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, Sports

Mail Order Magic: The USGA Doubles Down

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Marketing: a good grip that doesn’t let go.

The challenge of any direct marketer is to hold the enchantment of the buyer from the moment of first interest until the next order.  Let me tell you how the United States Golfing Association had me firmly in their grip.

Mind you, I have always been attracted to mail order.

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First mail order purchase.

As a kid, my first experience with mail order was a Robin Hood hat off the back of a Quaker Oats box. I wrote them a letter with a dull purple crayon. Two box tops, a quarter, and four weeks later, I was decked out in a lincoln green cap complete with turkey feather.

Moments later I dissolved onto a path through the tree line behind our house, earnestly in search of rich people to steal from.

My brother and I followed up with another offer, this time, a potato gun from Nabisco Shredded Wheat. More box tops, more coins, more waiting, and our ordnance arrived: two shiny, plastic, blue and red hand guns.

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The properly outfitted small arms mail order buyer.

Operating instructions were basic. Stick the front of the barrel into a potato, and pull away a small plug about the size of a pencil eraser. Choose a target. Pull the trigger. The little wad of potato would fly across the living room and roll to a stop under the couch.

After a couple of potato bits wound up in the electric space heater, the jig was up.

But the magic remains.   It’s important for cataloguers, mailers and weekend supplement advertisers that their buyer squeezes every bit of enjoyment possible from the order cycle.

The Hat: Mailorder Delivers!

The Hat: Mailorder Delivers!

There is an inexpressible excitement in opening a long awaited package sent by complete strangers, far off and away.   I had sent in my USGA membership renewal, and according to the letter I would receive a hat: an orange 2015 USGA Chambers Bay Open cap.  I already had one, but if it blew away, I’d have back up.

I am certain that the USGA Board of Directors convened a special meeting, extensively reviewing my  application before granting my membership extension for another year. A no brainer for them, this was an important symbolic order of business, for which they would levy a $15.00 fee against my credit card.

From there, I visualized urgent instructions hammered out on the teletype, dispatched to the membership fulfillment department, ordering them to rush a member package to our home, sparing no cost.

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The long awaited, hoped for package arrives.

Like a glistening white, dimpled Titleist, teetering on the edge of the cup, I waited by the mailbox.    This week, the USGA kit arrived.

Inside the lumpy plastic package I found my new member card, and a bag tag, branded with my name, and a framable picture of Chambers Bay, site of the 2015 Open.   And more…there inside the package was a new hat–but it was gray.

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Surprise! A new hat!

Was there a mistake?

No!   This hat is for the 2016 Open in Oakmont.   I have no idea where that is, but according to the hat, there are squirrels, and acorns.  Perhaps there are groundhogs too.

But the USGA prize committee could not contain themselves by merely presenting me with a new lid.   They also sent along a USGA 40th Anniversary metal ball marker.

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Double surprise! A ball marker!

This little disk is used to mark the fictional place of my golf ball as it rests closest to the pin.   I have never had the pleasure of seeing that, but I hope to one day.

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But wait, there’s more. It’s magnetized.

Even better, however, the prize committee designated that the ball marker have a special place of its own: it attaches to a magnet on the visor of my new cap.   Wow!   Like many bad hooks off the neighboring tee box, I truly did not see this coming.

Of course, the cap is firmly held in place even on the windiest fairways as the magnet rests over the metal plate in my skull.

Just kidding.

Years ago we were introduced to the concept of lagniappe.  This is the art of giving a little extra.   It wins a customer for life.  Good marketers always work lagniappe, and the USGA has cultivated the technique.

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The course beckons; the marker is poised.

With luck, they may someday improve my game.

Thanks for reading!  Please share.  Oakmont is outside of Pittsburgh, PA.

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