thoughts about the $10 billion line of credit, and what PIA is looking to do in regard to the situation:

“This is a short-term victory as it throws a lifeline to USPS, which is reporting an 18-percent drop in entered mail this week as compared to the same week last year. However, simply extending more credit is not the best solution to what could be an impact to USPS greater than that of lost volume and revenue post-9/11 or post-2008 financial crisis. PIA is redoubling efforts to achieve more structural changes and financial stabilization such as full repeal of the onerous pre-funding of retiree health benefits requirement in the next phase of Congressional response to COVID-19.”

This crisis is going to go on for a while and those of us that send direct mail could use some relief in order to get marketing mail numbers back up. We have seen movement in the B2C mail stream as many people are now stuck at home; well-designed and executed direct mail is something they look forward to getting.

Sending Direct Mail During COVID-19

If you are a B2C marketer, you should take advantage of this situation and provide good quality direct mail offers that your customers can use. On the other hand, the B2B market is a whole other story. With many companies closed and employees working from home, your direct mail may not get to the right person. For now, you should plan to hold your mail pieces until your customers return to the office, and consider other channels that may be more appropriate for reaching your B2B customers.

As we continue to navigate the coronavirus pandemic and get closer to reopening the country fully, you can expect marketers to be planning and executing as many relevant marketing campaigns as possible to help get our economy moving again. What has been happening in your area? Do you have any bright spots to share? Let us know in the comments!

The Benefits of the USPS 2020 Tactile, Sensory, & Interactive Mail Promotion

Do you want to create awesome direct mail pieces that stand out and get results? Well now you can do that, and save 2% on your postage! The purpose of this promotion is to encourage sensory engagement with physical mail pieces, and it’s my favorite promotion the USPS is running this year.

Do you want to create awesome direct mail pieces that stand out and get results? Well now you can do that, and save 2% on your postage! This USPS promotion runs from Feb. 1, 2020 through July 31, 2020, and all eligible pieces can claim the discount. The purpose of this promotion is to encourage sensory engagement with physical mail pieces, and it’s my favorite promotion the USPS is running this year. Why? Because only direct mail can provide a tactile experience — no other marketing channel can do this.

There are three featured categories in this promotion:

Specialty Inks

Qualifying inks may include but are not limited to:

  • Conductive inks: Inks with a circuit that can be used to activate an electronic device. Users press a “button” to activate lights, sound chips, or other electronic sensors and components.
  • Leuco Dyes/Thermochromics: Heat sensitive dyes or inks change color in variation in temperature.
  • Photochromic: Changes color with UV light exposure.
  • Optically Variable Ink: Contains metallic materials that change appearance when viewed from different angles.
  • Piezochromic: Change appearance under pressure.
  • Hydro chromic: Change appearance when exposed to water or liquids.

Each of these inks are very unique and interactive. They can make your mail piece fun for your customers and prospects.

Specialty Paper

The specialty paper must have one or more treatments such as scent, sound, taste, visual and/or textural. They must be connected to the marketing message on the piece.

  • Scent: Paper infused with scent such as catnip, fresh bread, or bubble gum, and grass.
  • Sound: Paper that incorporates sound chip or speakers.
  • Taste: Paper that incorporates edible components.
  • Visual: Paper that incorporates special effects such as filters, holographic, or lenticular.
  • Textural: Paper that incorporates textural treatments. Paper surfaces may be coated, or made of unique materials or incorporate techniques such as embossing or other surface treatments like sandpaper or soft touch.

I don’t think that using taste on a self-mailer is a good idea, but if you have a message that is best conveyed with taste you can enclose the piece in an envelope to keep it clean. On the other hand, I really love soft touch, I can’t help but to keep petting the mail piece. There are so many coating you can use for a wide range of different experiences.

Interactive Elements

The mail piece must include an experience that engages the recipient and adds dynamic effects in order to benefit from the promotion. Some examples are:

  • Infinite Folds: These fun folds provide a message at each turn of the fold and are usually folded through at least twice as they drive curiosity. Check out an example.
  • 3-Dimensional: These can be really unique and drive interest. As they are not flat pieces of paper but all kinds of things in boxes or tubes. Check out some examples.
  • Pop-ups: These mailers are fun and a little scary. They deliver flat and when you open them the pop up into a form. Check some out examples.

My two favorites from this group are the infinite folds and pop-ups. There are so many ways you can create interactive mail pieces.

You are only able to claim this discount for presorted standard and nonprofit letters and flats First class, presorted first class, bound printed matter, periodicals, and media mail do not qualify. All mail pieces must be submitted via USPS mail to the TSI Promotion Office for review and approval no later than one week prior to the mailing date. You can get all the requirements here.

Are you ready to get started?

Postal Rates and Internet Sales Tax Present Perfect Storm of Marketing Woes

This week I’m turning the blog over to some old friends at the ACMA. For anyone who uses direct mail, there’s a good chance postage will be going up dramatically soon. Whether you’re aware of that or not, this week’s post will bring you up to speed on the issues and how you can get involved in protecting your postage rates.

Note: This week I’m turning the blog over to some old friends at the American Catalog Mailers Association (ACMA). For anyone who uses direct mail, there’s a good chance postage will be going up dramatically soon. Whether you’re aware of that or not, this week ACMA’s Hamilton Davison and Paul Miller (former editor of our sister magazine “Catalog Success”) will bring you up to speed on the issues and how you can get involved in protecting your postal rates.

A Perfect Storm Headed Our Way

By Hamilton Davison & Paul Miller

Had enough snow-sleet-rain-wind-fire this past winter? Spring and summer could see even far worse storms in Washington, DC, that will affect all remote sellers — catalogers, publishers and e-commerce companies — for decades. Unless a strong industry push back is made, the resulting consequences will undermine your company’s profitability and add new complexity for both you and your customers.

These two major industry issues should have everyone’s attention:

  1. A potentially significant change (not for the better) in how future postal rates are to be set;
  2. The ramifications of a forthcoming Supreme Court ruling on the future of remote/internet sales taxes that could overturn over 50 years of precedent businesses nationwide have relied upon.

Our industry must mobilize to take action to respond to these industry-wide threats! The time to do so is right now. Inattention will be costly. Without a concerted, coordinated response, the outcome for both will be dire.

In each matter, it will remain with Congress to provide a solution. Moving bills through Congress is a challenge even in the best of times, but at this point in our political history, with charges and counter charges, with facts and fiction being obscured, even more effort is necessary. There are 535 different members of the federal legislature. Members of Congress respond best to the people that vote for them. So we need immediate constituent pressure on every member of Congress to let them know an important sector of the economy in their home jurisdiction is at risk.

ACMA is calling on every company with interests in remote selling, including all industry suppliers and other service providers, trade media to get engaged and help mitigate these very real threats facing our industry today. Whether with ACMA or some other trade group, history shows that professional associations are the best means to coordinate an industry response. Moreover, whether you are an AMCA member or not, ACMA will help you get connected to Congress. It is that important!

Let’s now examine these issues, explore where and how we go from here, and what must be done.

Postal Rates Going Up

A big change is in store for the postal rates-making process that may well lead to enormous rate hikes very soon. Here is how it happened:

  • The Postal Accountability and Enhancement Act, passed in 2006, called for postal rate increases to be capped annually at the consumer price index rate.
  • The system has worked well for most types of mailers since; postage rises only with inflationary pressure, something widely available and understood.
  • But the law called for the USPS’s oversight body (the Postal Regulatory Commission – PRC) to conduct a comprehensive review of the rate-setting system after 10 years.
  • Released this past December, the PRC review determined the price cap system hasn’t quite worked out as well as originally hoped. Medium- and long-term financial stability is allegedly not being achieved. In fact, the PRC proposed a significant change in which catalog postage rates will increase approximately 7% for Marketing Mail Flats and 5% for Carrier Route each year over the next five years. All mail will face significant increases.
  • The following five years, the PRC may elect to continue above-CPI increases or return to a CPI-capped maximum.
  • Assuming a level 2% CPI rate, this amounts to a cumulative 40% increase over the first five years (28% for carrier route) and upwards of 56% over the next decade (42% for carrier route). If inflation rises above 2% annually, total postage increases will be even higher.

The estimated percentage increases listed above primarily apply to mailers of catalogs and periodicals, because portions of these parts the postal system are considered to be “underwater.” Based on questionable data, some claim the Postal Service loses money in delivering such mail. But without question, the reported costs for flat shaped mail have risen rapidly since the purchase of the colossal Flats Sequencing System and now represents an existential threat to catalog and periodical mailers.

The PRC’s December review was termed a “proposal” and requested suggestions for alternatives. More than 100 commenters stepped up; the ACMA submitted four comments — one on its own, and three other joint comments with other industry groups. No time frame for a decision has been released, but the case is expected to be litigated.

Internet Sales Tax

Meanwhile, on April 17 the Supreme Court of the U.S. (SCOTUS) will deliberate for an overturn of its 1992 decision in Quill v. North Dakota, which held that businesses lacking a substantial nexus (or physical presence) in a state cannot be forced to adhere to their sales tax collection and remittance requirements. The case involves South Dakota’s 2017 suit against three online retailers: Wayfair, Newegg and Overstock.

3 Common Direct Mail Questions and Answers

Direct mail can be a complicated and intimidating marketing channel if you are not familiar with it or have encountered problems in previous campaigns. Don’t let that stop you from using it.

MailboxDirect mail can be a complicated and intimidating marketing channel if you are not familiar with it or have encountered problems in previous campaigns. Don’t let that stop you from using it. Here are answers to three common direct mail questions and concerns that can help you not only avoid issues, but have confidence that your direct mail will provide you a good ROI.

1. What Do I Do if My Data Files Are Not Current?
There are a few ways that data files can be cleaned to give you a fresh list. The first is to update addresses for moves. This can be done before mailing with the USPS NCOA (National Change of Address) data file. Your list is run against the USPS file and any move addresses are appended to your file.

In some cases, people move and do not update the post office with their current address. In those cases the records are flagged and the addresses can be removed.

Many times an outdated file will have people on it that are no longer living. In order to correct that problem, your data file can be run against the national deceased file.

This will provide you with all the people that should be removed from your mailing.

2. How Do I Keep My Postage Costs Down?
The first thing to do is to make sure that the design of your mail piece is USPS compatible. If it is not, you will have to pay postage surcharges. If you need help with the USPS regulations, contact your mail service provider and they can guide you.

The next thing to do is to make sure that you are only mailing to addresses that have been CASS/DPV validated, so you are sending to good mailing addresses.

Finally, choose your mailing list wisely. Only send to people that are interested in your specific offer. You can save the rest of your list for the next campaign that is a better fit. Sending an offer to someone who is not interested is more than just a waste of postage and printing, it can aggravate the recipient and have them think twice before buying from you again.

3. How Long Will My Mail Take to Deliver?
Since the post office has made so many changes over the last two years we have seen drastic changes in delivery times.

The worst recorded times were last spring. At that time, the post office really stepped up to the plate, admitted a problem and took measures to fix delivery times.

On average, the delivery times we are seeing for letter size mail are: First Class Mail to the other side of the country in five to seven days, Standard Mail in seven to 15 days. This can vary depending on the amount of mail at each post office along the way.

The closer the recipient is to the origin post office, the faster they will get the mail. In many cases, in order to speed up delivery of standard mail we will drop ship the mail to a post office closer to recipients. The cost of the shipment is usually offset by the postal savings when submitting mail to a local SCF (Sectional Center Facility).

Direct mail is a great way to reach recipients — even millennials like to get mail. Using the information we have discussed you can create direct mail that is cost effective and will contribute towards your ROI.

The three key factors that you must plan for in direct mail are the list, creative and call to action. Taking the time to create a formal marketing plan that includes direct mail is vital to your response rate. Do not send out direct mail without a plan, a way to track it and how you will follow up. Do you have a great direct mail story? I would love to hear it!

A Postal Wish List for 2015 – I Wish I Could Say I Am Thankful

We are amid the Holiday 2014 mailing season, based on my home address catalog count of 33 so far (since Nov. 1). In the batch, I have just one duplicate, a J. Peterman catalog that I don’t mind receiving twice since the copywriting is so entertaining—so I keep one at home, and take one for the road.

We are amid the Holiday 2014 mailing season, based on my home address catalog count of 33 so far (since Nov. 1). In the batch, I have just one duplicate, a J. Peterman catalog that I don’t mind receiving twice since the copywriting is so entertaining—I keep one at home, and take one for the road.

So it’s time to write to the North Pole—and I assume with USPS Network Rationalization my letter to Santa will still get there with plenty of time to make all my postal dreams come true.

Here’s what I’m asking—and feel free to add to my list…

10. Somehow, someway, USPS Standard Mail volume actually increased last year by more than 1 billion pieces. A trend? A repeat performance in 2015 will help.

9. Congress will stay out of the way on postal facility consolidation, correct that, right-sizing the delivery infrastructure. We have 82 more facilities slated to close in 39 states in the USPS plan—yes, we need to monitor performance closely in the face of consolidation, but no more Congressional moratoriums on closures where delivery performance is little or not affected.

8. But we do need Congress and the White House elsewhere. USPS management, labor and marketers—and Republicans and Democrats… Can we find common ground on a postal reform bill in the new Congress? We’re almost there… Let’s support each other to get our Postal Service humming for the 21st Century. Compromise is never easy…

7. E-commerce is booming, and USPS will continue to innovate as a competitive fulfillment provider, teaming up with partners and even competitors where needed to bring U.S. households outstanding customer services. It’s very impressive to see what USPS has been able to achieve here (read, no monopoly).

6. If a magnificent postal reform bill isn’t immediately forthcoming, maybe a budget bill can carry an amendment to permit the Postal Service to manage its own healthcare plan and return pre-funded monies that don’t reflect realistic future trends. USPS customers have overpaid billions into the current healthcare program, yes overpaid, and it’s only serving to fuel year-after-year deficits which is taxing all of us and restricting innovation.

5. Since all hell broke loose after the USPS 2006 rate increase, digital migration and the Great Recession in 2008-2010, Postmaster General Pat Donahoe still managed to generate $15 billion in savings. Leaner is the day, and we have also to thank USPS COO Megan Brennan, the 74th Postmaster General-designate. Her skills and continued leadership are welcomed, and needed—if Congress can enable financial reforms.

4. No CPI rate increase in January 2015—but timing and the pending court decision on exigency makes a rate hike some time later in 2015 more likely. According to Charley Howard at Harte Hanks in October, had a January hike been proposed, it would have been in the 1.5-percent range, but inflation could speed up or slow down as we enter the New Year—and who knows if and when exigency goes away? The uncertainty is tough for marketers to manage—if only the Postal Service would respect CPI indexing as the 2006 legislation intended. Then maybe so many ad dollars wouldn’t go (so quickly) elsewhere. Return to CPI methodology and discipline. Give marketers predictability that’s so sorely still not there.

3. Direct mail advertising: If you’re a brand manager, you’ve got to love it. All those 5000+ ad messages per day—and only a precious few are in the mailbox. You touch it. You read it. You set it aside for later reading. You “process” it. How many branded touches a day get that kind of consideration, particularly in a digital age? Let integrated marketing integrate media wisely, and find the mail “moments” for your brand.

2. Delivery points keep increasing—but USPS productivity increases faster. In fact, USPS achieved record productivity by its own measure in 2013. This is an achievement beyond revenue and volume measures, which collectively go to show what could be achieved if postal, fiscal and operational reforms were allowed to happen.

1. Congress does something that’s postal and productive. I haven’t been too naughty this year—so can Santa make Congress and The White House actually get something done?

Next Thanksgiving, I promise that I’ll be more thankful.

Calling Any Ideas for a Postal Service Future!

I read a review of a recently published biography of President Calvin Coolidge by Amity Schlaes, and it was the first reference I have found to a President who objected to public ownership of the Postal Service. That was nine decades ago! Nothing so earth-shattering is in the works these days, but the Postal Service itself is very much trying to tune up for a future look

Looking for ideas about the Postal Service’s future is very much in vogue these days. I thought I’d curate a few recent media discussions.

I read a review of a recently published biography of President Calvin Coolidge by Amity Schlaes, and it was the first reference I have found to a President who objected to public ownership of the Postal Service. That was nine decades ago!

Nothing so earth-shattering is in the works these days, but the Postal Service itself is very much trying to tune up for a future look. It recently held its third take on PostalVision 2020, and I was enjoying a read by Harte-Hanks resident Postologist Charley Howard on the conference and its idea generation about future revenue streams for the Postal Service, much of the pdf focuses on the digital platform and secure message delivery: http://www.harte-hanks.com/postology/Harte-Hanks_PostologyReport_2013_May.pdf.

Picking up on one of Charley’s questions: Do people in their 20s give the Postal Service a second thought? I was frozen a minute by this recent ReadWrite post: “My Teenage Son Does Not Know How to Mail a Letter, and I Blame Technology.” This is fascinating to a 50-something!

Recently, USPS Office of the Inspector General’s David C. Williams, who participated in PostalVision 2020, issued a public call for proposals—so to speak—on what Americans might expect from the Postal Service going forward. He thoughtfully cataloged some ideas on the office’s blog, citing white papers undertaken by the office: “Giving America a Voice: Digital Services,” “Giving America a Voice: Revenue Generation Opportunities,” “Giving America a Voice: How Best to Cut Costs?” and its initial “Giving America a Voice” post.

Clearly, America has invested in its Postal Service—and continues to do so—so why not build a bridge to a secure national digital delivery platform? To access and procure e-government services? Or the bevy of other ideas brought on the presence of this network, assuming efficiency in execution. When you have a single service that enters every delivery address in the nation almost every day, it’s certainly not a system we should be walking away from.

Augmented Reality, Wearable Electronics and the Postal Service’s Future

In my previous blog post, I commented on the United States Postal Service and its announced plans for five-day delivery, discussing the importance of hard-copy communication and a commitment to deliver such communication on a daily basis. In extending this commentary, I claim no nostalgia for daily mail delivery, rather simply recognition that such communication has its unique position as a vehicle for superb brand engagement. The Postal Service is not standing still in the digital age.

In my previous blog post, I commented on the United States Postal Service and its announced plans for five-day delivery, discussing the importance of hard-copy communication and a commitment to deliver such communication on a daily basis. In extending this commentary, I claim no nostalgia for daily mail delivery, rather simply recognition that such communication has its unique position as a vehicle for superb brand engagement.

The Postal Service is not standing still in the digital age.

Last October, when the Postal Service announced its intention to raise rates this past January, it also announced its schedule for postage promotions through 2013. And in the mix is a bevy of technology-driven, multichannel “positioning” of direct mail that leverages mobile and interactive channels.

Discounts
Look at this selected line-up from the USPS promotion calendar:

  • March-April 2013: Mobile Coupon/Click-to-Call
    This promotion seeks to increase the value of direct mail by further highlighting the integration of mail with mobile technology in two specific ways. First, the promotion would encourage mailers to integrate hard-copy coupons in the mail with mobile-optimized platforms for redemption. Second, the promotion will drive consumer awareness, and increased usage, of mail containing mobile barcodes with “click-to-call” functionality.

    Provides a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards and flats sent during the established program period that include a two dimensional mobile barcode inside or on the mailpiece. The barcode must either lead the recipient to a coupon that can be stored on a mobile device, or enable the recipient to connect by telephone to another person or call center via a mobile device.

  • August-September 2013: Emerging Technology
    This promotion is designed to build on the successes of past mobile barcode promotions by promoting awareness of how innovative technology—such as near-field communication, augmented reality and authentication—can be integrated with a direct mail strategy to enhance the value of direct mail.

    Provide a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards, and flats that are sent during the established program period and include print that allows the recipient to engage in one of the following:

    • an augmented reality experience facilitated by a smartphone or computer,
    • authentication of the recipient’s identity, or
    • an experience facilitated via Near Field Communication.

To receive the discount, mailers must comply with the eligibility requirements of the program.

  • November-December 2013: Mobile Buy-it-Now
    This promotion will encourage mailers to adopt and invest in technologies that enhance how consumers interact and engage with mail, and demonstrate how direct mail can be a convenient method for consumers to do their holiday shopping.

    Provides a 2-percent discount on the qualifying postage for First-Class Mail and Standard Mail presort or automation letters, postcards, and flats which include a mobile barcode inside or on the mailpiece that facilitates a mobile optimized shopping experience. To receive the discount, the qualifying mail must be sent during the established program period by mailers that comply with the eligibility requirements of the program

Augmented Reality
Next, in January during the media-frenzy of Consumer Electronics Show in Las Vegas, this Venture Beat post appeared, reporting on a USPS mobile app that uses “augmented reality” (subject of the August-September 2013 promotion) to integrate direct mail promotions with interactive programming on a mobile device and give recipients an enhanced digital experience with the mail piece. In augmented reality, a physical ad and an interactive ad comes together by way of an app, developed by Aurasma, rather than a QR Code. Augmented reality can be applied to any visual cues.

The apps keep coming. Associated Press then reported that Val-Pak, the company that sends blue envelopes stuffed with coupons, also wants consumer households to save money while driving. Valpak has partnered with Roximity, a Denver-based app developer, to bring coupons and deals to drivers of newer-model Fords and Lincolns who use the voice-controlled Sync AppLink connected to their mobile phone. The app allows people to hear about personalized deals from stores, restaurants and other businesses as they drive. The “coupon” appears on the driver’s smartphone and can be redeemed once the car is stopped.

Wearable Electronics
And how can you keep it all connected—the mail, the apps, the augmented reality, the mobile coupons? Why through wearable electronics, of course, article courtesy of The Atlantic Wire. The fashion verdict may be out, but the Postal Service is clearly thinking hard on how to keep mail relevant in an increasingly digital—and mobile—age.

I still maintain that the six or seven direct mail pieces I receive a day are precious real estate. They represent a tiny portion of the thousands of advertisements and brand “touches” I’m exposed to each and every day. Yet this is advertising that is largely targeted, and one with which I have a tactile experience—reading, responding, recycling as I deem appropriate. This is a powerful consideration, one that I certainly pay closer attention to. Will I be running to the app store to integrate this experience with my smartphone? Not anytime soon, but a hoodie for my iPod, ThinkPad and Samsung to tote and plug into would be nice.

USPS ‘Green Teams’ Net $58 Million – If Only Government Postal Policymakers Were So Innovative

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer. Posted Feb. 24, I include the full text of the press release here, followed by some commentary: Green Teams Help Postal Service Save Millions

The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.
—USPS Press Release (February 24, 2012)

Amid the doom and gloom of overall postal finances—where members of Congress and the White House probably have more to do with the current woes of the U.S. Postal Service than all the email in the world—came a timely press announcement from the USPS’s sustainability officer.

Posted Feb. 24, I include the full text of the press release here, followed by some commentary:


Green Teams Help Postal Service Save Millions

WASHINGTON, Feb. 24, 2012 /PRNewswire-USNewswire/ — The U.S. Postal Service saved more than $34 million and generated $24 million in 2011 by reducing energy, water, consumables, petroleum fuel use and solid waste to landfills, conservation efforts encouraged by the Go Green Forever stamps. The Postal Service recycled 215,000 tons of material, which saved $14 million in landfill fees and yielded $24 million in new revenue. Employee lean green teams were key to helping the Postal Service achieve the savings and revenue, part of which included more than a $20 million decrease in supplies spending from the previous year.

“Across the country, postal employees are participating in more than 400 lean green teams. Motivated by our sustainability call to action, ‘leaner, greener, faster, smarter,’ they are producing significant results in energy reduction and resource conservation,” said Thomas G. Day, Chief Sustainability Officer.

Lean green teams are another way the Postal Service fosters a culture of conservation, and builds on the agency’s long history of environmental and socially responsible leadership. The teams help identify and implement low- and no-cost sustainable practices to help the Postal Service meet the following goals by 2015:

— Reduce facility energy use by 30 percent,

— Reduce water use by 10 percent,

— Reduce petroleum fuel use by 20 percent, and

— Reduce solid waste by 50 percent.

According to Day, the Postal Service plans to deploy lean green teams nationwide in 2012 to help achieve these goals.

“With more than 32,000 facilities, a presence in every community, and the largest civilian fleet in the nation, we know how important our efforts are to make a positive impact on the environment,” Day added. “Our lean green teams are an important part of our conservation culture, and the effort to reduce our carbon footprint.”

The Postal Service buys sustainable materials and works to reduce the amount of supplies it purchases. The agency first developed a “buy green” policy more than 13 years ago, and has a goal to reduce spending on consumables 30 percent by 2020. Additionally, the Postal Service is working to increase the percentage of environmentally preferable products it buys by 50 percent by 2015. Environmentally preferable products are bio-based, contain recycled material, are eco-labeled and are energy and water efficient.

In its shipping supplies, the Postal Service uses post-consumer recycled content materials, which are diverted from the waste stream, benefiting the environment and helping customers go green.

The Postal Service has won numerous environmental honors, including the U.S. Environmental Protection Agency’s (EPA) WasteWise Partner of the Year award in 2010 and 2011, the EPA’s National Partnership for Environmental Priorities award in 2011 and the Climate Registry Gold award in 2011.

USPS is the first federal agency to publicly report its greenhouse gas (GHG) emissions and receive third-party verification of the results. For more information about the Postal Service’s sustainability initiatives and the Go Green Forever stamps, visit usps.com/green and the usps green newsroom.

USPS participates in the International Post Corporation’s Environmental Measurement and Monitoring System, the global postal industry’s program to reduce its carbon footprint 20 percent by 2020 based on an FY 2008 baseline.

The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.

A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation, 151 million residences, businesses and Post Office Boxes. The Postal Service receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world’s mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, the U.S. Postal Service was ranked number one in overall service performance, out of the top 20 wealthiest nations in the world, Oxford Strategic Consulting. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute.

SOURCE U.S. Postal Service

Thank you very much Thomas Day and thank you to each member of the 400 lean green teams at USPS.

Further, the $58 million in bottom-line gains were an improvement over the $27 million in such benefits reported by USPS a year ago. That’s more than double the financial improvement.

As a blueprint for other businesses, many with “green teams” of their own, this USPS announcement offers item-by-item suggested areas of operation companies might focus on to accrue bottom-line gains: facility energy use, water use, fuel use and solid waste generation and diversion.

Perhaps too many business leaders and marketing practitioners still equate sustainability initiatives with “do-good, feel-good” activities that are nonetheless costly or associated with premiums. They best start thinking otherwise. The more quickly brands can leverage green teams for operational gain, and incorporate sustainability as the next great wave of business cost-savings and innovation, the better off their bottom lines will be.

USPS is proving to all of us that there is a “lean” in “green,” and that waste and inefficiencies are cost centers that must be managed. The environmental gains that are driven by such successful management are numerous, and very well may engender good will among employees and customers. Nothing wrong—and everything right—with that, particularly when the financial bottom line benefits are so demonstrable.

Some skeptics might still say, with billions in deficits, USPS cost-savings announcements tied to sustainability are akin to rearranging deck chairs on the Titanic. I believe, however, that USPS management does have a business-like approach to fixing its finances in a digital age, has put forth a credible path to do so, and Congress and The White House need to be facilitating these decisions instead of standing in the way.

Unfortunately, Congress and The White House happen to be two U.S. institutions that are very challenged by balancing budgets.

The Congressional cry of “not in my backyard” over post office closures is part of that symptom, particularly when the USPS has proposed many retail outlet alternatives that are more convenient to citizens, and far less costly to postal ratepayers. The recent Congressional moratorium until May 15 toward consolidation of mail processing facilities is another cog in the cost-savings wheel. Meanwhile, the White House just can’t seem to let go of forcing through a 2010 “exigency” postal rate increase (in its current, proposed federal budget) that, in effect, undermines the entire rationale and integrity of indexed rate caps built into the 2006 postal reform law.

Perhaps there needs to be “lean green teams” at work inside the policymaking offices of Congress and the White House, too. Certainly, sustainability concepts—environmental, social and financial—could work to extraordinary effect inside government, just as it’s doing in forward-thinking businesses everywhere, and trying to do with great success inside the U.S. Postal Service.

Helpful Links:
USPS Press Release covering Green Teams in 2011

USPS Press Release covering Green Teams in 2010

Postal service in Finland tries an experiment that direct marketers will despise

Did you see this story about Finland’s postal service? They’re conducting an experiment with a small group of customers, in order to cut down on pollution and overall costs, in which all household mail is opened by postal employees in a “secured” location and then scanned and sent by email to the customer. I suppose, in the age of Facebook, that people don’t mind having other people eyeing their personal mail.

Did you see this story about Finland’s postal service? They’re conducting an experiment with a small group of customers, in order to cut down on pollution and overall costs, in which all household mail is opened by postal employees in a “secured” location and then scanned and sent by email to the customer.

I suppose, in the age of Facebook, that people don’t mind having other people eyeing their personal mail … and that it’s hard as hell to open an envelope by ourself. The UK Telegraph writer begins the story smartly, sounding the alarm bells: “Not even the most intimate love letters, payslips, overdue bills and other personal messages will be spared under the controversial scheme.”

Of course, few of us get love letters anymore, but that doesn’t mean we relish the idea of others checking out our credit card bills. One commentator on a forum called the experiment straight from the KGB play book. (KGB seems a little extreme; I’ll go with Orwellian, instead.) We like our privacy, and it’s why the U.S. Postal Service continues to get such high marks from Americans: Our mail arrives where it’s supposed to, and nobody opens it. Likewise, we receive mail that’s retained its seal. When that seal is broken, so is our trust.

For the volunteer Finns, they can actually get their mail pieces delivered to them, but after it’s been resealed … by a stranger. Creepy, methinks.

The direct marketing community, meanwhile, must frown on such an experiment. Reducing a well designed mail piece to a measly email? Now that’s a lousy deal.

For now, some private companies are offering such services to consumers, such as Earth Class Mail, which originally brought the idea to Swiss Post, and Zumbox, which also scans your mail and then puts it into your Zumbox email box.

But since marketers will be charged anywhere from 2 cents to 5 cents per mail piece on Zumbox, I don’t see that many companies wanting to foot that bill for essentially an upgraded email. Again, it simply robs direct mail of its true “landing” and “feeling” power. They’re acting like the recipient is the beneficiary, but we all know that it’s Zumbox … while customer and mailer alike have their relationship digitally reduced.

And like my colleague Hallie Mummert said to me, “Who’s going to sign up for yet one more inbox via which to receive non-targeted junk mail?” People still like mail, maybe even more so now because there are many ways to control the flow, but people are getting rather sick of email. So in some ways Zumbox, and certainly Finland, may even be behind the curve.