The Time Is Right to Grow the MailThe Mailing Industry Task Force gave our industry some much-needed visibility this year by informing our congressional representatives that direct mail is a $900 billion business employing 9 million people nationwide. These impressive facts become exceptionally useful when broken down by congressional district.
At the September Postal Forum, postmaster general John E. Potter officially changed the U.S. Postal Service's mantra from "cut expenses" to "grow the mail." This signaled its accomplishment of operating more efficiently and set a challenge for the USPS and mailing industry to build this important communication medium.
Making this all the more interesting are the time and circumstances of the challenge. The mix of mail has changed, perhaps forever. The volume of Standard and Periodical mail is now on par with First Class. However, advertising mail (the general description of this combined category) needs to grow significantly to offset the revenue loss of diminished First-Class mail.
Direct mail is widely used for advertising and promotion because of its proven response power. We can help grow the mail and ensure the medium's effectiveness by removing corrupt name and address pieces from entry into the system.
This requires that mailers and service providers aggressively incorporate pre-mail cleansing procedures to ensure more mail gets delivered. For example, 1,000 new orders can be generated if a 5 percent name and address correction is made to a 1 million piece mailing that generates 2 percent response. Quite an accomplishment: 1,000 new orders and elimination of the expense of placing 50,000 undeliverable mail pieces into the mail stream. This illustrates a phenomenon that has occurred as the mix of mail has flipped.
While First-Class mail, which falls under the Move Update regulation, has plummeted, the cost for processing undeliverable-as-addressed mail has risen. This suggests that ad mail, which is unaffected by Move Update, exacerbates the UAA problem and gives credence to the argument to bring all mail classifications under the strictures of Move Update.
The postal service has rolled out the compliance aspect of Move Update. Many wrongly view this to be a heavy-handed measure by the USPS to garner fines from mailers. Not so. Postage discounts are routinely provided by the postal service on the basis that they have been earned. If procedures to minimize corrupt mail entering the mail stream are not taken, then the discounts given in good faith are unearned and need to be returned. That's neither a fine nor penalty.
However, the compliance test period revealed the need for an instrument that holds list owners, not their service providers, responsible for being in compliance with Move Update. PS 6014, a USPS form similar to the CASS Certificate, should be a required document obtained by service providers from list owners along with receipt of their mail files. Should a mailing result in an audit, the document will properly direct the USPS representative to the correct source.
Resistance to updating lists has been attributed in some degree to lack of timely, easy access to the postal service's National Change of Address service. That concern has been remedied with another of this year's milestones: introduction of NCOALink. This is a new generation of address-change service designed to replace FastForward with a more robust onsite name and address update processing tool. The improvements, most notably an 18-month individual and family move history and identification of all delivery problem codes, make NCOALink of far greater value to mailers than its predecessor FastForward.
These milestones show the vitality of our industry. On that mitigating note, it's not too great a leap to present a very selective set of predictions for 2004:
· Continued growth of the mail, in particular ad mail.
· More negotiated service agreements.
· Publicized accounts of compliance offenders.
· Increased educational emphasis on the savings benefit gained with regular use of address-hygiene procedures.
· Official announcement of USPS intent to expand scope and frequency of the Move Update regulation.