Jan. 8 2008 01:20 PM


New Ideas Make for a Smaller Target

One of my original mentors in this industry, Van Seagraves, acknowledged in one of his softer moments that the Postal Service operates in a fishbowl. For that reason, it is an easy target for criticism.


It is easy to criticize the Postal Service and other large organizations because they move more slowly than more nimble free-market enterprises. That's the nature of the beast. And it's also easy for some of us in the industry to shoot down Postal Service ideas without offering any constructive proposals. That's not fair either. But many Postal Service customers actually have loads of good ideas about how to improve the mail business. They have to make improvements in their own shops every day. Ask the major printers what they are doing to be more efficient or innovative, and they'll provide you a list. They know that they have to keep their productivity growth at about double the growth in inflation because they simply cannot seek price increases every year from clients.


They'll show you improvements in processes and efficiencies as well as ways to drive costs out of the system. Their clients also have some ideas about what they actually want to put in the mail and how they want their envelopes to look, which is based on what drives a response to their offer. That is, mailers don't have the luxury of only considering how best to fit the envelope on a postal machine. If a No. 10 envelope doesn't pull a response, they can't keep mailing an offer in it. In short, they'd like the Postal Service to consider what is working for mailers rather than only what runs best on the postal automation equipment when designing its rates.


Many industry observers suggest the Postal Service suffers from the "not invented here syndrome." That is, if it's not a Postal Service idea, the USPS won't give it a try. What a shame especially as we enter an era where the USPS has to rely on growth in revenue to keep its rates below the growth in inflation. It can't keep cutting its way to prosperity. It will need revenue growth from new products, more volume in the old products or, ideally, from both of those things. Believe it or not, successful businesses actually look to their customers for ideas on new products. No point in introducing a product no one wants.


I have some ideas of my own on building the business and I offer them here, with no desire for compensation or even recognition. If one of them should take off as a huge money-maker for the Postal Service, I'll be satisfied in knowing I played a small part in the ongoing viability of the nation's postal system.


1. First of all, put the Automated Postal Centers in retail outlets that are not post office lobbies. If someone comes to the post office, they are likely to be regulars and inclined to stand in line for a clerk. Steering them to an APC in the lobby might not work. Try putting the APCs in grocery stores or bank lobbies or the entrance to the local mall. I suspect they would have better traffic and come closer to meeting their projected return on investment.


2. Work with catalogs and online retailers to encourage them to keep their "shipping and handling" charges realistic. I know many people who are turned off by the excessive shipping and handling charges and won't shop online or via catalog because of them. Why are the shipping charges based on price of order and not on some estimate of the weight of the goods ordered? Should a $100 necklace cost more to ship than two pairs of shoes totaling $65?


3. Work with product manufacturers to encourage use of rebates. I'll admit, I hate rebates. I say just put the product on sale. But here's an opportunity for the Postal Service to get some mail moving in both directions. A consumer sends in his or her receipt and other forms to the manufacturer, who then sends the rebate to the customer via mail.


4. Give a discount for Carrier Pickup on certain days of the week. If a small business generally sends a handful of packages a week, give a discount for having the carrier pick them all up on one day of the week, such as the slowest mail day of the week. Granted, some companies might not have the luxury of waiting, but some might and would be willing to adjust their practices for a discount.


5. Turn the USPS sales force into customer service representatives who can answer questions about classification, preparation and mailpiece design to facilitate new customers' entry to the complex world of mailing. Give them the tools to encourage new customers, such as a "trial permit" for those companies new to direct mailing and considering using mail as a regular part of their advertising.


6. A simple formula for volume-based negotiated service agreements in market-dominant products. Alright, I admit this isn't my idea. I know there are parties working out just these kinds of solutions to streamlining NSAs. Let's get it done because the pace of getting NSAs approved is so slow right now that the companies involved have often changed their business plans by the end of the process.


7. Drop-ship discount for bulk First-Class Mail. Okay, this isn't a new idea either. I know, the Postal Service has resisted this for years and at least one argument has been that it would leave postal equipment idle at certain locations and/or times of the day. But as the USPS considers network realignment, it seems these issues can be worked out.


Remember, the marketing efforts should consider how to make mail more attractive than other advertising media and other communication options. The competition should be the consideration, not whether the USPS ends up giving a discount on something it used to get at full price. The market is changing and the choice for many companies will be whether to stay in the mail or get out altogether. We have to find ways to keep them in the mail.


I realize the Postal Service is a big ship that is difficult to turn quickly. And it will take some time for all of us to find our footing with the new postal law and all the new rules associated with it. Still, I'm reminded of another valuable nugget that my mentor Van Seagraves told me a dozen years ago: Being big is no excuse for doing it poorly. He's right about that as well.


Kate Muth is Vice President of the Association for Postal Commerce. Contact her at kmuth@postcom.org, 703-524-0096 or visit www.postcom.org.