• on Oct 27th, 2014 in Products & Services | 8 comments

    There’s an adage in business that it’s cheaper and easier to retain existing customers than to find new ones. It’s been estimated that it costs five times as much to acquire a new customer than to retain ones. This explains why businesses work so hard to keep customers happy.

    The U.S. Postal Service understands the importance of customer retention. It has ramped up its efforts in this regard, including changing its sales organization, enhancing its use of analytics to see where it risks losing customers, and operating customer retention call centers. Still, customer retention is a challenge in an era of shrinking mail volume. While customer defections decreased from fiscal year (FY) 2012 to FY 2013, the magnitude of this ongoing problem is hard on the Postal Service’s bottom line.

    We recently looked at the effectiveness of the Postal Service’s customer retention strategies and explored whether it could do more to keep customers from reducing their postage spend or from leaving altogether. Our report recommended the Postal Service promote organization-wide collaboration and share information on customers at risk of defecting. We also urged the Postal Service to reach out to former customers.

    Interestingly, dormant customer accounts, the subject of a separate audit report, provide an outreach opportunity. While the audit report did not look at inactive and dormant accounts as a customer retention tool, it seems like a natural fit. Dormant accounts are advanced deposit accounts for business mailings that have been cancelled and closed. The Postal Service cancels the accounts following a notification process that occurs after 2 years of inactivity. What if these inactive and dormant accounts were used as sales leads?

    Many of us are accustomed to hearing from our doctors or dentists if we miss our regular checkups. In fact, we welcome the reminders. Could inactive and dormant accounts trigger a similar “outreach” attempt from postal employees?

    What suggestions do you have for customer retention? What does it take to retain a strong and thriving customer base? Or should new customers be the focus as mailing budgets shrink? 

  • on Sep 19th, 2014 in Products & Services | 3 comments

    Mere ink-on-paper advertisements are so last week. Cutting-edge ads, including direct mail, involve interactive features that were once limited to slick websites. How about something the size of a postcard that uses radio waves to send detailed product information to your smartphone and lets you to buy the minute you want to? Or a piece of mail that has an embedded, paper-thin video screen that you can control?

    The first example is called near field communications, the second a type of electronic mail (which is not at all the same as email). They’re just two of 10 technological innovations for enhancing advertising mail that we examine in our recently released white paper, Mail Innovations. One way or another, they each leverage technology to provide far more information about a product – and are far more engaging – than advertising mail of yore.

    Some are already in use. For example, home-furnishing giant Ikea’s catalog contains pages with codes you can scan with a smartphone so you can get a better look at something. Let’s say you’re interested in a particular chest of drawers; scanning the page code puts the dresser image on your screen and lets you “open” the drawers to see inside. This innovation is known as augmented reality.

    New mail enhancements can also transmit relevant data back to the sender – data such as which items you looked at most. This helps the sender tailor future advertising mail to your particular interests. And the U.S. Postal Service is trying to encourage mail advertisers to use these innovative features by offering promotional discounts on postage when they do.

    Let us know what you think. Are you more inclined to open and scan something with an interactive feature? What type of included or embedded innovative technology would hold your attention? 

  • on Sep 15th, 2014 in Products & Services | 10 comments

    The aptly named Business Service Network (BSN) is charged with servicing the U.S. Postal Service’s 23,000 largest customers by addressing service issues, answering questions, and fulfilling other requests. Given the annual postal spend of this customer group – almost $38 billion in fiscal year 2013 alone – it clearly behooves the Postal Service to keep these customers happy.

    But retaining large commercial customers takes more than just putting out fires and answering questions. That’s why BSN employees have been encouraged to reach out to many commercial accounts to gain a better understanding of what customers need and with any luck, they can thwart service problems before they occur. Outreach also builds customer loyalty. And while the BSN’s 300 employees aren’t tasked with selling products and services – the Sales group does that – their face-to-face contact with commercial customers creates a key opportunity to do so.

    Our recent audit of the BSN shows just how valuable customer outreach can be. We found that the customer accounts BSN staff proactively contacted spent significantly more on postal services than those who were not contacted. And we estimated the Postal Service could have generated an additional $382 million by proactively contacting all BSN customers. Our report found other opportunities for improvement, too, such as resolving issues more quickly, collecting more customer feedback, and redesigning the BSN staff evaluation process.

    At the same time, the Postal Service is realizing it needs to beef up the BSN. During a recent meeting with mailer groups, management outlined some planned BSN enhancements. These include streamlining customer surveys, seeking ways to increase “personal” contact with commercial customers, reaching out to smaller customers, and treating all customer issues with the highest level of urgency.

    Share your thoughts on the BSN. What other ways could the Postal Service serve its commercial customers? Are there loyalty programs the Postal Service could try? 

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