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Broker Roundtable: USPS Finances and Direct Mail

By Oct 05, 2011

Welcome to Broker Roundtable, where each week we ask list brokers to give their opinions on issues that matter to the marketing community. This week's question: What impact will the USPS’ ever-worsening financial picture have on direct mail?

Our panel includes Don Eaker of Nexxa Group Inc., Leland Kroll of Kroll Direct Marketing and Shawn R. Salta of DirectMail.com. Would you like to be considered to be a member of our roundtable? Contact Larry Riggs (larry.riggs@penton.com).

Don Eaker , national director of sales, Nexxa Group Inc.:
We’ll start with the mildest influences and work our way down. At the least, we will have a delivery window closed by one more day, shuttered mail processing centers, reduced staff, all resulting in a longer mail processing time per drop. Cost increases to direct mailers will also be a factor due to the attempt of reducing the deficits of the U.S. Postal Service. Nonprofits will suffer as their discounts will also be reduced to help with the postal deficit. In a worst-case scenario, the USPS could be shut down for lack of funding. This would be a catastrophic blow to the economy and the way of life of millions of Americans.

What could the USPS be doing differently? They could start by listening to their largest customers, standard mailer,s and ask what would boost postal usage. It is obvious that first-class mail has been decimated by email and the Web, so in what areas could changes be made for standard mailers to increase their volume? One example was the barcode promotion this summer. It was met with favorable success – unfortunately, administration hurdles that were required to be jumped were beyond all but the largest mailers. Smoothing and implementing that admin issue moving forward would be an immediate step to assist mailers.

Leland Kroll, president, Kroll Direct Marketing Inc.:
The USPS financial situation is certainly a dire one that will impact all citizens one way or another. With the reduction of Saturday delivery, mailers will need to be plan their mail drops accordingly, building in more time for their direct mail solicitations, catalogs, and publications to be delivered. Analyzing response rates from a timing perspective as well as coordinating any multichannel campaigns will also need to be reviewed. Direct marketers will need to ramp up their online, mobile and social media campaigns in order to engage with their audience on weekends.

Shawn R. Salta, vice president, DirectMail.com:
With the recent clarification on the President’s stance on the position of the USPS, it appears some congressional action will be taken over the next weeks to months to provide temporary relief. It is too early to tell what the final plan will look like, but it likely will eliminate Saturday mail delivery and include layoffs and facility closings. I’m less confident on this prediction, but I fear the plan will allow the USPS to raise rates without regulatory approval, an action that will affect mail volume.

I am concerned that suspension of Saturday delivery will influence direct mail results, but only slightly. We’re all competing for our mail piece to be opened and, with one less day of delivery, there will be more mail in the mailboxes Monday through Friday and greater competition. I’ve yet to hear a strong argument how Saturday delivery will not have an impact on results, so we’ll have to watch the legislation carefully if it passes. Congress should not require the USPS to overfund the pension fund. Mail volume is down across the board, so the USPS shouldn’t be exempt from the layoffs the private sector has already endured.

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