Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.

National Postal Forum (NPF) Conference 2004

Small Business is Big Business at National Postal Forum 2004

Six thousand strong gathered in our nation's capital September 19-22 to participate in the National Postal Forum. The most number of attendees in four years came to network with one another, to attend more than 100 workshops (68 new topics), see the latest innovations from well over a hundred trade show vendors, and enjoy a few days of early fall in Washington DC. The various sessions were broken down by product symposiums, such as periodicals, package, and remittance mail as well as eleven different tracks to include mail center management, College & University, mail marketing, production, technology, nonprofits, and printing to name a few.

Attendees received a rousing welcome to the early Monday morning general session by the President's own United States Marine Corps band and presentation of the nation's colors. In his opening remarks Postmaster General John E. Potter said, "Today, the mailing industry appears focused on the mega-customer. But, we all know that the largest growth segment in the American economy remains the small and mid-sized business." His message and the theme of the conference was how to help small businesses and value-added postal vendors to (1) understand the perceived value of direct mail from consumer's perspective and (2) work with the USPS in leveraging its many existing and evolving programs in growing together. He concluded, "It's time we return to the basics and a simple message to all customers, large and small alike: The U.S. Mail has value. Mail works!"

Implementing this grass roots strategy will not be easy. But ironically, as this article will detail, the printing industry can and should play a pivotal role in its successful implementation while clearly benefiting printers, print associations, and most appropriately mutual customers.

Phase II activities of the Mailing Industry Task Force were reported. Phase I concentrated on internal operations and cost reduction that certainly contributed to the $8.3 billion in cost savings reported by Mr. Potter. Phase II will focus on revenue generation and making the mail more effective. Under Pricing and Payment initiatives included a priority mail flat-rate box proposal ($7.70 for anything that can fit in either of two sizes to go anywhere in US) and Periodicals Co-palletization (titles of <75,000, weigh >9 ounces, <15% advertising and be drop shipped into DADC or DSCF).

Future initiatives include greater flexibility on 2nd ounce first class mailings to encourage insertions and greater design to make paper billings more of a marketing tool and therefore more attractive than electronic billing. Another consideration is cyclical pricing by using discounts and premiums, which would tailor rates to time of the year, month or day of the week. The intent would be to increase mail volumes and level mail fluctuations. Periodical and catalog printers have all tried the carrot of schedule discounting to keep monthlies from always dropping the 28th-32nd of each month and weeklies from dropping Thursday-Saturday. Few affected publishers have moved their drop dates, but with added postal discount incentives the straw on the camel's back could be an I-beam. Mr. John Nolan, Co-chair of the Task Force and Deputy Postmaster General said, "It's not just about new products and services. It's also about the need to focus on innovative ways to use existing, powerful products and services, as well as the postal brand."

The Task Force's new innovation development process - the Innovation Incubator Initiative - was launched in late June at the first ever "Innovation Summit" held at USPS headquarters in DC. The two-day event attracted 30 executives from Fortune 100 companies and produced over 90 concepts targeted for further study and possible development.

USPS technologies now in use and evolving in the near future are truly world class. The use of these technologies coupled with private sector work sharing programs is resulting in USPS staffing levels coming down to 708,000. This is the same as it was 20 years ago. But today the post office is delivering 65 billion more pieces of mail to 48 million more addresses than two decades ago.

Currently there are two bar code technologies in use to automate the sorting of all classes of mail. Seventy percent of the barcodes are being applied by customers or service bureaus and thirty percent by the post office. They are currently sorting 80% of letter mail to delivery sequence with an obvious goal of 100%. The next generation of an 11-digit barcode, called a 4-state barcode, applied to all mail will improve the reliability of this approach while also further simplifying the universal tracing and tracking of mail from entry to destination, hence, the term "intelligent mail." This sophisticated sortation coupled with services provided by specialized logistics vendors is encouraging medium volume mailers to mail drop-ship deeper into the USPS system and closer to the ultimate delivery point. This avoids transfer at intermediary postal facilities. Customers realize more predictable delivery dates and postal savings.

Actually the tracking of mail entry and arrival has been available for several years by means of the USPS Confirm Service. Advance delivery information is available on both outbound mail going to customers and incoming hard-copy reply mail for automation compatible first class mail, standard mail, periodicals, and flats. This allows direct mail solicitations to be synchronized with telemarketing or opt-in e-mail broadcasts. Deliver information on invoices allow more efficient staffing of call centers. Embarrassing miscues for such legal notifications such as insurance cancellation or dunning notices might be avoided and thus improve client relations.

For printers offering fulfillment services and embracing the "satisfied recipient" concept, Confirm will allow them to quantify their proof of mailing as well as accurately predict response rate curves when part of an on-going marketing support program. With historical knowledge the service can help to optimize inventory levels and smooth labor demands for pick and pack order processing. While the USPS will be transitioning from the POSTNET and PLANET coding structure to the new 4-state barcode, there really is no reason for printers to wait for that transition to benefit their clients from the existing, proven Confirm program. For those firms who believe that you don't manage until you measure, Confirm could be a vital measurement tool.

Presentations by Confirm Program Manager Marlene Ryan and the Customer Support Center Supervisor Earl Johnson indicated that the USPS Confirm staff spends a good deal of time understanding what the client's business is and what they are trying to achieve to arrive at realistic expectations and practical tracking objectives. Their success rate is reflected in a 90+% retention rate of customers trying and staying with the Confirm program.

Confirm subscription fees are $2,000 for 3 months and up to 15 million scans, $4,500 annually for up to 50 million scans, and $10,000 annually for unlimited scans. Visit the Confirm website at mailtracking.usps or call 800-238-3150 for additional information.

The USPS COO Pat Donohoe in another general session described the results of a comScore study indicating that catalogs drive Internet sales. The study conclusively showed that consumers receiving catalogs (1) were twice as likely to buy from the firm's website, (2) would buy considerably more per website visit and (3) shopped more frequently than a consumer going straight to the website.

From a production standpoint the heavy emphasis upon standardized input requirements to drive efficiencies is easy to understand. But the plain vanilla, everything-the-same approach turns creative marketing types off, particularly when you are trying to grab a prospective client's attention. For package printers, i.e., diecut finishing, there was ample excitement about highly customized mail or irregular-shaped pieces. Lots of samples were passed out and the specifications are pretty simple: the maximum weight is 3.3 ounces and maximum size is 12" by 15." The job must be entered in the direct delivery unit and must be a minimum of 200 pieces. The rates applied are basic nonletter, regular, N/P Standard with a residual shape surcharge. This surcharge might be avoided if the diecut piece were inserted into a clear envelope. Get your Postal Rep involved early the planning of such a project.

Executive Vice President and Managing Director of Chicago-based advertising agency DRAFT, John Minnic spoke on building the ultimate customer relationships. From the basis of their Behavior Path Marketing™ he suggested that customer's loyal to a brand was not enough but that you want to move clients to become "hard core brand evangelists." McDonalds calls these folks their SHUS, Super Heavy Users, that stop buy a McDonalds several times a week if not more than once a day for a meal or a snack.

Database technologies are a key tool in creating a dialogue, i.e., encourage feedback, with loyal clients. The new USPS products of Repositionable Notes and Customized Mailers contribute to this dialogue instead of a monologue. Minnic concluded by saying, "It's better to reward brand loyalty rather than exploiting brand loyalty. And knowing, serving, and indulging loyal customers is the best way to serve shareholders."

Consultant Jim Barlow spoke on the prudent practices followed by mailers, printers, and advertisers. He recommended a series of common sense steps to follow in avoiding major problem jobs: (1) written job specifications confirming all verbal requests, (2) use of MFSA trade customs (free at mfsanet.org), (3) use delimited database mail list files, NOT Excel files, (4) copy the furnished working file and verify, (5) QC checklist with signoff, (6) check output/samples to assure USPS compliance, (7) check subcontractors QC processes, and (8) communicate thoroughly with all parties.

While there were no sessions specifically designed to discuss the Postal Reform legislation moving through Congress, there is no doubt that having the Postal Forum in the District of Columbia was a convenient way to let the various postal advocates in attendance have easier logistical access to their elected officials.

As an aid to all customers, but clearly looking to the smaller entities, the USPS is continuing to expand their variety of services and materials available on-line. From stamps on-line to print shipping labels and pay for package services with Click-n-Ship. PMG Potter quipped, "How do you spell convenience? USPS.com!"

USPS' Chief Marketing Officer Anita Bizzotto emphasized that one of the keys to reaching small businesses will be the local Postal Customer Councils (PCCs). Started in 1961, this group now numbers less than 200 with varying degrees of effectiveness, as some do not meet very often. Bizzotto and her marketing team will be revamping many of their priorities in order to give these entities much more support. For example, the former twice a year NPF gatherings is changing to a spring National Postal Forum, next one in Nashville March 20-23, and a fall "PCC Day."

Without going into detail of what all the USPS is trying to do to ramp up support for the PCCs, the fact remains that local PCCs will be driven by small business owners that function in their PCC leadership roles as volunteers. While some PCCs have clearly been dynamic and effective in both their networking and training facilitator roles, their success will unfortunately rest on the dynamism of isolated personalities.

This basic weakness might be a jewel of an opportunity for the PIA regional affiliates. With 48% of all printed product being distributed through the mail and an increasing number of printers expanding into mailing services, it would seem a logical extension of the mission of the regional affiliates to partner with the various PCCs in their same region to host joint gatherings. The affiliates have full time paid professional staffs experienced at planning and facilitating meetings while the PCCs have the topics, USPS support materials, and in many cases speakers available. The topics are of interest to printers and PCCs would like more printers as members. Sounds like maybe a revenue sharing win-win situation.

To me certain conferences encourage a particular biorhythm. From my printer's perspective the National Postal Forum shows that it's not about selling ink on paper. It's about staying in touch with clients and reaching out to better qualify new customers. It's about creating value.

Article prepared by C. Clint Bolte, C. Clint Bolte & Associates, Chambersburg, Pennsylvania. For additional information please call 717-263-5768, fax 717-263-8945, or e-mail to clint@clintbolte.com.