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.

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.

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.