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Is a Prospect Rate in the Cards for Catalogers?

                                                                                              Source: Frazer Harrison/Getty Images North America 

Cliff Rucker today scored a rare achievement for a senior Postal Service official: He won a spontaneous round of applause from a roomful of big mailers at the American Catalog Mailers Association Forum in Washington.

Despite the injurious rate hike catalogers endured in 2007, despite this year’s exigency increase, despite the absence of postal reform, most catalogers would be happy if the Post Office would consider granting them one thing: a special rate for prospect mailings seeking new customers. One of the most damaging side effects of exigency for catalogers is that many of them will be forced to curtail prospecting in order to afford delivering to current customers. They’re frustrated that Postal Service honchos fail to realize that new customers for catalogers means new business for the USPS. A cataloger at the forum noted that one new acquisition translates to two years of future mailings to that customer.

And one major player at the Postal Service, apparently, seems to get it.  After hearing Rucker stump for more Negotiated Service Agreements (NSAs) from catalogers, ACMA Chairman Martin McClanan turned the conversation to the prospect rate. “We’re talking about something that can really transform volume,” McClanan said. “What if we were to try to get that?”

Rucker, true to his stated mission of acting as an advocate for postal customers, didn’t miss a beat. “I don’t think anything’s impossible. I don’t see why we can’t do some type of prospecting promotion and see what happens,” Rucker responded. “I’ll commit to seeing if we can get a prospect rate in some of [USPS VP of Innovation Gary] Reblin’s promotions.”

That promise prompted a burst of applause—though there was one qualification. Jonathon Fleischmann, President and CEO of Potpourri Group, the first catalog company to try to secure an NSA with the USPS, noted that the average two to three month duration of Postal Service promotions precludes many companies from taking part. “We need lead time and no operational constraints,” Fleischmann said. “If we’re really going to run this the right way we may need to plan for additional capacity.”

Rucker—allowing that he’d heard that complaint from other customers who had begged off of USPS promotions in the past—said he would propose that any prospect rate promotion should be able to run for a year’s duration.

Rucker’s primary stumping point in front of ACMA members today, however, was to sell them on NSAs. He said he had been given a goal by Postmaster General Patrick Donohoe to either sign a new NSA every day or bring in 365 within the year. Rucker admitted that he’s sorely behind in his goal and understands that mailers fear the legal costs and the regulatory review of NSAs that require the publishing of possibly proprietary company information on the website of the Postal Regulatory Commission.

Rucker tried to sell catalogers on the proposition that the potential payoff of an NSA could be worth the extra effort needed to secure one. “Discounted rates for prospecting—that can be done with an NSA,” Rucker said, emphasizing that it’s a negotiation. “We are willing to say, ‘What can we do to help you prospect?’”

In turn, Rucker said that he’d be looking for minimum five- to seven-year agreements, as well as for help in achieving the Postal Service’s goals to grow its parcel business. “Packages should be part of the NSA,” he said.  “If we gave a discount on packages, we’d want to figure out how to maximize our business with you and [minimize] your spending with my competitors at UPS and FedEx.”

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