Caution: Reading this article could make you sick, too!

Unless you've been living under an imposed news quarantine, you know that the USPS is in trouble. Big trouble.

The famously (and arguably) non-governmental organization must report to the government overlords of the Postal Regulatory Commission and the US Congress--(an arrangement that is enough to give even a healthy organization schizophrenia). But for the USPS—forever in a sick bed—the last few years have been especially trying.

Hemorrhaging money as mail volume dried up due in part to the ascendancy of email and exacerbated by the decline of the economy, the USPS has tried to persevere by cutting costs.

It pulled the once nearly-ubiquitous blue collection boxes from street corners. It closed under-performing post offices and consolidated processing centers. It let people go by the droves and urged others to take early retirement. It consolidated carrier routes so it would require fewer vehicles and fewer staff. It introduced expensive equipment that would extract financial punishment from unwitting mailers.

It became a shopping destination—while not rivaling the Mall of America, one could get stamps, stationery, gift wrap and boxes there. It even flirted with becoming a bank.

Nothing seemed to work.

And then the PRC and US Congress hammered it with a requirement to prefund retirement benefits. When the post office asked for emergency postal increases, its lawyers lost the argument on an obvious technicality they had not anticipated.

Late last week the USPS's sniffles turned to pneumonia when the USPS announced it had lost almost $10 billion this fiscal year—a staggering amount, and yet another historic high in a string of lamentable historic highs going back ultimately 10 years.

With mail volume predicted to fall farther (every 1% in decline equals $300 million of lost postal revenue) the post office's options are getting fewer.

Now the post office is left with the option of closing as many as 3600 mostly rural post offices and consolidating operations at 250 processing centers. Another 120,000 postal workers face layoff, and Saturday mail delivery may become a dim memory. Privatization is a possibility. As the negotiators say, "All options are on the table."

See whether your favorite post office is on the cutting block, click on the maps. Blue for soon-to-be-closed local post offices; red for regional processing centers.

For interactive maps, please visit here.

Then take an aspirin and be thankful you don't have the Postmaster General's job. It won't cure anything, but it might make you feel a bit better.

To view larger images, please click to open.

SOURCE: USPS. GRAPHIC: Emily Chow and Wilson Andrews -
The Washington Post. Published Sept. 29, 2011.

Coming soon! To a mailbox near you! The next Great American Make-Over! Starring: The United States Post Office!

Not unlike the popular TV show in which a busload of contractors arrive at a home of a deserving-but-beleaguered "every family," intent on re-inventing the dilapidated structure (while sending the gob-struck family to Disney World for a week), the USPS is starting a dramatic make-over of its own. But without the diversionary trip to Disney.

Not unlike the TV show, the heroes in the rock-star bus do not show up until the last second, when the inhabitants are at its collective wits' end.

Not unlike the TV show, no one really knows what the outcome will be until later. And no one truly knows if folks will like what they get.

While not beset with awful diseases like these TV families, the USPS is seriously ailing and needs help fast.

Acknowledging that its current business model is unsustainable, USPS management cites huge declines in mail volume (thank you, internet and email)...as well as expensive-to-maintain, but probably-no-longer-necessary facilities...the folks who work (or don't have enough work to keep busy) in those underutilized facilities...and the dreaded Congressionally-mandated retirement pre-funding.

The cumulative effect is that the USPS has been saying if things are not resolved, they will be insolvent by September 30th.

Cue the bus. It's time for triage.
The USPS has manfully tried to forestall the current situation. Since 2006 it has closed 186 facilities, deep-sixed 1,500+ pieces of equipment, and decreased staff by more than 110,000. Result: $12 billion saved.

Good start, but not enough.

Realizing that it needs to save $3 billion (that's billion with a "B"!) a year, the USPS is considering closing or merging 250 more processing facilities, reducing equipment by another 50%, decreasing the transportation network, and eliminating up to 35,000 more jobs.

Ouch!

So what does this mean to those of us who mail to promote our businesses or non-profits, and hope to see mail in our mailboxes when we get home every night?

#1. Time delays. Fewer people and less equipment could mean delivery delays. The USPS Standards of Performance tell the tale:

Standards of Performance
	Today	Proposed
Priority	1-3 days	1-3 days
First Class	1-3 days	2-3 days
Periodicals	1-9 days	2-9 days
Standard Mail	3-10 days	3-10 days

OK, that's not too bad, all things considered. But what about...

#2. Postage increases. Count on it. Stay tuned.

#3. Closure of local post offices. Absolutely. Non-profitable locations—mostly in small towns—are already packing up.

#4. Procedural changes for mailhouses. No doubt. But exactly what and when is still TBD. Among the items on the table are:

• Reduced points of entry for dropshipped mail
• Rate changes in zone-based mail
• Schedule shuffling to meet required "in home" dates

So when will this take effect? September 30th is, after all, just days away.

Protocol requires that the USPS (1) put its proposal out for public comment. That happened on Thursday, Sept 15th. Then the USPS (2) asks the Postal Regulatory Commission (PRC) for approval. The PRC (3) considers, then proposes. A "reasonable amount of time must pass" before the USPS implements any nationwide service change (4).

Using the debt-ceiling debaters as a role model for bureaucratic efficiency, the USPS hopes to have its proposal presented to the PRC (step 2, above) by the end of October—one month into its insolvency.

The PRC is expected to respond by—well, we really don't know. But the USPS says it hopes to begin its consolidation and constriction efforts (step 4) by February or March of 2012. Only six months after its September 30th deadline for insolvency.

Adding more stress: The economy is showing few signs of recovery. The Super Committee (Debt Ceiling Part 2) isn't making headway yet. And the American public is understandably antsy.

Cue the bus! Disney World is looking better by the minute.

Bulking Up First Class Mail?

The USPS, which has been hemorrhaging money for a decade or longer, is desperate to keep mail in the mailstream. Beset by reduced volume (thank you, internet, email and the economy), rising manpower costs (thank you, ballooning retirement fund), an aging infrastructure and too many facilities, the USPS is creatively looking for ways to reduce cost and increase mail volume.

To that end, the USPS has offered postage-on-sale promotions for the last 2 years that have been widely popular among their target groups. For instance, most recently the USPS announced that business mailers using a QR code in July or August of 2011 could receive 3% off First Class or Standard postage rates.

And now here's the latest thinking: Mailing the 2nd ounce of First Class mail for the same price as the first ounce.

Not bad, eh?

Consider the price difference between First Class and Standard mail: Three letters mailing at Carrier Route Saturation Standard rate equal approximately the cost of mailing one letter at First Class. Hence, it would seem logical that encouraging First Class mail usage would be a no-brainer for the USPS.

Less work. More money.

Today a letter weighing up to one ounce costs 44 cents to mail; the 2nd ounce adds 20 cents. That means in a letter you can get approximately 4 sheets of paper (or 3 sheets and a reply envelope) for the first 44 cents; but go to one more sheet of paper—even a tiny little lift note—and you're staring at an additional 20 cents.

But at Standard you can mail up to 3.3 ounces for a much lower price. The weight differential is huge. In today's postal pricing structure, heavier packages almost always have to mail at Standard as the price difference is punitive.

But it's not just about money. It's about time. First Class is delivered in 2-3 days; Standard can take 2 weeks. If your hair is on fire because you botched your pre-event planning and your event is now two weeks away, you may have to mail at First Class. Cost be damned.

It happens all the time. Just ask me.

So if the USPS is willing to allow that 2nd ounce for the same price as the first ounce, maybe—just maybe—more mailers will use First Class. And maybe—just maybe—the USPS will benefit by higher mail volumes.

Best yet, because it is not a rate increase issue, the proposal doesn't require an Act of Congress or the Postal Regulatory Commission to approve it. Hence, it should be do-able with a minimum of fuss.

Making this happen would require very little—if any—additional cost to the post office. After all, it takes no more labor to process a heavier letter, and it requires no more machinery.

Now consider who wins—in addition to the post office:

1. Printers win. They could print more materials.
2. Paper companies win. They could sell more paper.
3. Mail houses win. They could process more mail.
4. Equipment manufacturers who serve the printers and mailers win.
5. Mailers win. They could mail more materials for the same price.

Who loses? I can't even think of a loser. It's a win/win all around.

The Post Office Board of Governors is considering the idea as I type. How long those considerations can take is TBD. If they give it a quick approval, it could be put into effect this Fall.

Just in time for the Year-in-Review family newsletters that go out at the Holidays.

Treats Coming to Your Mailbox Soon! Maybe.

"Care Packages" have been a staple of college life for generations. Similarly, "Goodie Bags" have warmed the cockles of many a soldier stationed far from home. These packages from home, lovingly filled with Mom's chocolate chip cookies, popcorn, and other treats fill the void of separation just a bit.

Now the USPS has glommed onto the "Care Package" concept in hopes that manufacturers will realize the benefit of mailing tempting samples to consumers hungry for a bit of good news in their mailboxes.

The "Samples Co-Op Box" concept will contain a mix of health and beauty aids and snack food products from multiple packaged goods companies. The companies—who no doubt have a "no competition in my box" agreement with the USPS—agree to share postage costs.

The USPS program is set to launch in early May in Charlotte NC and Pittsburgh PA, where about 200,000 consumers will become the guinea pigs for this new postal initiative.

After delivery, the USPS will distribute surveys to consumers to gauge their response to the program—and to the products they received. The test will be considered a success if the manufacturers see an increase in purchases or brand awareness, and if the USPS gets good feedback from the consumers. Analysis of delivery costs, per-box cost and effect on brand awareness as well as retail sales data will take several months to complete.

If the results are favorable, (and what's not to love about receiving free chocolate chip cookies in the mail?) the USPS could do further tests to determine optimum price points or could roll out nationally without further testing. TBD.

The post office does not expect to create revenue from the test. But a permanent program could make millions of dollars for the hard-strapped postal service which lost $8.5B in 2010 and has already lost more than $1.1B in the first two months of 2011.

Product sampling is big business, generating $4B a year in the US alone. The USPS wants to stake its claim on part of that lucrative enterprise and simultaneously chip away at its debt.

Free cookies in my mailbox? Bring 'em on, I say.

I'll take mine with macadamia nuts, please.

Postage goes on Sale this Summer. The USPS plays Texas Hold'em

Excited rumors have been circulating for several weeks now that the post office is preparing to put postage "on sale" this summer.

Rumor confirmed.

But like most rumors—and poker games—there's a grain of truth, a lot of misdirection, and real-time strategies and intricacies that haven't been thoroughly worked out yet. Unlike most poker games among friends, the stakes here are enormous.

Here's the deal as I understand it.

The USPS says that a small number of organizations spending more than $250 million a year on advertising could qualify. These unnamed 16 top advertisers (that's it—just 16 companies are being invited to participate!) will be expected to mail between 500,000 and 1 million pieces each of First Class or Standard mail.

Those are the basic rules. Limited players: only a chosen few can play at these rarified heights.

Lots of mail: this bargain comes at a price for the advertisers. And someone—but I don't know who—is developing a unique set of metrics to measure the success of the campaigns.

But is that someone playing with a marked deck? For example, who wrote "the unique set of metrics?" I dunno. How are these metrics different? "Unique?" I don't know that either. But that is where the cards could be stacked.

On this side of the table, the USPS is putting a lot on the line. If a mailing's response does not achieve "success," (as defined by that "unique matrix"), then the USPS will refund the participating company up to $250,000 in postage.

On the far side of the table, the participating companies have skin in the game, too. If their mailing test fails (that "unique matrix" again), the USPS will not refund printing and production costs.

Explaining the USPS's thinking behind this high-stakes challenge, a USPS spokesperson said "The Postal Service recognizes that... a number of large advertisers do not employ the mail as a key component of their advertising mix. We strongly believe that in any intelligent, integrated campaign, mail can play a part. The objective... is to put our money where our mouth is and to prove to large advertisers that mail will improve the ROI of their marketing campaigns."

The "sale" may be extended for as long as two years, but is limited to organizations spending less than 0.36% of their total ad budget on postage. It follows on the heels of other postage "sales" that the USPS initiated in 2009 and 2010 in an effort to boost lagging volumes.

Like a marathon poker tournament, apparently we won't know how this ambitious effort fares for quite some time. Let the chips fall where they may.

Diamonds are Forever, and now so is Green...

Following up the success of the first "Forever Stamps"—a First Class stamp that can be bought at today's prices and used well, forever—the USPS has just launched another.

First in the USPS's Social Awareness series, each of the 16 stamps on the sheet offers low and no-cost tips to save energy and natural resources. And the predominant color is green. Naturally.

For instance, the stamps suggest using reusable shopping bags... fixing water leaks... using energy efficient light bulbs... maintaining tire pressure... switching off lights when not in use.

You know the drill. You've heard it before. These are the simple things that your parents tried to tell you about responsible behavior. Now the USPS is telling you, too.

Nag. Nag. Nag. Maybe you should listen this time.

But beyond the obvious value of preserving life on earth, there may be a financial benefit to using these stamps. Actuaries and Uncle Scrooge, take note!

Consider this: If you send 200 Christmas cards each year and you figure you've still got 30 Christmases ahead of you, that's 6,000 stamps you'll be licking in December. Maybe you mail 20 birthday cards, bills and miscellaneous whatnots each month. 20 x 12 months in a year x 30 years. That's another 7200 stamps over 30 years. Total: 13,200 First Class stamps in your future.

Buy in bulk today and pay just 44 cents forever. So even if rates go up, you're protecting your position at 44 cents.

No more postal inflation. Future rate hikes be damned! For a measly $5808 investment today you've protected yourself against future First Class postage rate increases.

Buy today and save enough $$$ in 50 years to put your great grandchildren through college! Or at least buy them a beer after class.

Now if the USPS simply invests that $5808 at 8%, in 64 years it will be worth big bucks! The mind boggles with possibilities. It's like buying futures when you can actually see into the future. It's so good it oughta be illegal.

The mind also boggles with possibilities of what will happen to our planet if more of us don't recycle, conserve water and use less energy. $4 a gallon for gas is just the tip of the iceberg. Oh yes, and the real icebergs—and the polar bears, walruses and seals who depend on them—will soon be just a bittersweet memory, relegated to the History Channel.

So consider this stamp a winning trifecta. Save the planet, just a bit, save some $$ in the bargain, and maybe most important of all, get ego-boosting "I told you so" points for reminding your less-than-aware friends about the importance of conserving our natural resources.

Way to go, Post Office!

Printing and Direct Mail: We're in a Growth Industry! Or you can't believe everything you hear.

Doom-and-gloomers say that print is doomed. Direct mail is a goner. What started with the ancient papyrus-wielding scribes, grew exponentially when Gutenberg discovered offset printing, is finished. Caput. Stick a fork in it, they say. It's done.

They name the internet as the one singlehanded instrument of destruction. They cite video-game-generation short-attention spans as an accomplice and falling postal usage as evidence. Those of us in the putting-ink-on-paper business might as well be selling buggy whips, they say. We're done for.

But whoa, there, guys. Not so fast!

A leading marketing research firm, the Winterberry Group, has dramatic evidence that flies in the face of these print pariahs.

Winterberry predicts that direct mail spending will grow by 5.8% this year; while direct response print will increase by a not so robust, but still sweet 2%. But Digital and the variable data printing it provides—will increase by a whopping 14%.

14%! Wow! But let's back up a bit.

2008 to 2009 was catastrophic for print-based marketers. Printing and direct mail volume declined by a staggering 16.7% in that one 12-month period, ending up the year at $43.8B sales volume. But by mid-year 2010, things were turning around. From July to December, volumes bounced back by 3.1% producing an EOY value of $45.2B.

Winterberry predicts that all signs are for 2011 to continue the rebound, increasing by 5.8% and coming in with an EOY value of $47.8B—$4B higher than we were just 2 ugly years ago. Not bad for an industry on its deathbed, eh?

So what's going on?

The great recession seems to be easing. People are spending more again, and many marketers are returning to the mail. Furthermore, the long-touted email revolution isn't panning out quite the way it had been expected to. So marketers are abandoning the electronic world for good old fashioned print again.

At the same time, USPS-enforced regulations to keep lists cleaner, and greater acceptance of detailed response analytics mean that mailers can mail smaller, but more accurately and with more highly targeted campaigns. Hence, they should see better ROI for their efforts.

The USPS is doing its part by not seeking huge postal increases for 2011.

Digital is the big winner because as marketers mail with greater specificity, their volumes drop. And as you—savvy marketer that you are—probably knows, digital is more economical at lower run lengths. Added to the digital difference is digital's ability to create custom pieces for each recipient, thus targeting the messaging even more tightly.

So before you believe the doom-and-gloomers who are predicting the end of the print world, please consider that we are in rapidly evolving times. It's happened before and it is happening today.

We're at the conflux of technological availability and economic necessity. Printing and marketing is changing; it is not going away.

Is this Great or What? The post office launches a new rate calculator service.

I mean, really, how many times have you pondered the post office's intricate postage rate charts to try to ascertain which class of mail would be best?

A dozen? Two dozen?

And how many times have you given up in distress and frustration, trapped between automation and non-auto rates, zone charts, piece-and-pound calculations, advertising vs editorial copy ratios, and other incomprehensible mumbo jumbo?

A dozen? Two dozen?

Mmhmm. I betcha it's more. A lot more.

Well, the post office feels your pain. And in an effort that's both noble and generous (and maybe just a tad self-serving) to help ease your distress, the USPS has come up with a neat little electronic gizmo to help you calculate your optimal postage rate.

If enough of us use this new tool, it could relieve the stress of certain customer service postal workers I've talked to. When I couldn't find the answers I needed recently, I called them. These poor souls fumbled through the same charts that had me foiled, but then it got worse. Much worse. They started reading the postal fine print. (Note to my Dear Reader: Never ever read postal fine print. It will drive you mad. Stark, raving mad!) Anyway, confusion gave way to obfuscation. But they labored valiantly onward, fighting their way through the regulations for 5 or 10 minutes until they arrived at an answer. Not THE answer, perhaps, but an answer none the same.

The journey was exhausting. For both of us. I was so relieved the search was over, I'd have accepted any answer short of my 401K balance. I tell you, there's got to be a special place in heaven for these folks who have to do this all day long.

Anyway, the Business Calculator on the Postal Explorer website lets you calculate prices for all shapes and classes of mail, both domestic and international. Simply go to pe.usps.com and then click on the Business Calculator in the upper left.

Not sure what's what? Need a dictionary to understand the inside-the-post office lingo? The site provides a navigation tool to give you definitions and links to other references. (Warning: This "easy to access" information varies from easy to not-so-much. Approach with caution.)

Not sure what you need? Calculate several rates and classes and compare the results. Simply hit the "Show History" button to have all the calculations you've just made shown in a nifty side-by-side format for easy scanning.

Not sure where the nearest post office is? Keep clicking. You'll find its street address. You'll even find its hours of operation.

So there you have it. Automation may force yet another group of postal workers into an early, well-deserved retirement. But the stress migraines we communally got from trying to ascertain the best postage rates should be a thing of the past.

And is that great or what!

What does 44 cents buy these days?

Within my memory, 44 cents has gone from buying 4 candy bars and 4 packs of gum to an itty bitty piece of paper that you lick and stick on an envelope.

While those 4 candy bars and 4 packs of gum could give a kid a day-long sugar high—and keep a dentist busily occupied cleaning up the after-effects for months!—that little stamp can send a letter across the country, in first class accommodations.

44 cents to write your Mom whether she lives across the street—or across the country. What a deal! (And while I'm thinking about it—write her! She'd love to hear from you.)

But did you ever wonder how the Post Office arrived at that cost? Here's an educated guess, proffered by George Washington University MBA student Andrew Schneider after delving into USPS and Postal Regulatory Commission Reports. The big surprise is that less than half the cost is the mailing process itself (sorting and delivery). The remainder covers USPS general overhead. Almost.

Sorting/labor	10 cents
Delivery labor	7 cents
Facility & vehicle maintenance	2 cents
Fuel & transportation	1 cent
Buildings, equipment, vehicles	2 cents
Retiree pension & health costs	2 cents
Misc. Expenses/first class mail	8 cents
Corporate overhead	16 cents
Cost to the USPS	48 cents
Cost to Consumer	44 cents!

That means every letter you mail to your Mom costs the USPS 4 cents. Now multiply your 4 cents by the billions of first class letters the USPS mailed last year. No wonder the USPS has the low down dirty fiscal blues!

The USPS is subsidizing your mail. And what do you do? You whine about paying 44 cents! In most countries around the world 44 cents would look like the bargain of the century. Even better for you ingrates, the USPS isn't raising the cost of the hard-working First Class stamp in the pending postal increase.

So write your Mom more often.

Remember: It's only 44 cents. It's a sweet deal.

And it won't rot your teeth.

Postal Rates Going up. But not for everyone. And then, not by much. Usually.

Unless you've had your head in the sand for the last decade, you know that the post office has been hemorrhaging money. Despite aggressively cutting jobs, closing facilities and taking draconian measures to staunch the flow, the loss continued in 2010, with the USPS losing $8.5 billion. (That's Billion with a "B"! dear reader.)

Desperate to reverse the trend, but hamstrung by legislation that mandates the USPS can not ask for increases in excess of inflation year over year, the USPS has proposed a very modest rate change that will increase postage 1.7% in a blended average over all mail classes. The increase, which goes into effect in April, will generate only about $340 million in 2011 to fill the deep hole that the USPS is in. But every little bit helps.

The really good news for mailers is that most will see minimal—if any—changes.

For instance, 4.25x6 postcard rates will rise by a penny, to 29 cents. First Class Presort rates for postcards will also rise, but only by fractions of a cent. And by "fractions of a cent" I mean one or two tenths of a cent.

Carrier Route saturation rates remain virtually unchanged—except for the same fraction-of-a-cent increases for DBMC deliveries, and at less dense delivery models.

Non-Profit and Standard mail will similarly remain virtually changed except in the fraction-of-a-cent category for less dense delivery models.

Periodicals—a target of recent huge rate hikes—will see only a 1.8% increase this time.

First class letters will remain at 44 cents. But for "overweight" letters, the additional ounce will go to 20 cents—one of the heftiest increases at almost 18%.

Other big increases will be First-Class flats which will increase by 5.3%, and first-class parcels which will see a 3.8% increase. First-Class international mail will also increase by 4%, and some parcels will see a whopping 11.3% increase.

So here's the bottom line: while there is a postal increase in the offing, the news is hardly doom-and-gloom for most of us. We should all be grateful for small (1.7%) favors.

Dear Upset Customer

I know that this is your first time mailing, so I’m going to cut you a bit of slack.

Yes, I agree that the USPS rules and regulations are about as complicated as a schematic to build the space shuttle.

You’re right. There is no Do-It-Yourself Heath Kit solution for direct mail, despite what the overly optimistic USPS publications promise.

And yes, I appreciate that you hired us to help you work your way through those byzantine rules. So let me explain exactly why your mailing cost more than the quote we gave you.

For starters, your hair was on fire when your secretary contacted us. She explained you had to get your mail out fast! No problem. We can handle it. We do “fast” every day.

She said you wanted to mail 4.25x6” postcards. That’s OK by us.

She said you would print and provide the cards to us. And you wanted to mail at First Class (I talked her into First Class Presort, thus saving you about 7 cents each in postage, remember?)

She said your list was regional, and for us to please provide you with a quote based on those premises. “Then I’ll turn you over to my boss,” she concluded sweetly.

It looked like it was coming to together well. 4.25x6” is a perfect size to mail at First Class Presort. It’s a post office pricing sweet spot. Your job looked like a cream puff, a walk-in-the-park.

And then the wheels started to fall off your wagon.

You and I “met” by email, but never spoke. That’s a problem, but I won’t dwell on your invisible cloaking device here. Despite my inability to reach you by phone so we could clear everything up in 5 minutes, we exchanged emails for 2 days about indicias, wording, positioning, barcode clear zones and other postal related things. Eventually I thought we had everything squared away.

On Tuesday your cards arrived. They were nicely designed and beautifully printed. But they were 6x8", not 4.25x6".

“No big deal” you explained.  “I decided we wanted to make a bigger impression on the receivers.”

Sorry. It was a big deal. While I agree 100% with your decision to upsize from a marketing perspective (and would urge any of my clients to do the same thing) changing the size changed the postal rates—and your quote—totally.

Instead of 20.9 cents postage per card, your rate was going to be 33.5 cents a card.

“That’s over my budget!” you yelped. (Now you could pick up the phone and call me!) “What can you do?”

“Mail at Standard rate,” I countered. “Your postage will be about 23.3 cents each. It will take longer to be delivered, but you’ll be back in the budget range. Of course we’ll need to X-out the wrong language on the indicia and overprint with the right language, but this is do-able.”

First crisis averted, but the second was approaching fast.

Your data arrived. As per our arrangement, we cleaned it, NCOA’d it, presorted it and were preparing to address your cards when you realized you had sent the wrong data. You sent the data three times before you got it right. And then you asked us to merge/purge the various files against each other to be sure you hadn’t sent any duplicates.

At the end of the day, your regional list was national. Surprise!

“Bad news,” we told you again. “Your data is national, not regional. As a result, your postage is nearly 28 cents each. You lost the address density that the USPS rewards with lower pricing.”

Oh, yes. Another itsy bitsy point: your data was 7,000 records; we had quoted on 5,000. And you question why you were over budget?

You were backed into a corner. Your hair was still on fire; the event you were promoting was now less than a week away. There were no options. You sucked it up; we mailed your job.

Now you’ve come to me (by email, naturally) to ask me how to do your job better next time.

Here are five suggestions I’d humbly proffer for your kind consideration:

1. Know your data. That’s the #1 thing that can make postage and production estimates go bad. Since you didn’t know if it was regional or national—and you didn’t even know the count—it led to several huge miscalculations.
2. Realize that a postage estimate is an estimate. Until the data goes through data processing, we can only provide you with an estimate. Of course, if you tell us one thing and it proves to be another, then all bets are off. Oops!
3. Assign one person to handle the job. In time, this person will become knowledgeable about USPS rules and regulations. Once he/she knows the rules, the budget-busting misunderstandings will decrease enormously.
4. Don’t change your package without checking for unintended consequences. An innocent change can be costly. As you found out.
5. Find a reliable direct mail provider partner to work with you. Then follow their instructions. Don’t go rogue. The USPS punishes rogues.

Thank you for giving us the opportunity to educate you about the US Postal System. We’re sorry that your education was painful. But that which doesn’t kill you makes you stronger.

Or so they say.

When No News is Good News

Sometimes no news is good news. And this is one of those times.  Maybe.

But first, the background, for those who need a refresher.  Several years ago the Post Office agreed to a plan that would tie postal rate increases to the Consumer Price Index or CPI.  The plan was that on January 20th  of each year, the GAO would announce how much the CPI had risen over the previous 12 months;  the USPS would see a rate increase of an equal amount five months later.

That was the plan.  It was simple, understandable, and roundly accepted as a rational approach to allow the post office to increase fees reasonably and predictably.

Then came the Great Recession, lower mail volumes, higher postal worker pension fund payments due and—amazingly enough—the CPI retracted 3.4%.

This was unprecedented.  The CPI had never gone backwards before. No one knew what to do.

Like deer in the headlights, brilliant minds froze at the prospect.  The USPS couldn’t reduce postal rates.  The USPS was, after losing huge money quarter after quarter.  But they couldn’t raise rates either; the CPI-based formula wouldn’t allow it.

What was the USPS to do?

Turning confusion into confrontation, the Post Office sought a rate increase—a hefty 5.6% rate increase—and they wanted it not in May but in January, advancing the date by more than 5 months.

Citing escalating losses, USPS management went to the Postal Regulatory Commission (PRC) and asked—nay, begged—for a rate increase, citing “exceptional [exigent] circumstances.”


The PRC didn’t see things exactly that way.  Instead, the PRC soundly rejected the USPS’s plea, writing that “The Commission finds that the Postal Service has shown the recent recession to be an exigent [extraordinary] circumstance, but it has failed both to quantify the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mail volume.  Therefore we unanimously deny its exigent rate request.”

While the PRC acknowledged there was a recession, and recognized that it had likely had an impact on the Postal System, the PRC had no option but to deny the rate increase because the USPS did not give quantifiable evidence.

The USPS bean counters and legal beagles blew it.

So that’s the no news.  Postal rates will stay the same for a while longer.

It’s good for mailers; it’s not so good for the USPS.

Bye, Bye Round Stamps: An elegy

Round stamps—the time-honored Post Office “seal of performance”—are gone. Kaput. Defunct. History.

Until recently, a postal clerk solemnly stamped the postal paperwork mailers presented to him when a mailing had successfully weathered the mail acceptance process. Then he handed the USPS drop slip with the official seal of approval to the driver.

Without the round stamp, the driver knew he had better not come back to the shop. You see, the red round stamp confirmed the job count was right, the postage was right, and the authority over that mailing had passed from the mailer to the USPS.

The red round stamp was a mailer’s proof of delivery. Proof of accuracy. Proof of performance. It was everything.

And now the ceremonial stamping is gone. The “amen” is missing at the end of the postal psalm. The punctuation mark at the end of the sentence has gone AWOL. The postal clerk is like a Samurai stripped of his sword. Something important is missing.

Its absence leaves old timers like me feeling a little melancholy.

It will take a bit of getting used to, but a computer-generated form has replaced the red round stamp ceremony. Unlike the round stamp, this form is soulless.

I suppose the USPS will save thousands of man hours each year by eliminating that final flourish. I’m sure the USPS will save thousands of dollars in replacement rubber stamps and ink. But without that red round stamp, it just doesn’t feel complete. It lacks authority. It feels clout-less.

Ah well. Time marches on. Another time-honored ceremony is consigned to the dustbin of history.

Progress is in the eye of the beholder.

USPS HITS A HOME RUN: Outside-the-box website is a winner

The folks at the Post Office have asked me to say something nice about them for a change. So I’ve found an underreported USPS program that is so good, it’s a slow pitch right over home plate. A gimme.

First, the pre-game warm-up. There have always been people who prey on others. The internet has simply made it easier for the bad guys to grow their business; they can now approach thousands of people simultaneously.

On the other hand, professional standards for bad guys are declining. They don’t have to be skilled liars or actors anymore as everything is transacted at long-distance and anonymously. They don’t even have to be passable spellers! Any doofus can get in the act today. Fagin must be spinning in his grave.

Rules? You gotta be kidding. There are no rules when you deal with these guys. They know that a fool is born every second, (yes, everything is speeding up today), so it’s simply a matter of numbers. When they send out millions of spurious offers they know that some sucker will bite.

Got it? Let the games begin.

Identity theft by cyber thief is the fastest growing crime in the US, which—if you’ve seen the way people drive on the Beltway—amazingly surpasses even road rage.

The methods the bad guys use to extract personal information are myriad and ingenious. Consider my emails from just last week. I won the lottery in 15 countries; well-heeled relatives who have left me vast amounts money are keeling over at an alarming rate; “Reverend Bob” has asked me to print flyers and then ship them to an orphanage in Amsterdam (there are no printers in Europe?); banks and credit cards that I don’t even use have kindly alerted me to serious problems in long-forgotten accounts (more senior moments?); and dozens of exotic Russian hotties lust after me (I wonder if my husband knows!).

I’ve been invited to earn my doctorate on line without having to open a book at least 10 times (learning by osmosis?); and if earning a doctorate isn’t my thing, then photography school (snicker) might be. My credit score is changing on an almost-hourly basis; and a long-lost cousin is stuck overseas and needs me to wire some funds so she can get home again.

The one thing that all these opportunities have in common is I have to give my bank account information to start the transaction. The bad guys are betting on my greed, lust, fear or other baser instinct to trump common sense.

The bad guys are PhDs of the dark side, although occasionally they work the sunny side of the street, too when they depend on my curiosity (my changing credit score) or compassion (my stranded cousin) to elicit my response. It’s just human nature, after all.

But now here’s the game-changer. The USPS and the USPS Postal Inspection Service have stepped up the plate. They, together with federal, state and local government agencies and consumer protection groups, have launched the web site www.deliveringtrust.com.

A nicely packaged site, it is easy for the prey (that’s you and me) to see how the Top 10 scams work. You can watch a video or download the script (a good place for parental “talking points” to begin). And while Kevin Spacey and Meryl Streep won’t fear for their jobs, the actors get the point across. Best yet for a government site, it is occasionally amusing.

A minor quibble: the test, ostensibly for children, is probably over the heads of all but the junior Mensa crowd. It’s still a good place for parents to start talking to the kids, though, and I bet that many parents will learn something from taking it, too.

OK, USPS. You hit a home run with this one.

Now please tell me how to stop their barrage of e-mails.

Dear Misguided Customer...

Dear Misguided Customer,

I know times are tough and resources are scarce. Yes, I realize that everyone is trying to come up with ideas to pinch pennies and save money.

But some ideas are just plain bad ideas.

Yes, I know that God helps those who help themselves. I’m sure the Bible and Ben Franklin would agree. Self-sufficiency is a good thing.

Yes, I know that for years your organization has used volunteers to fold, insert, seal and stamp your appeals and newsletters. So what if the news is stale by the time it gets to its destination? Your volunteers get a sense of connecting with your organization and doing something good for their community. Tradition is a good thing.

Up to a point.

Continuing to do something the “way we’ve always done it” those are your exact words!—without questioning if that way works any more isn’t just bad, it’s plain stupid.

Yes, I know you’re the newbie on staff. You don’t want to shake things up or jeopardize the job it took you 8 months to find. I got that. But blind adherence to “Tradition” is costing your organization cold, hard cash—money that could be put into services.

I bet your boss would love to simplify her life, get newsletters and appeals out faster…and save the cost of your salary in the bargain. The only thing standing in your way is “Tradition.” Show her what I’m going to show you, you will be her hero on the white horse. And that’s a lock-tight guarantee.

Hang on. Here we go…

I betcha that years ago, when a newsletter or appeal was ready to mail, someone—probably your predecessor—called for all hands on deck from the office staff. But that got old really old fast. Maybe the task built staff esprit de corps, but when assigned duties weren’t getting done, there was a lot of bad juju.

So your predecessor put out the plea for volunteers, and volunteers—God Bless ‘em—responded. For years that cadre of loyal ladies folded and stuffed, licked and sticked their way through countless thousands of envelopes.

It takes 3 weeks to get out each newsletter, but it costs your organization nothing. Right? Let’s think about it.

You have to feed the ladies milk and cookies, and you have to keep supervisory staff on hand “just in case.” But that is minimal. Right?

You have to keep recruiting volunteers, which is a constant hassle, but…

Then once a year you have to throw a big “Volunteer Appreciation Gala.” While that gala costs a lot of money, and takes a bunch of staff time to coordinate, it is the price you have to pay to compensate your volunteers.

Your organization is stuck in the past, my Friend, in “Old Think.”

Here are the facts:

1. It takes 3 weeks to assemble, address, wafer seal and mail 10,000 newsletters. The “news” in the newsletters is old by the time it hits the mail. In this day of instantaneous news, stale stuff is poison. That’s an obvious image problem for you. It makes you seem out of touch. Fuddy Duddy. No wonder new volunteers are scarce.

2. Because your appeals aren’t unique to each donor, the likelihood is that you are as asking donors who could give $100 to give $10—your “default” ask. This screams out for better data management and personalization. It’s costing your organization big moola.

If points 1 and 2 address squishy unquantifiables, here is what Blind Tradition is costing in cold, hard cash:

3. It takes a staffer 4 hours every night to supervise the volunteer crew. If that person makes $20 an hour, you’re spending $80 a night to get “Free” labor. $20,800 a year.

4. Volunteer victuals are another $20 per night. That’s $100 a week. $5200 a year.

5. What does the Volunteer Appreciation Gala and extra wear and tear on your facility cost? I can’t even hazard a guess.

Discounting the Gala, you're at $26,000 a year in expenses to compensate your “free” volunteer labor force. Not enough to convince you to rethink Old Think Tradition? Try this:

6. You’re paying 17.9 cents each in postage per newsletter. It’s better than paying First Class, but as a non-profit you should be paying about 13.2 cents! That means you’re paying an extra 4.7 cents per piece in postage because you lack the basic mailing technology that the USPS requires.

Every month your 10,000 newsletters are contributing $470 unnecessary postage to the USPS. That’s another $5640 a year.

See how you're paying your -- salary $ 31,640 -- a year in unnecessary costs? That’s a lot of money any day, but in this economy that’s an enormous waste.

Yes, waste. Stupid waste.

And it gets worse.

7. You know that many the addresses you’re mailing to are wrong and many of the people have moved. But you don’t know which are wrong, and you don’t know how to fix your list. So you keep mailing to them. Yet every one of these badly addressed pieces is costing you money: Money to print. Money to mail.

If you have money to burn—and I know you don’t—then keep on using your Old Think Traditional ways.

The solution is obvious: move your direct mail marketing into the 21st Century by working with a professional direct marketing firm.

Work with them to clean up your list. Correct bad addresses. Get rid of deadwood. Run your data against NCOA—National Change of Address software. Cost: $50-100 plus any data clean up effort.

Now turn your mailings over to that mailing professional. Your postage will plummet and you’ll be in the mail lickety split.

Cost: Roughly $500 to process your 10,000 newsletters.

Production time: 2 days

Bottom line: 2 days versus 3 weeks. Best yet, the postage you’ll save pays for the mailshop. Not bad, eh? But there’s more: because your mail will have barcodes, it will arrive faster and in better condition.

You’ll see some cost increases in your appeals, but the extra effort to personalize letters and responses will bring in far more money than the cost of the personalization.

Don't know where to turn? Call me. I'll give you recommendations.

Don’t believe me? One of our nonprofit clients brought in 35% more than they had ever raised before just by personalizing the letter and the ask. Another raised increased its average gift to almost $90 simply by upgrading ask amounts!

It isn’t magic. It’s marketing. It’s using modern mail technology to replace outmoded though well-meaning volunteers.

Now don’t get me wrong. I’m not anti-volunteer. In fact, I’m strongly pro-volunteer. I just believe in using volunteers in ways that make sense for both the volunteers and the organization and the community.

There are, after all, things that a machine just can’t do. Like being human: Manning hot lines…consoling crime victims…counseling rape victims…hugging and clothing the newly homeless…feeding the hungry…providing hope and stability for those who need it the most.

Tradition is good up to a point. And you reached that tipping point some time ago.

It’s time to put your uniquely wonderful volunteers to work doing the work they can best do: serving the community your non-profit was commissioned to serve.

Self-sufficiency is fine.

Being a hero is even better.

Get what you pay for

The third rule of economics is simple: You get what you pay for. It’s been an immutable economic fact of nature. Until now. In a blink of an eye, technology took over and the rule changed.

TV has Tivo. Consumers can avoid those pesky commercials with a click of the button. That 30-minute show turns into a commercial-free 22 minutes just like that! 8 minutes saved! I love my Tivo. Of course, those commercials paid for that programming, but what the heck?!

OK, someone has to be watching the commercials that keep my shows on the air. But it isn’t me. Not any more.

Newspapers and Magazines are also seeing dramatically dwindling ad sales. The lucky ones find buyers or mergers. The less lucky ones go the way of the late lamented Gourmet.

The inventive survivors look for alternative income streams like paid on-line subscriptions (not gaining much traction yet) or ads (annoying, but necessary) or pay-for-special-features promotions (too early to tell).

In an act of solidarity with those who produce the written word, I send magazine subscriptions to family and friends at the holidays. I’m not sure my tiny “Atta Boy” is worth much in the great scheme of things financially to the publishers, but it makes me feel better about canceling my daily newspaper subscription two years ago.

You see, I couldn’t read the paper during my daily commute-by-car, and the ever-growing pile of newspaper carcasses impeded anyone from sitting in my passenger seat. So now I read the paper on the internet at lunch. For Free! A world-class newspaper for Free! It’s one of life’s real bargains. Thank goodness for the advertisers and readers who keep it afloat for me every day. I love you guys!

The internet—the technological instrument of destruction for thousands of magazines and newspapers—didn’t get it at first either. Obtrusive pop-up ads alienated viewers, then pay-for-click evolved. But this is still TBD, and the technology is evolving daily—just ask the SEO guys who are always scrambling to keep up. Do I do my part to underwrite this world-changing media? Probably not. My husband is doing more than enough. I’ll sit this one out, too.

My favorite NPR and PBS stations, realizing that they can get on board or get run over, are broadcasting on the internet, sending shows to anyone anywhere with a computer. They also podcast, webcast, simulcast and recast. And yes, hosts are on FaceBook and Twitter, too. Twice a year they ask for a donation which I am happy to fork over. I’d pay for those real-time traffic alerts, even without the extraordinary content.

So, like most of us, I pay for the media I most value, and hope someone else will pick up the bill for the other guys. With my Tivo I can watch TV and skip the commercials. With my internet connection I can read the newspaper I once subscribed to and ignore the ads that pay for it. I can listen to my NPR and PBS stations with no cash outlay should I choose to do so. It is obvious to me that technology is rewriting the third law of economics. Today, I can get what I don’t pay for.

What is less obvious is that mail is a medium, too—like TV, newspapers, radio, internet. Way before Al Gore thought of the internet, Ben Franklin was putting the post office together. Hence, direct marketing is one of the oldest media around, and is so institutionalized it is easy to overlook. But very time I put a stamp on a letter I’m helping to pay for it.

Direct Mail has been hammered by time and technology, too. Email has almost wiped out whole classes of Mail. The escalating cost of postage is a significant damper in its own right. But now comes “Do Not Mail” legislation—ostensibly a “green” movement upset over destruction of trees.

I’m probably the greenest person you’ll meet today, but I think this legislation, though well intended, is in fact destructive.

Recently Postmaster General John Potter took on proponents of “Do Not Mail” legislation, citing that advertising mail helps fund the USPS.

“Somehow, they think a sale offer coming through the mail—as opposed to a newspaper, a magazine, TV, radio or the Internet—is a bad thing” he said at the National Press Club. “Ads pay for the Internet as well as broadcast TV and radio programs. So, too, ad mail helps pay for universal mail service in America.”

That’s right: DNM threatens universal mail service.

Most of us love—and expect—universal mail service. It’s our right to get mail, even if it’s an envelope from ValPak chock-a-block with ads from maid services, tree surgeons and power washers. That blue envelope helps buoy up the US Postal system in a way that the monthly bill from the cable provider who rents me the Tivo can’t.

The volume of the advertising mail helps keep USPS numbers high. Ad mail doesn’t have to be delivered at a breakneck pace, giving the USPS opportunity to plan distribution and maximize delivery efficiencies. Hence, robust advertising mail numbers are vital to USPS financial health.

But mail volume is down by about 28 billion pieces in FY 2009—driven down by postage, by the internet, by the economy, by dire doom-and-gloom forecasts, by home foreclosures, and by a series of sequential well-reported economic disasters and expensive bailbouts. So despite slashing 40,000 jobs and trimming $6 billion from its costs this year, the USPS lost $3 billion.

Everyone knows the USPS can’t lose money like this forever. But everyone also expects to dependably receive mail. That’s what universal mail service is all about. It’s a given. Like the third rule of economics.

But today technology is voiding the third rule of economics. DNM could nix universal mail service just as effectively.