I read Al Urbanski’s article “How to Save the Postal Service,” and unfortunately, despite asking knowledgeable people in the industry to weigh in on the subject, in my opinion they’ve got it all wrong. I know, I know…who am I to say that?
I’ve been in direct response my entire career, and while I’m just another guy with another opinion, sometimes looking from the outside in helps to really see what’s going on. Respectfully, the five points made in the article need to be rethought. Here’s why.
1. Use postage increases only as a last resort. As evidenced by past increases, they never work. They are Band-Aid solutions to a fundamental problem: the Post Office gets its money from Congress, and therefore, really don’t earn it. In other words, it doesn’t make money because it has no concept of money. Without an understanding of whose money we are talking about, the problem cannot and will not be solved. Price increases in business are often knee-jerk reactions. Businesses need a pricing strategy. Just raising postage rates will never work.
2. Phase out direct door delivery. Our carrier for a number of years (call him Donny) walked in one day without the usual smile. “What’s up,” I asked? “I’m being clocked,” he said. He explained that his supervisor was in the lobby timing him. “Let me handle this,” I said. I walked out as Donny went upstairs, took the supervisor by the arm and whispered, “This is one the best guys you have,” I said. “Great personality, great service.” The supervisor looked stunned and frowned. “He’s the worst guy I have,” he said. “Inefficient as all hell.” I was struck by the contrast; my perception was totally opposite the supervisor’s. I asked Donny about it later in the week and it became clear to me: The Post Office’s problem was its misguided approach to efficiency. Donny had relationships–and relationships are what creates business. The management at the Post Office was trying to automate delivery “to be more competitive.” That’s exactly the wrong thing to do. You never see the competition taking the time to chat…to be human. And if you call that inefficient, are you in the delivery business or the relationship business? The Post Office owns relationships, but doesn’t capitalize on them.USPS needs to change direct door delivery, not phase it out. If the Postal Service gets rid of it, it will kill the concept of the Post Office. Indeed, Fedex or UPS will not cancel direct door deliveries.
3. Better serve the segments. I have no idea what this means. Perhaps it means creates “niches” for delivery service. But what, then, is the concept of “mail delivery” but a niche the USPS is failing at?
4. Fast-track negotiated service agreements. The point here was to speed up service contracts because the “USPS must look to grow volume.” Volume is what is killing the Postal Service now, so why would it want to increase it? If you grow volume and you lose a penny on every transaction, you simply lose more pennies. This point plays into point #3, which is to treat “delivery” as a niche-able idea. That is, the concept of postage was to pay for stamps to get something from point to point. But the concept is really a delivery concept, and the consumer pays for that service. In the service business, people are willing to pay for better service. Part of the real problem is that people take the USPS traditional delivery service for granted. It’s become a commodity. But, what if you ask people, “Would you pay to have your mail delivered to your box, or would you like to simply come to the central location to pick it up at your convenience?” Yeah, a lot of moaning and groaning, but that’s what happens when you change, isn’t it? Do that, and suddenly you have a pro forma on turning around an unprofitable model to a profitable model.
5. Exploit the USPS’s unique position in the marketplace. The Amazon Sunday delivery is innovative, but how much of it is tied to the consumer understanding that this is not your father’s USPS? Its “unique position” according to the article, is that it’s a “government-funded monopoly.” But monopolies aren’t allowed in regular business, and therefore, it is a model that cannot stand (which is the core problem with the USPS). What will stand is to spin it off; let someone like Amazon buy the Post Office and turn it around into a profitable delivery service. Or, put private business people in charge of it, and give them the freedom to out-think the competition. The USPS’s unique position isn’t that it’s a monopoly; it’s that it has feet on the street, and that it has data that other businesses hunger for. The key isn’t mass mailing anymore; it’s high-profile, targeted contact that’s the key. Ironically, except for its attitude, the USPS is in the perfect place to make such contact happen.
My four uncles worked for the post office. They had full-time day jobs, but at night they’d go to the post office and work a second job. That’s how they became successful: they worked hard, saved their money, and worked hard some more. I don’t know how many people work hard at the USPS today, but I do know that with the right attitude, you can change pretty much anything.
Jim Nowakowski is president of Interline Creative Group