More importantly, everyone needs to realize the problems and challenges facing the U.S. Postal Service aren't going to get better any time soon, and it's going to continue to have a negative impact on your businesses. It's not just this one event, but rather the future course and direction of one of our largest “partners” that concerns me. Consider the following:
- The USPS lost $2.8 billion last year.
- For 2009, the projected loss is estimated to be “$6 billion or more,” according to the postmaster general.
- The postmaster general also predicts that 2009 will be the first year since 1946 that the amount of money collected by the USPS declines.
- Total mail volume in 2008 was 202 billion pieces, 9 billion less than the year before and the single largest annual drop in USPS history.
- There's a huge pension fund contribution liability outstanding … the amount and state of which seem to change with the political winds of the day. (In all likelihood, the guy or gal who delivers your mail will have a better pension than you do.)
- Postal rates are expected to increase again, this year by 4 percent to 5 percent. That's after the punitive rate increase of 2007.
I'm not an expert reader of tea leaves, but as a businessman, this isn't a “partner” I'd want. Problem is, you can’t live without the USPS. The only prudent course of action is to try and manage the negative impact on your business. Here's 11 tips to help you make the most of your relationship with the USPS:
- Believe that your postage will continue to increase at rates well above inflation; make sure you budget for it. Also, operate under the assumption that one day a week of service will be cut — and it may be Tuesday (the worst choice for B-to-B catalogers).
- Continue testing new mail formats that are cheaper than mailing a full-line catalog.
- Carefully test reducing frequency to your repeat online buyers.
- Invest in search engine optimization and pay per click to acquire new customers online. This will allow you to reduce your prospect mailings.
- Test alternative media — whatever makes sense for your product category or market segment. Find new ways of acquiring customers.
- Rethink industry trade shows as sources of new customers.
- Beef up your personalized e-mail capability. E-mail needs to relieve some of your dependency on customer mailings.
- Improve your Web site. The better it is, the more your buyers will use it, like it and come back to it, reducing their dependency on mailings.
- Convert your smaller customers to credit card payments and your larger ones to electronic payment systems. Mailed checks are no longer an efficient form of payment.
- Examine similar businesses around the world, particularly Europe, to see what they're doing. Postal rates in Europe are much higher than the U.S., so they've been dealing with this problem for some time. You may find some innovative ideas that might work for you.
- Join the American Catalog Mailers Association. In numbers we have a voice and can slow the progression of postal rate increases, and lobby for relief (a bailout maybe?) from the pension fund liabilities.
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at email@example.com or (954) 383-5221 (direct line).
Comments or questions are welcome.