The Postal Service talks about adjusting to digitization and the habits of a changing marketplace, but its culture remains mired in the habits of a “Golden Postal Age,” when volumes ticked up like clockwork. “Mail moved up with the economy; it didn’t matter what we did,” said 38-year U.S. Postal Service veteran Kent Smith at the Postal Vision 2020 conference in Washington. “We talked about ourselves as a commodity business where 2% growth was OK, and we’d make it up on volume.”
That mind-set is one of the contributing factors to the malaise the Postal Service now finds itself in, said the former manager of both the Market Research and Strategic Business Planning units at the agency.
“As bureaucrats, we try to avoid risk and maximize return. Customers are focused on benefits, but we’re not talking about the customers. Entrepreneurs focus on opportunities, and we don’t necessarily talk much about opportunities,” maintained Smith, who still uses the personal pronoun “we” when speaking about his former employer. But Smith, the current research director for Ursa Major Associates, also refused to let private business stakeholders in the mail off the hook: “We as businesspeople like to focus on problems and create solutions, and we may be missing what’s going on to create new opportunities in the future.”
Observing that postal reform legislation—should it ever be enacted by Congress—won’t be a cure for the Postal Service’s ills, Smith outlined a 7-point plan for how it can thrive in the 21st century:
1. Become the information powerhouse you know you can be. USPS should leverage the incredible amount of data it holds to drive better performance and customer experiences. “When the Postal Service can go in to mailers and say, ‘Here’s how we can use this data to make direct mail more effective,’ that’s exciting, especially when [mailers] see how well the Postal Service will be able to deliver on customer preferences.”
2. Create a virtual private network for consumers. Further use the data warehouse to increase engagement with recipients by creating an internet channel around the mail, giving people the ability to have mail delivered where they are, for instance, and be able to track it on their phones.
3. Invent the digital front end for mail. Smith recounted how a presenter at the recent National Postal Forum demonstrated that she was able to push up response rates to her mailings by integrating with Google and challenged USPS to try to own this business. “There will be a time when you can sit down at your PC or tablet and design an entire mailing from start to finish,” Smith said. “The digital front end of mail—who’s going to create it?”
4. Bring magic to delivery. The advent of the Internet of Things will have the mail, the truck, and the driver all communicating with each other, and the resulting information will create untold opportunities for both efficiencies and customer service. “All the Postal Service cared about was getting the mail into the mailbox,” Smith said, “But the connection of the carrier, the letter, and the channel will create a magic moment. We ignore it at our peril.”
5. Work the segments. Market researcher Smith challenged Postal management to act more like direct mailers by identifying and serving the needs of different segments. He cited a study USPS conducted before the last recession that identified three user segments–the largest of which, at 37%, said that they relied on the mail. “How do we reinforce that segment, move up the segment in middle, and really think about attracting the people who say, ‘I look at the mail sometimes,’” Smith said.
6. Make the mail channel important to people. Public-private relationships could be explored to add value to customers and allow the survival of much-desired Post Offices in towns where they face closure. People don’t want to lose their Post Offices, so USPS has to find ways to make them profitable. “I don’t know if you’ve ever tried to close a Post Office,” Smith asked. “I have, and it’s one of the most difficult things you could possibly do.”
7. Collaborate with both sender and receiver. “When we talk about the customer, it’s not the mailer or the recipient, it’s both. “It’s a simultaneous equation that has to be solved.” Smith said. “We have to understand the customer’s customers.”
