on May 16th, 2011 in Ideas Worth Exploring | 21 comments
 
Advertising mail is a core product for the U.S. Postal Service. It is an important way for businesses to reach their customers, but many local small businesses and others underuse or avoid advertising mail. The rules, rates, and regulations can be complex and confusing. For saturation mailings, simplified addressing allows businesses to use a simple “Postal Customer” address instead of a full street address. While the Postal Service has tested a number of simplified address products in the past, early this year it rolled out a national product available for all “flat-size” saturation mailings. In a recently released white paper titled Simplified Address Mail: An Easier Way for Small Businesses to Reach Local Customers, the Office of Inspector General, Risk Analysis Research Center lays out the advantages of the simplified address mail concept, which could potentially bring in over $1 billion in new revenue if fully implemented. Among the paper’s key findings:
  • Simplified address stems from the Postal Service’s core, hard-copy mail delivery business and could help keep mail relevant in an increasingly digital world.
  • Adding profitable simplified address mail volume could lower average unit costs and make universal service more affordable for all current and potential mail users.
  • Simplified address makes advertising mail easier to use and far less expensive for organizations that have traditionally shied away from directly using the mail.
  • Simplified addressing has long been the standard practice among foreign posts and often accounts for a significant proportion of their mail volume. The Postal Service has been the sole exception.
The key to realizing all the benefits of simplified address mail depends on how the Postal Service implements the program. It must actively be promoted to small businesses and others and it must be made as easy as possible for customers to use. So, what do you think? Would you be receptive to receiving advertising materials for the restaurants, stores and services in your local neighborhood? This blog is hosted by the OIG’s Risk Analysis Research Center (RARC).

21 Comments


While I agree that any tools that will make the process easier and less costly for mailers would be good for the industry, I am not sure I am sold on the profitability assumed for Simplified Addressed Flats.
Is this going to increase the volume that bypasses machine processing? If so, it could increase the Postal Service's main cost concern - labor, as this volume would need to be sorted and distributed at the DDU, bypassing the automated sortation process. Even if the flats are a separate bundle, there would still be an increase in the street time labor if not in the office.
Also, since we are currently dealing with excess capacity at the processing facilities (allowing much-needed consolidations), this product could exacerbate this problem, and the workshare cost avoidance savings passed down to the mailers could be less likely to help cover the overhead fixed costs the Postal network currently maintains for automated mail.
Another concern is determining how much of the volume would be new, compared to diverted volume from a different class, I am sure some mailers would convert the current volume they mail through USPS if they can reduce costs, but will that result in larger profit margins from others categories of mail being mailed in a way that has a potentially smaller profit margin for the USPS? I am hopeful that this product could be profitable and bring in new volume, but as labor costs seem to be the most difficult to reduce while being the largest portion of the USPS operating costs it seems that the less automation we use, the more labor we will require.

just have no delivery on saturday and come out of the dark ages...or at least stop all walking routes which are arcaic

Note to USPS: street time labor is a variable cost. See above.

As a letter carrier with my own flats strategy (no one cares what that might be), I favor separate bundles with no variation in size and shape. Postal FSS is the wrong FSS.

CHRISTYINTX for PMG!

The most important factor in the sucess of the new EDDM program is for the USPS sales force tocontact new mailers(those not currently using the mail. If they try to convert existing mailers there will be on increase in Standard mail volumes.

EDDM is not a good thing for the postal service nor for the mailing industry. You are looking the wrong direction to make the Postal Service healthy again. Stop EDDM. Stop throwing the mailing industry under the bus. We have worked as partners for years. The mailing industry has created the opportunity for the Postal Service to run more efficiently. We have created the best mailing lists and worked with you to ensure they are the best. We continue to prepare the mail efficiently at your specifications, to create list hygiene and smoother cleaner mail and you want to throw that away? EDDM is not the answer. It does not drive new business to mail, it hurts the integrity of what has already been built. Try another route. This is the wrong one. Listen to the thoughts of MFSA and know that we want the USPS to survive and be healthy and we can do it together!

By taking mail out of the hands of Mail Service Providers, how does that increase the quantity of mail?

Last night I read the OIG report on Simplified Address Mail. The report dismisses industry concerns, overlooks the fact that the Post Office slid this requirement into place quickly and quietly while inflicting damage to some stakeholders. The OIG report fails to acknowledge one of the biggest stakeholder categories impacted by relaxation of addressing requirements -- CDS subscribers. The report does not even mention these businesses. How foolish of both the USPS and the OIG to assume that only the saturation mailers are bothering to maintain CDS lists! In fact, most major saturation mailers do not have their own list. They rent these lists from compilers and list managers who have spent thousands upon thousands of dollars building their CDS files and continue to pay to maintain CDS subscriptions to ensure the lists are current and accurate. The USPS blindsided the list industry by changing the rules without notice and without discussion and overnight major saturation mailers found they were no longer required to rent lists. Meanwhile, CDS subscribers who are in the list business continue to be required to pay dearly to maintain those lists. In fact, the USPS raised our pricing in April. A list vendor who maintains a relatively small list – say 2,500,000 records – for a major metropolitan area can expect to pay $175,000 this year (up $6,250 from last year) for the privilege of maintaining a list that they are now finding extremely difficult to rent to anyone. Our largest customers have been the major saturation mailers and those mailers are happily switching to simplified addressing. Does it create new volume for the USPS when these mailers switch from a resident list to simplified addressing? No. It’s merely discounting their mailings at the CDS subscriber’s expense. To CDS subscribers that feels like unfair competition. The USPS holds all the cards – they can change the rules to suit their needs and there’s absolutely nothing we can do about it. In the long run, the saturation mailers have allegedly vowed that they will mail more if they get to use simplified addressing. Maybe they will; maybe they won’t. We’ll never know because the USPS doesn’t even have a metric by which to determine whether volume has increased or whether any new volume is being generated. How can that possibly meet with the OIG’s approval? How can the success or failure of a program be accurately measured without a metric in place by which to measure it?
The USPS touts simplified addressing and the subsequent new product – EDDM Retail – as the best way to get small businesses to mail while avoiding all those “needlessly complex addressing rules”. They are kidding themselves if they think that’s what the problem is. While they sure make it sound like a great argument in the OIG report, the addressing rules are not what is complex. It’s the mailpiece design requirements, the presort requirements and ultimately the postage prices that drive mailers away from the mail. If these relaxed addressing requirements encourage new mail then that is certainly a “win” for the Post Office and probably for the Direct Mail Industry as well. Again, though, we’ll never know. There is no metric in place by which to determine what is new volume versus what was existing volume that has simply converted to simplified mail due to the rule change.

Ive always hated advertising mail mainly because I think it is a waste of trees but if it is coupons/ promotions of local business, then I do like to receiver the mail. Some advertising mail is this national, generic shot in the dark. Advertising from local companies is different because I could walk or drive their anytime. I love receiving my Sunday paper with coupons to Sweet Tomatoes and Long Horn or just a simple add from Applebees letting me know that in Boynton Beach, Fl they have a half off lunch special. I do everything online now and the only mail I want to receive is some good local coupons and gift packages.

With all the reports in the industry that postal sales people are concentrating their effort on existing direct mail customers, there won't be any increase in volume from the EDDM program. Nice try, but with some of the horror stories coming from MSPs across the country, this program is driving a bigger wedge between the Postal Service and its best chance at growing mail volumes, which is working with mail service providers!

The Postal Service has been kicking MSPs for over ten years. It is time to start looking at who is preparing and delivering mail to postal docks. It sure isn't mail owners! They do not and can not work with your policies, procedures or employees. It is time for the USPS to realize that mail service providers are integral in direct mail marketing and figure out how to partner with us to grow sales. MSPs are the experts in direct mail marketing, not the USPS.

You are supposed to be experts at delivery. But for the last few years you have even failed at that! The only way the Postal Service is going to grow mail volume is if we do it together!

The item the OIG has not addressed in the simplified mail program or EDDM, as the Postal Service is calling it, is the potential loss of revenue. The Postal Service has gone to great lengths to ensure that not one single penny drops through the cracks at any bulk mail acceptance unit--even at the expense of mailers. Most all small offices were deemed "non" acceptance units recently and mailers who chose to continue to mail were forced to drive to larger offices. Most of the mailers, churches or others with only a few mailings a month were forced to revert back to paying full price for postage, while the offices that absorbed the mailings increased their workloads and were subject to audit after audit about such trivial things as where they set the mailings after they were accepted. Now, to increase bulk mailings the Postal Service will allow every Tom, Dick, and Harry--permit or not, to walk up to the retail window and drop off a mailing and just hand the window clerk the money for the mailing??? ARE YOU KIDDING??? While the freaking auditors are coming in the back door checking on the pennies from the other mailers? What gives? The window clerk has NO bulk mail training. They know NOT what to charge. Some of the Postal Service window eqipment does not even have an account identifier code to put the money into--IF the clerk chooses to do so. There is NO placard produced to put on the mail--that the AUDITORS IN THE BACK ARE LOOKING FOR ON THE REST OF THE MAIL. Another example of the right hand not knowing what the left hand is doing, but in the case of the Postal Service, it is "not caring" instead. Same 'ole, same 'ole.

Well, I'll put the unpopular comment in on this thread. I'm still reading on the process but I think the concept is ABSOLUTELY GREAT. Our office lost a large portion of our bulk mailers a few years back with price increases. Then all but one dropped off when they had to travel to another office to process their bulk mailing.
We lost revenue with these decisions.
Now? we (the rural office - so identified as losing $$) can not only bring revenue back to the small office they can provide a SERVICE to the small businesses in our area. I am trying my best to have a better understanding to explain this to all those customers we lost and have a handfull of customers I want to advise that I believe will help their businesses.

My only complaint is EDUCATION. I can't find anyone to explain. Yes, I understand the basics but I have questions. I get emails telling me, I get websites to explain whats offered and I have questions. I have questions that I want answered before I pose this to my customers.

Provide a contact number to a product expert!

For those doubters, naysayers . . . the back bone of American is NOT Corporate America it is the small business.

Here's an example of what is going on - The Wrong Way to Sell EDDM http://www.intelisent.com/postalaffairsblog/?p=2914
Poorly trained and misguided sales force down-selling current products. Per USPS leadership at MTAC, they are not monitoring to make sure that the revenue coming in from this program is new revenue. Last but not least, if it takes a contest with a trip to Las Vegas for the winner to motivate the USPS sales force, especially with the financial situation of the Postal Service the way it is, maybe the USPS needs new sales people. Or better yet, they should rely on the serious and capable sales force of motivated Mail Service Providers.

Lisa Bowes is absolutely correct. This is not new revenue. It will appear as if it is and the offices that lose the revenue will be punished probably by the usual means of intimidation while poorly trained "sales" force employees are out wasting Postal $$$ trying to sell a product that is already sold for less money--only to different mailers. We (the Postal Service) could solve the unemployment problem overnight if you only counted the number of detail positions we create for ourselves trying to cover positions that don't need to be covered, made, sold, etc.

OK Here's my comment. I live in Pittsburgh in a neighborhood. So, I have family or a friend that lives near here. I usually see them at least once a week. I could close my mail box and use their address
as a delivery point. Since 95% of the mail I get is junk mail.
The junk mail folks will remove may address from the list because
they don't do duplicate addresses. Every week, I pick up the relevant mail (two or three letter's) (term relevant is questionable), and
visit my family or friend. The taxing authorities, by virtue of their electronic real estate records, verify the existence of my physical biometric address. If everyone in my neighborhood does this, there
could be hypothetically 25% less stops for the carrier equating to
less carriers & less time.
The problem with this concept is the same problem with government.
More duplication creates more jobs and more work. It's a problem that technology has conquered, but the draconian leadership simply won't change, ultimately resulting in collapse.

Interesting article, but from observation, it seems like a big part of new business is in the online purchasing area. I have always liked the personal service of the Postal Service employees,you get to know your carrier and they are always helpful. UPS drivers are also helpful but not as well know as the mail carrier. So I guess I wonder why the Postal service doesn't try to compete more with UPS and Fed Ex. I think with a little more computer tracking that the postal service would win hands down.

The story below shows another of the possible uses for Neighborhood Mail. This type of thing could become more common if Neighborhood Mail was known by every American and it was easier to do from your home computer.

A DOG-GONE GOOD IDEA
CUSTOMER USES EDDM TO AID IN SEARCH FOR MISSING PET

Randi Slocum with Kaylee.
When Randi Slocum’s dog Kaylee ran away from her Stillwater, NY, home, Slocum and her friends did what any group of concerned pet owners would do — they formed a search party and knocked on neighbors’ doors looking for the chocolate Labrador mix.

But Randi’s mother, Carolyn, had a better idea — use Every Door Direct Mail (EDDM) to notify residents in Stillwater and nearby Schuylerville, NY, of the dog’s disappearance.

Carolyn Slocum, a board member of the local Postal Customer Council, had just attended an EDDM seminar given by Albany District Grow Your Business Coordinator Natalie Dolan. “I knew that the best way to reach every household was through the new EDDM program,” said Slocum. “Since many people work all day, this would be the most likely way to reach them.”

By the next morning, Carolyn had the mailings prepared to EDDM standards and dropped them off at the Stillwater and Schuylerville Post Offices. The flyer helped unleash a series of phone calls, and that helped lead to Kaylee’s safe return.

waste of trees? guess what - because you are receiving things in the mail (and paper is being printed) it has actually made it so much better http://printgrowstrees.com/facts.html

I pitched something which may be similar to Simplified Address which I called the Virtual Address. The virtual address the 9-digit postal code and adds two digits to specify the house and then a PIN code for each recipient with a household so that you have . Marketing has renamed this the Universal Address.

The premise goes a few steps further than what I understand is meant by the Simplified Address in that advertisers no longer need to know where you live - your privacy is protected. Only USPS would know your address. But since we don't correlate people with the address, your privacy is truly protected. The virtual address is a routing mechanism for physical and digital communications (mail, packages, messages, etc.). Each virtual address would have a profile associated with it, which consumers can customize with mailing preferences, to borrow from the Mail My Way concept by Steve Dearing.

Advertisers no longer need address lists or address databases, since all they need is a set of virtual addresses with the profiles of the right demographics they're targeting. Likewise, address data would no longer be stored in numerous systems on the Internet and could no longer be used to validate identities. You take away the honeypot and you take away the incentive for such data to be stolen.

Combining the virtual address and Mail My Way would allow senders to convey messages or send items to recipients to the routing mechanism and based on the item, be it physical or digital, and based on the recipient's preferences, the item would be passed to the appropriate channel, be it a digital device, a mailbox, an e-parcel locker, a digital vault, etc.

If this is what is meant by Simplified Address, then, yes, this is definitely something USPS should be doing. When I pitched the idea to Vint Cerf at Google last summer, he agreed that it has the prospects of being a game changer.

Direct mail is basically used to build business and it is well suitable for small business groups. It is an important way for businesses to reach their customers, but many local small businesses and others underuse or avoid advertising mail.

I think advertising by mail is almost a forgotten art form that because it is done a lot less these days is actually becoming effective again i wonder if this simplified system will reinvigorate the industry, from my marketing back ground i think the system will be great and i would instruct my clients to take advantage before everyone else does.

Simplified Address Mail is definitely very helpful to all companies providing direct marketing companies. From March 2012, United States Postal Service has now also started encouraging small businesses to increase the use of bulk mailings. As said in the article, the Simplified Mail makes the whole mailing process really simplified.

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