DM News' Deliver: Postal Reform, Better Address Quality Will Bring Opportunities for MailersPostal reform, address quality and the state of the fulfillment industry are a few of the topics covered in an interview DM News senior editor Melissa Campanelli had with Pitney Bowes president/COO Murray Martin. Here are highlights from that discussion.
MC How has Pitney Bowes been involved in postal reform?
MM Through lobbying and our work with the Mailing Industry Task Force, we are involved in efforts to get postal reform organized in an acceptable format for all constituents. We believe that reform can have benefits, as long as it's done properly. For example, we believe reform can enhance private-sector partnerships to increase the cost effectiveness of the postal system and also encourage the U.S. Postal Service to embrace technology.
We think this can be done - and at the same time the USPS can maintain price stability - but we believe there has to be increased flexibility, which should increase the postal service's ability to manage its business. We also think there needs to be clarification as to what the postal service's role is and what its mission is, and we see that as maintaining universal, physical mail service at affordable rates. We see that as the prime mover of what the postal service is to do. What we want to see is that the industry, which is very large, have stability in rates, cost effectiveness in rates so that the industry can continue to grow, rather than being potentially attacked by other competition.
MC What will the outcome mean for the industry? What kinds of opportunities will it bring?
MM We believe that for direct marketing to continue to grow as it has, and as we see it potentially growing in the future, there needs to be price stability and costs have to remain affordable to deliver direct marketing mail. The USPS has to focus on quality, efficiency, continuing to enhance the capabilities within the service to deliver mail in a predictable manner and at a low cost. We think that large price increases are problematic and that smaller, predictable or scheduled ones with advanced notice are much more doable for the market. Postal reform will allow for these things.
Work sharing is also a key part of the bill and something that enhances the private-sector partnerships. It can continue to increase quality, effectiveness and reduce costs for the postal service, and that work sharing is directly with the users of the systems or people that work with users in the postal service to take costs out of the system.
MC What trends do you see involving address quality?
MM The postal service has made clear that they have a major initiative that they want to have in place to enhance the quality of addresses. The cost of undeliverable mail is significant because they have to handle it, and they end up having to destroy or return the mail, which they don't get any value for. There are billions of dollars of waste from postal address quality.
We work with the USPS and our software to provide high-quality addresses and to be able to correct addresses, to be able to correct names and to fill in the missing pieces of addresses to ensure that the mail is deliverable. But we believe there is more to the address than the street number. There is actually the physical location of the address. And [through Pitney Bowes' Group 1 division] we supply geocoding [software] that will let you go in and turn the address into a physical spot on a map. Therefore, you can compute distances, place it on maps and see how it fits in jurisdictions, that sort of thing.
This is important for direct marketers because if you want to do a direct marketing campaign in a five-mile radius of an [address], you can't get there with postal codes. You would have partial postal codes, but this would let you get to the specific people you want to get to from a direct marketing viewpoint.
We think address goes beyond today's address, and tomorrow's address will move to an identifiable physical location that can then be used for multiple applications. We think that is going to be of increasing importance, and we are seeing an acceleration in the use of that technology.
MC The fulfillment industry is moving away from small mom-and-pop shops to larger enterprises, such as your PSI division. What will this shift mean for direct marketing? What do bigger shops offer DMers versus smaller shops?
MM PSI is the only national presort network in America. It is the only business capable of doing coast-to-coast management of mail for large companies. The reason that's important is to ensure the quality and integrity in delivery of the mail at lowest possible costs. So we can continue to take costs out of the system, and that's what it's for. At the same time, we enable midsize mailers to leverage into that system and get discounts they never could receive on First-Class mail.
On the Standard mail side, with the capability that's been developed, we are able to target dated delivery. If you want mail delivered nationally at so many pieces per day, instead of having them arrive when they arrive, that can be accomplished through our network. It lets you deliver what you want, where you want, when you want, rather than just putting it in the mail and trusting at what point it's delivered.
In our own case, we do a lot of direct marketing, and we've found that on certain days of the week the response rate is higher. Therefore, we want our mail delivered on those days, and we can accomplish that with a very high percentage.
Our PSI division is also growing. Since we purchased the company in August 2002, we have been in continuous expansion, moving from 12 to 33 facilities. And we see that continuing to expand. We initially targeted 35 to 40 facilities nationwide.
MC You recently purchased International Mail Express, a full-service international mail processor. How is business going on the international mail front?
MM We moved 28 million pounds of international mail last year, and we are seeing that continuing to grow. The easier it is to accomplish, the more it will grow. It's simple: The more cost effective, the more predictable, the more usage. And that's what we are enhancing. As for trends, we are seeing the delivery of catalogs and publications overseas as growth sectors.
MC Last year you purchased Imagitas, a targeted marketing services company. Can you talk about any new initiatives you are working on in that division?
MM Our focus with Imagitas is life-event marketing, and what we mean by that is providing the right information to the individual at the right point. If an individual moves, they need information about the location they have moved into, such as where to go to achieve certain things. Or, if a person needs to renew their vehicle license - that is another moment change in time. We look for those communication times when there is something that is different. We then leverage that with direct marketing to ensure that the right information is available for the individual to make the best decisions that are available.