Tuesday, January 6, 2009

More US Postal Service News


I can't believe that my first blog of the new year ends up being about the US Postal Service. Gee, I guess I AM a direct marketing geek.

In November, I posted on a similar topic--ways the USPS may be able to save money through cost-savings initiatives (such as cutting out delivery days).

Today's slightly depressing postal news comes to us from National Public Radio: Postal Service Sees Less Mail In Slumping Economy. The article cites the serious decline in mail and revenues the USPS is currently experiencing.
The recession is reaching well beyond the automotive industry or the mall.

It's even hitting the U.S. Postal Service, the nation's third-largest employer. From holiday cards to credit card offers, mail volume is down. And the Postal Service is losing money.

I guess it's no surprise that companies (and even consumers) are mailing less. In the hey day of the mortgage boom, tiny mortgage companies were mailing millions of pieces a month. And the giant financial services firms were in the multi-million volumes (I remember one company, in particular, who mailed upwards of 10 million pieces each month--that's a lot of paper...).

What brought the postal decline home to me was this quote from the article:

Stephen Kearney, senior vice president of customer relations for the Postal
Service, says the drop in mail volume "accelerated throughout the year. ... Our
mail volume had its greatest decline since the Great Depression."

In the fiscal year that ended in September, mail carriers delivered 9.5 billion fewer letters and packages than the year before. Kearney says the Postal Service made aggressive cuts and still lost $2.8 billion. Fiscal year 2009, which started Oct. 1, isn't looking any better, he says.

My take on this: I do believe that direct mail will remain a viable channel for some marketers. However, I think that the trend of cutting mail volume is here to stay. Gone are the days of super-duper high volume direct mail, blanketing anyone who seems close to the target audience. DM will be used judiciously and only where it makes sense.

5 comments:

Ted Grigg said...

I think you are right about the continuing decrease in direct mail. But let's be honest. Many of these mailers were over mailing anyway.

The decrease volume means that the quality of direct mail will likely improve. And this will benefit mailers as a whole because the response should improve as well.

It will be interesting to see what happens to mail response rates over the next few years.

Suzanne Obermire said...

Ted, as always you make some great points here. I especially like your optimistic take on improvements in mail quality and response rates.

Thanks for the comment.
Suzanne

Dean Rieck said...

Rats, Ted. You beat me to it. I agree that less mail probably means better mail. And more response.

But once response starts going up, more people will start using mail.

Sean said...

Hmmm.... I don't think Netflix has dropped their volume at all. Perhaps there's an argument that in a recession culture, marketers are being more focused and targeted with their dm spend... I wonder if anyone could help me understand the decidedly untargeted approach taken by Netflix?...

http://www.economixt.com/2009/03/netflix-direct-mail-profitability/

jeuceier said...

quality of direct mail improvingis less likely as the postal service eliminates experience employees and puts larger workloads on the remaining personnel, consolidates postal facilities, processes mail far away from its' delivery locations, and retains inept managers, who only care about their own job security