For direct marketers, a USPS in distress is a little bit heartbreaking.
The Postmaster General has recently proposed a five-day delivery plan to help reduce costs and partially offset its first-class mail volume and revenue declines. The plan notes that: “Reducing street delivery to five days will help rebalance postal operations with the needs of today’s customers. It also will save more than $3 billion a year, including reductions in energy use and carbon emissions.”
With the USPS budget shortfall reaching $7 billion this year, these savings would be significant.
What does eliminating Saturday delivery mean to marketers?
Many large sophisticated direct mail programs have finely tuned mail patterns and schedules that incorporate Saturday delivery. Reducing service days will disturb some of these patterns, which have been closely moderated and refined both for marketers’ planning purposes and optimal service to customers.
Mailers will need to determine how to overcome this issue and determine whether it will impact sales results attributable to their programs or just change the revenue flow.
Weekend call centers — where consumers call in to accept direct marketers’ offers — certainly have the most to lose, which means potential job losses beyond the USPS. On the other hand, call centers will still need to be open on weekends, since this is when many consumers have time to look at direct mail offers that have arrived during the week.
Savvy CMOs have already reduced their dependence on a single medium.
No mail delivery means a change in behavior — so how else can marketers leverage that weekend shopping time? If Saturday mail delivery goes away, email, direct response TV spots, search engine marketing on Google, Bing and Yahoo!, as well as other accountable media can be tested in the missing weekend dayparts.
Smart general agencies have learned to think outside the 30-second TV commercial. Forward-thinking direct marketing agencies have gone far beyond direct mail in recent years.
While mail has advantages in terms of reaching a target audience (everyone has a mailbox), targeting (sophisticated mailing list management and data mining have been around for decades) and predictable response rates (making planning easy), other media can and will take up any slack.
According to DMNews, Patrick Donahoe, deputy postmaster general and COO of the USPS, said on March 29 that business mailers have been more receptive to a drop in delivery days than possible price increases. “Most business mailers said, ‘Give us four months to adjust our schedules,’” he said. “However, the thing they do not want to see are price increases.”
The DMA seems to agree. DMNews quoted Jerry Cerasale, SVP of government affairs at the Direct Marketing Association, as saying his organization’s members are split on the USPS’ attempt to move to five-day delivery. He adds that the group is also against the price increase that Potter described.
The DMA itself is taking a stronger position:
• “We are committed to keeping every channel open and economically viable for our entire multichannel membership. That includes the mail, Internet, emerging mobile and broadcast channels, and perhaps new channels yet to be identified. We do this so that ultimately the marketer and consumer can engage in a relationship when, where and how they are mutually benefiting, unconstrained by unnecessary barriers.”
• “A reduction in service should be looked at only as a last resort.”
• “We believe that a reduction in delivery days could drive some marketers away from using the mail stream, which would further reduce mail volume and cause greater strain on the USPS current fixed costs."
In other words, eliminating Saturday delivery could lead to an unhappy conclusion for the USPS: If other media prove effective, the Postal Service potentially loses as much as it gains in cost savings.