Culture, direct mail, Economics, Government, Marketing, USPS

USPS: Hidden Good Fortunes

Every quarter the USPS publishes their Revenues, Pieces and Weights Report. For the numerical savants out there, this is a feast of numbers beyond one sitting, for sure.

But the big story is, the USPS continues to perform in a stellar fashion, despite the ravaging onset of online displacement of hard copy as we know it.

If you think the post office is in trouble? Have another think.

Q3 YTD Results–9 Months Only
~The bad news– and what is publicly perceived, First Class revenues have fallen from $22.7 billion in 2013 to $19.9 in 2018. (off $2.7B or -12%).

~In the same 5 years, Magazines and Periodicals dropped from $1.3 billion to $984 million. (off $276M or -22%)

These two categories accounted for a $3 billion shortfall in revenue.

~Direct Mail, which includes catalogs, has ceded $294 million over the past 5 years. (off -2%) to $12.5 billion in the first three quarters of fiscal 2018.

Now for the good news.

In 2018, competitive Parcel and Package delivery has grown from $9.8 billion in 2013 to $16.9 billion. That’s a $7.1 billion growth, or 73%!

So we can certainly see how internet and digital media have blasted the legacy paper and ink communications business to smithereens.

What we did not see however was that online commerce has grown so rapidly that the USPS has found its newest niche: order delivery.

Year to date, 9 months, FY 2018, the USPS has delivered 4.2 billion pieces. Compare that to 2.3 billion, 5 years ago.

The USPS has another interesting report available, entitled Public Cost and Revenue Analysis, Fiscal Year 2017.

I like this report because it tells you how well it covers its costs of operation.  For instance, First Class Mail has a cost coverage of 210%.  Basically, its revenues are double its costs.

Direct Mail cost coverage is 153%.  Magazines and Periodicals, only 69%.  But the Package and Parcel delivery business, in the competitive markets, cost coverage is 155%.

Overall revenues for 9 months are $53.8 billion, up 5% from $51.2B 5 years ago.

These numbers indicate the ebb and flow of the door-to-door, pick-up-and-delivery business, and how the USPS is responding to America’s choices in communications.  True, the numbers do not account for front office costs, and legacy benefit and pension challenges, where there is a different story to tell.

But for making their daily appointed rounds, no one does it better than the USPS.

 

Thanks for reading!  If you would like to see these reports for yourself, have at it!

Click here: Fiscal year 2018 Q3 Revenues Pieces and Weights

and here: Public Cost and Revenue Analysis 2017

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direct mail, Marketing, USPS

Direct Mail Design: This Never Gets Old

Did you know that the USPS Office of the Inspector General performs a customer satisfaction survey every year? News to me, but why not?

The results are available for viewing below.

But the stunning and head-spinning discovery about direct mail design is worth noting. In the study’s own words, verbatim:

“In FY 2016, it sent out more than 5.7 million survey invitations in the form of a two-sided postcard that invites customers to take the survey online or by phone. These invitations resulted in approximately 71,000 completed surveys, a 1% response rate.

“In order to increase response rates, the Postal Service tested two other survey invitations. An oversized postcard did not make a significant difference, but a sealed envelope with an invitation on letterhead had a 7% response rate.

“Consequently, the Postal Service adopted the sealed envelope for all invitations for FY 2018.”

A 600% increase in response!

There are two big rules of direct mail design:

1. It takes A Letter.
2. Put it in an envelope.

As for the survey, it is itself a pot-boiler and you can “self-administer” online, or participate by phone. If you are the social scientist, you know that a 50% response rate is the minimum acceptable for self-administered surveys, because who knows that the respondents don’t drop off, or conversely, have an axe to grind, or perversely, come from Chicago and complete several forms.

All results can be read here, but first and foremost, remember the two rules above.

Glad the Inspector has come on board!

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Culture, direct mail, Marketing

Feel-Felt-Found

A Tough Customer?

Have you ever found yourself searching for the right way to win over a person who resists an idea?  You know you are right, but you don’t need to pound the table to prove it.  I recalled this tactic from years ago in the infancy of my sales career.  It works.

I decided to include Feel-Felt-Found in my book Many Happy Returns, which is all about writing and designing good direct mail.  Feel-felt-found is an excellent tool for a testimonial, and even an opening statement.   It can be a third party insert to disarm the most resistant buyers of their reservations.

‘Feel-felt-found’ is a logical progression that brings a reader around to a positive point of view. The seller is identifying with the potential buyer: “Look, I know how you feel…” and continues to list the potential negatives of the offer. This concession aligns the buyer and seller on the same side of the issue.

Continuing, “I felt the same way myself…” describes the suspicions and reservations in some detail. And then turns the tables, “But here is what I found…” and concludes by cashing the objections for a happy discovery that it’s a good deal after all.

He delivers perfectly.

Tom Selleck, best known for his convincing portrayal of the gruff, conservative, New York Police Commissioner on CBS “Bluebloods”, delivers a perfect ‘feel-felt-found’ for American Advisors Group which markets reverse mortgages for seniors.

He sticks close to script:

“I know what you’re thinking. I thought what you thought. Some things are just too good to be true. Just like you, I thought that reverse mortgages had to have some kinda catch –just a way for banks to get your house…right?
Well then I did some homework and I found out that it’s not any of that – it’s not another way for the bank to get your house and it’s also not too good to be true!

The script continues to explain the financing procedures and the benefits. Selleck concludes:

“I know what you were thinking – I did too. I felt the same way. But I checked it out and I found out a lot more. It’s pretty simple, a reverse mortgage from AAG can give you the retirement stability you’re looking for. Maybe you want to check it out.”

The script goes on to offer a free brochure and video for interested viewers.

‘Feel-felt-found’ is a powerful sales tool and delivered in the voice of a satisfied customer, or a company employee, makes a great testimonial for the reader to re-assess an offer.

I hope you liked this.  I have never used this blog for promotion, but in this case, I felt compelled.  It’s part of a life story, so I included it.  There’s plenty more for direct marketers who are on a quest for success.  You will find uniquely helpful clues in Many Happy Returns–Rules, Reckonings and Tales Told From The Mailbox.  It’s available now!

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direct mail, Fundraising, Marketing

Beans, Trees, Socks, Calculators: All Into The Funnel

DAV has granted me membership to the Commanders Club.

The fundamental logic of customer acquisition mail is like starting my snowblower this morning. Gas up, pull out the choke, prime the cylinder and yank the cord. After a moment’s belch of smoke, I can turn off the choke, and the machine settles into a nice, steady RPM.

In direct mail, the sales funnel is a similar process: first overwhelm your prospect, at some expense, then convert them to a repeat with a follow up, and then funnel them into a steady revenue stream.

So I have kept track of my personal response funnel with a few regulars.

Arbor Day will reforest my yard, many times over.

Arbor Day
They are looking for a conversion. Last time I wrote, I reported to you that I had giddily responded to their acquisition piece, ordering 10 spruce trees, and 2 lilacs, with the hope of getting a year’s supply of coffee beans. Well, the coffee beans got me, but I didn’t get them. However, I did get a follow-up mailing, profusely thanking me for the spruce and lilac order. In this mailing they furnish a colorful mail order tree catalog, a newsletter, member card and a free red maple tree with my order.
The tree is 3-4 feet high.
I haven’t the heart to explain I have 17 trees on the lot now. I am still wondering where to put the spruces and lilacs.

Paralyzed Vets sees me bagging my groceries at attention.

Paralyzed Veterans of America
This should be a win back. I haven’t responded to them in the last few years, so they are gracing me with a patriotic tote bag. Actually, they have forgotten who I am, or was, and are introducing themselves. This is a gap in their database. The tote is enclosed, shrink-wrapped.

American Legion’s zip strip. A lesson here: it tears best when with, not across the grain of the paper envelope.

American Legion
This is a win back, delivered as a questionnaire. It comes in a large orange flat, 10″ x 13″, opens with a ‘zip strip’ and presents a set of rhetorical opinion questions which are, as designed, hard to say ‘no’ to. I haven’t given to the Legion in a couple of years. The labels they offer as a freemium unfortunately misspell my name.

A modest, business-like presentation from the VFW. The solar calculator works to 7 decimal places.

Veterans of Foreign Wars
This is a conversion kit, and I am flattered that they have already made me a Gold Circle member. I don’t think I quite deserve that. However, they do, and have sent me a 12″ x 14-1/2″ flat containing a monogrammed desktop calculator, pen and notepad. The calculator works, and my traditional test is ‘PI‘, 22/7 = 3.1428571 which goes to the 7th decimal place. With PI, that’s far enough. They optimistically ask our mailman to deliver to our front door. Good luck with that!

DVNA equips my office with everything but a lawyer.

Disabled Veterans National Foundation
This 12″ x 14-1/2″ faux kraft flat is like a postal trunk sale. It is an acquisition piece. Inside I get the motherlode: a pocket calculator in its own wallet–goes to the 7th decimal place– two pens, a monogrammed 15 month calendar, with silver-edged pages, three greeting cards and envelopes, and a check made out to me drawn on the Bank of America for $2.50. I am verklempt.

DAV’s renewal kit bespeaks lower cost. They have me now.

Disabled American Veterans
This is a renewal notice to the DAV’s Commanders Club. A kraft #9 stuffed with a member card, a small note pad, some tastefully designed stickers, a prayer card, and a certificate stating I am an Illinois Silver member. The preferred ‘ask’ is $50. This kit is confidently on cruise control.

Father Flanagan’s “Acknowledgement”: I envision Spencer Tracy suggesting I try a little harder.

Father Flanagan’s Boys Home “Boystown”
This 8-1/2″ x 12″ kit is as thick as a breadboard. It is not an acquisition piece, because I am a repeat donor, so I put it up to their attempts to get a bigger gift from me, like $60. They send along a wall calendar of the cosiest Sam Trimm bird paintings I have ever witnessed, plus a 30-page puzzle book–21 games, answers on the back page–, a pocket calendar, a one-page, at-a-glance calendar, a 16-page daily planner, a Certificate of Acknowledgement–which I don’t want to over analyze, but I think it really means ‘you can do better’– a second 2018 calendar, with a personalized street sign, two sheets of address stickers, and of course, a letter displaying some gift certificates worth $60 that I should fund.

My Aunt Betty would have liked these.

Father Flanagan..Again
I did not respond quickly enough to the kit above, so Father Flanagan sent me a 6 x 9 reminder stuffed with blank greeting cards. I should point out to the folks at Boystown that these cards are pretty close to what my sadly belated great aunt would have mailed upon occasion, rest her soul. They have hearts, flowers, birds, and butterflies. Again, I should not over-think this, but it’s possible Father F believes I am my aunt.

Lakota designed hosiery. We all need socks.

St Joseph’s Indian School
I have difficulty thinking I am not a “renewal” with these folks. But darn it, they are still working me up with a shiny, red-foiled, hard sell on a ‘triple-up’ mailing. An anonymous benefactor will triple my gift. They would like $25 which will balloon to $75. While this is reminiscent of the stock market, up until last Monday, I am even more impressed by the very snazzy pair of socks which they have included for me. Many may have lost their shirt on the Dow Jones this week, but by golly, I have my socks.

I have to return to snow blowing.  My feet are warm.

Thanks for reading!  If you are interested in these organizations, especially their financial efficiency and clarity, you can check them out at Charity Navigator, Give.org or at their website:

Arbor Day, The American Legion, Disabled American Veterans, Veterans of Foreign wars, Disabled Veterans National Foundation, Father Flanagan’s, St. Joseph’s Indian School.

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Culture, direct mail, Environment, Government, Marketing

Don’t Leave The Lights On

Got a light?

Just a few days ago we received a handy tool from ComEd, our power supplier. We have a light bulb guide.

ComEd’s 3 steps to lighting your home.

What seems like 10 years back, somebody governmental decided unilaterally that we should do away with those high-energy-consuming incandescent bulbs which we have been using since Edison. No longer would we squint in the warm glow of a 60-watt bulb while reading the newspaper.

This was because someone, probably in Shanghai Xiangshan, thought we were better off screwing mini-helical fluorescent bulbs into our light sockets. Touted as energy-saving devices, the ‘cool light’ replacements would use less electricity, and last 5 times longer. Incandescents all but left the market, unless you looked in an old variety store off a back road.

So we were prodded into changing out all the old bulbs.

The bright idea: mercury infused fluorescence!

Once all the houses in America were transitioned over to the helix models, then the mercury sleuths woke up, and said we could not dispose of the bulbs. Because after all, they do burn out eventually, and to my disappointment, faster than claimed. But who’s going to China to file a complaint?

Terrific!

So now the incandescents have returned, like swallows to Capistrano.

From watts to lumens. At the speed of light.

But at the same time, another Edison protege has risen, to suggest disposing again of all incandescents in favor of LED bulbs.  The light-emitting-diode bulbs are very efficient indeed.  Not only do they use less power, but they are also blindingly brilliant.

ComEd has taken the initiative in nudging the switch along by mailing us a helpful little card.  On one side, it converts incandescent strengths to LED, which is like shrinking a bagel to a Cheerio.

It goes from watts… remember him? ..to lumens, which is like from energy consumed to instead, brightness delivered.

A Canadian bookmark for the 1970s, still in use today.

But before I go any further, I just want you to consider a similar transition from ancient Canadian history.  Back in 1973 the federal government, of course, decided to change from Imperial measure…remember the Queen?… to metric.   This was purportedly to rationalize and expand Canadian exports to the non-U.S. metric world of commerce.

I think the real reason was to hoodwink the car-owning public.  We shifted gas prices from 45 cents a gallon to 15 cents a liter overnight– without a shred of understanding.  To further bamboozle the public, the government then commanded that car fuel efficiency should shift from mpg, miles per gallon to… kilometers per liter?….no wait for it,  liters per 100 kilometers!

What the heck is that?

Lenticular: lighting your home, as Kelvin would like it.

Not un-coincidentally, while this huge shell game was in process, the Feds decided to start a government-owned company called Petrocan to sell us gas for our cars!  They bought up all the Sunoco stations, changed the signs, and raised the prices like great Caesar’s ghost.  We didn’t have a clue.

So back to ComEd, which so far is not a government entity.

Lord Kelvin

The other side of the ComEd lightbulb card is a lenticular lens which shows you what your home will look like using LED lighting.  It’s pretty clever, and a great device for direct mailers to use.  When you wiggle the card, it changes the brightness of the living room pictured on the card.

You have three exposures: DAYLIGHT, SOFT LIGHT and BRIGHT WHITE.  Below each setting a number tells you what the bulb’s color temperature is, in…Kelvin?…remember him?

Of course you do.  Water freezes at 32′ Fahrenheit, or 0′ Celsius, or 273Kelvin.

Anyway, we now have a card to buy the right bulbs, defined by lumens and Kelvins.

The only remaining question, how many civil servants does it take to change a light bulb?

 

Thanks for reading!  Please illuminate your friends by sharing!

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direct mail, Government, Marketing, Media, Thank You, USPS

Their Appointed Rounds

The United States Postal Service closed out their fiscal year September 30.  Never mind that the rest of the world goes by the annual calendar; the USPS wanted to beat the Christmas rush.

All in, the giant continues to perform well, within the confines of its quasi-government walls.  I wish the rest of the Federal government departments spent as much time looking after their own performance and expenses as does the USPS.

But from the latest Revenues Pieces And Weights report, here are a few glimmers of surprise and excitement.

  1.  It is a $69.6 billion dollar enterprise.  In the Fortune 500 list, it hovers around #37, bigger than Target, and smaller than Procter & Gamble, both good neighbors.  Like both of these companies, the USPS is an indicator of the USA’s pulse rate, though we will admit that it has slipped a bit.
  2. In 2017, the USPS revenues fell $1.8 billion.  We know why.  The Web, social media, email have all disenfranchised much of the USPS core business: first class mail and standard mail.
  3. First class mail continues to fall, $1.9 billion.  Compared to last year, it delivered 2.5 billion fewer pieces of mail, a drop of 4.1%.  Why? Because we receive our invoices, checks and statements electronically.  We pay electronically too.
  4. Standard Mail, now called Marketing Mail, dropped 2.6 billion pieces, about 3.2%.  Why?  Last year was a mail-infused election year.  It was distinguished by huge volumes of mail, from you know who, despite his predilection for Twitter.
  5. Overall, in its market dominant categories, that is, where it holds monopoly rights, revenues fell just over $4.0 billion.
  6. In the open competitive markets, ie., parcels and packages, revenues were UP over $2.2 billion, a 12.5% increase.  Wow! Who knew?

The Web Taketh, And It Giveth

Here’s what I find impressive about the USPS.  Despite the constant nagging of the digital futurists who want to write the Obit for the post office, it continues to hold its own.  In an environment where Internet media are running rampant, the USPS has found a broad new niche: parcel delivery, a $20 billion business.  If anyone should be worried, it will be the brick and mortar retail stores. Ask Sears.  Ask Toys R Us.  Ask Amazon.

American consumers have taken to the Web in all respects, but at day’s end, they need physical product delivery, and the USPS has risen to serving that need.  After all, they were coming by our house anyway.  Their two main competitors are UPS and Fedex, the latter using the postal carrier to make the “last mile” delivery.

Neither Rain, Nor Snow, Nor Gloom of Night…

Postal carriers are the only American entity which visit 157,000,000 addresses every day.  They delivered, all in, 149 billion items in 2017.  They lifted 24 billion pounds, or 12 million tons, of physical product: mail, checks, magazines, parcels and yes, live bees and plants. The USPS has over 500,000 career employees and another 140,000 part-timers.  While this may seem like a wildly aggressive employer, I put it to you that the postal employee actually delivers, a claim many can’t make for other government institutions.

So hats off to the USPS.  It continues to fight the currents, and with astonishingly little help from its political friends, it far surpasses its governmental cousins.

Thanks for reading! If you would like to take a look at the USPS 10-K for 2017, click here!

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direct mail, Marketing, USPS

Finally Closing The Mail Gap

Out of town, or at the office, consumers can check their mailbox.

The USPS may be experiencing the continuing shrinkage in mail volumes, especially after the election season spike of 2016. But despite the trend to digital, the folks at L’Enfant Plaza, DC 20590 have come up with a winning service, “Informed Delivery”.

Householders and businesses can receive emails daily reporting what letters have been mailed to them.

You may have thought that Facebook or Instagram are the leading purveyors of new photography– the daily delivery of selfies, restaurant plates, goofy pets and family outings. In fact, it’s the USPS.  It takes approximately 411,000,000 new pictures every day.

The images are emailed, and also displayed on the user’s web portal.

The automated sorting process for letters relies on instantaneous scanning of a bar code, or a ZIP code. In 2016, Americans dropped 150 billion pieces into the USPS mail stream, and the sortation machinery looked at every one of those pieces and took a quick picture of the bar code or ZIP.

Until recently, those images were probably trashed a nano-second later. But then someone, a marketer, an engineer, a postal clerk, thought, “Hey, we took a picture, let’s post it!” Pardon the pun.

Automation machinery scans the incoming letter-sized mail.

Thus, the invention of Informed Delivery.

Every day, we at our household, receive an email from the USPS advising us of letter-sized mail making its way to us. The email includes an individual JPG of each piece, in black and white.

Now, you may feel that this is a weak attempt, a grasping at straws by a struggling old school business attempting to fight the digital tides. To me, it is enlightened genius. In a move that is worthy of a jiu jitsu artist’s praise, the USPS is using the power of digital to elevate its analog medium.

Every day a USPS email sends a photo album of coming mail.

Christmas Comes Early
For people at home, Informed Delivery may eliminate the excitement and anticipation of walking to the mailbox. ‘Kind of like peeking at your Christmas presents under the tree a few days before the event. Still, the service lets you know that a letter, check or invoice you are waiting for is definitely on the way. It also allows you to look at your mailbox, or mail-on-hold while you are out of town. ‘Kind of like scanning your voice mail–and you know you do that.

Many Happy Returns
Direct marketers will love Informed Delivery. Rather than waiting for the physical replies to show up from their latest mailing, they can see the reply envelopes as soon as the consumer drops it back in the mail. Admittedly, marketers can get digital reports now of bar coded reply mail, but Informed Delivery shows which replies, as there may be many outgoing mailings occurring simultaneously.

The USPS harnesses a digital app…who knew??

A Stronger Pitch
Every marketer considers the orchestration of messaging. We want to integrate email, social media and direct mail to complement a retail sales event. Informed Delivery alerts consumers by email of a coming promotion. The front of the envelope is the ideal canvas for the first tease of the event.

Intelligence At HQ
It should be pointed out, that if I have a dashboard of my incoming mail, so does the USPS. While you may worry that the USPS knows what I get by mail, I don’t. But if postal reform ever does get passed, the USPS may be able to offer user privileges to recipients based on the volumes of mail received. After all, if you do receive a lot of mail, you are a likely advocate of mail delivery, and to the USPS, that’s a high-five.

Kudos to the USPS on this latest innovation.  My bet is that as it takes hold, it will be leveraged, much to the benefit of one of America’s oldest and revered institutions.

Thanks for reading and sharing! If you want to see the Informed Delivery package, click on this!

(All pictures shamelessly taken from the USPS email and my personal portal.)

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