USPS Service Cuts: Why Direct Marketers Should Be Worried

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USPS Service Cuts: Why Direct Marketers Should Be Worried

The announcement last week that the U.S. Postal Service plans to eliminate next-day delivery of first-class mail was hard news for direct marketers like me to hear.

Not because the direct mail campaigns our marketing agency creates require next-day delivery. In most cases, we mail standard class to get lower rates and we factor in the necessary delivery time when crafting a marketing plan.

But I got a sinking feeling when I heard this latest news. I fear that as service delivery levels fall and the costs of using direct mail climb, we may be nearing a tipping point when mail will lose its viability as a marketing channel.

Here’s what I think this news means for smart marketers whose strategies include direct mail marketing.

The Worrisome Implications of This Latest Move

The financial liabilities facing the USPS are staggering. The agency is working hard to find ways to cut costs and it has to consider all options. The most recent plan is to close more than half the nation’s mail processing centers, including ten here in Ohio.

We can probably get used to first-class mail that takes a day longer to get there. We also can probably manage without Saturday delivery, though many catalog marketers could find their call centers quieter on the weekends if the USPS gets approval of five-day-a-week delivery.

But think about the implications – for any service-based organization – of reducing service levels.

When your mission is to deliver a service, the last thing you want to do is deliver less service. The customers you have will leave and the ones you’re trying to attract won’t even consider you.

As old customers find new options – paying more bills electronically, sending e-cards instead of printed cards, using FedEx or UPS to ship packages, or using e-mail or social media instead of direct mail for marketing campaigns – and new customers stay away, a downward spiral can begin that’s hard to stop.

Fewer customers will mean lower revenue and the USPS may be forced to make even deeper service cuts, which will make using the Postal Service even less attractive. Where does it end?

Fuel for the Fire of Direct Mail Naysayers

As a marketing consultant and lifelong direct marketer, I strongly believe in the channel and often recommend it when planning marketing strategies for my clients. But even before this news, more and more of my clients  have been telling me lately that they can’t justify the cost of direct mail compared with e-mail, web marketing, and social media.

If service levels continue to go down and costs continue to go up, even direct mail advocates like me could find it harder to make the case.

Oddly enough, there could be an upside for direct marketers if fewer people use mail. A less crowded mailbox could help your direct mail campaign get more attention. For some direct marketers, continuing to mail – indeed, even mailing more – could be a smart marketing strategy.

But for others, the reasons not to use mail could begin to outnumber the reasons to use it. Unless the USPS can become a healthy service provider, marketers who depend on it now will rely on it less and less.

Why I Hope I’m Wrong

Direct mail is one of the most effective marketing channels ever created. A creative, high-impact direct mail campaign is still among the most powerful ways to capture the attention of prospects and engage them in your marketing message. And while I’m dismayed at what I see happening with the Postal Service, I don’t believe direct mail marketing will end in my lifetime.

But the cost and quality of service could make it an increasingly unattractive option for marketers. That would be a sad outcome for those of us who have always believed in its value.

Do you think I’m wrong? Should I stop worrying? What do you think lies ahead for direct mail marketing, based on this latest news?

  • Bob Nemens

    If anything, the changes should spark a reevaluation of how the channel is used–and specifically how it should compliment electronic channels in an effective mix of communications. Direct mail can still hold its place. I think the challenges are to reassess based on the same fundamentals of knowing what content and what frequency your audience wants to see a printed communication in their mailbox. Useful content delivered at the right time is still the measure.

    December 14, 2011 at 9:46 am
  • Bob Salvas

    Excellent article that really addresses the concern that direct marketers like us have. I do think we will come out of this… Something about having a tangible piece in your hands. I talked to a client who used to do newspaper inserts and has moved to direct mail because so few people read the newspaper these days. So maybe we pick up some from new places- other marketing is cluttered and hard to break through…as you mentioned, less mail in your box may mean more impact. I agree that cutting some service is not necessarily good, but price and consistent delivery may be more important than speed in the long run…

    December 16, 2011 at 5:04 pm
  • Zen Bonobo

    What has your association, the DMA, done in the way of lobbying for the preservation of the USPS? What cross industry interests have come to your support. Where are your political “ducks” tied.

    I have looked at where those political dollars from your industry and closely allied industries have gone and your plaint here is not in line with the stated intentions of some of the candidates and incumbents you support. Business and industry, by and large, has followed those who want to shut functions like the USPS down. They say that a private or corporate entity, like UPS or FEDEX could do that job a lot better.

    The USPS has a long tradition in the function of the inner workings of the US as national entity. It is the kind of tradition of service that one would hope would be conserved and preserved. Who in this tumble of ideas about our national life has stated there are some functions of governance that need to be preserved?

    Ohio? Ten processing centers? My President was there yesterday. I believe that the opposition was just getting back from Bermuda.

    July 6, 2012 at 6:13 pm
  • Coleen

    A lot of comments from those using direct mail. What about those of us receiving it? The increase in direct mail marketing and the decrease in personal mail (bills electronic, letters via email) means that now I let my mail accumulate for a week. Once a week, I go right from the mailbox to the trash can. I take an armful of mail and whittle it down to less than five items that I want or need to keep. The more direct mail and the less personal mail = the less relevant USPS has become, for me. Wish there was a way, like the Do Not Call registry, that I could opt out of all of it. But my mail delivery guy seems to think that his job depends on it. He’s a walking SPAM deliverer. Nice guy. But no longer relevant. Think I’m going to either go to checking mail once every two weeks, or moving the trashcan closer to the mailbox. Lose Saturday delivery? I don’t care at all. In fact, I’d prefer delivery once a week. Unless there is something I am waiting to arrive. And then? I’ll use Express Mail, FedEx or UPS same/next day service instead of First Class mail if I can avoid it.

    What I do agree with is that the USPS should be preserved. To do that, needs to be a glasswall which prevents Congress from interfering or sabotaging it. And someone, somewhere, needs to find a benefit for USPS other than DMA. Otherwise, eventually I’m just going to put the trashcan underneath the mailbox and cut a hole in the bottom of the mailbox.

    October 31, 2013 at 4:57 am
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