• on Jul 14th, 2014 in Pricing & Rates | 7 comments

    No one can accuse the U.S. Postal Service of following the pack. It not only dismissed the strategy of pricing packages based on size as well as weight (referred to as dim weight pricing); it actually plans to lower prices for a good portion of its flagship Priority Mail products.

    Few were surprised when UPS recently followed rival FedEx’s lead and announced it would price parcels based primarily on how much space they take up during transport. The new pricing scheme is expected to generate significant revenue for the two integrators. Industry observers were curious to see if the Postal Service would jump on the dim weight bandwagon, or if the agency saw a better opportunity in trying to poach customers with its simpler pricing scheme. Few predicted the Postal Service would lower prices.

    Not all Priority Mail prices are going down, however. Retail prices on Priority Mail flat-rate boxes will in fact increase by 1.7 percent on average, if the Postal Regulatory Commission approves the Postal Service plan. For example, the small flat-rate box would increase 35 cents to $5.95 on September 7, if approved.

    Still, small mailers could save by printing their own labels either from the Postal Service’s Click-N-Ship online offering, or from PC Postage products, permit imprints, or digital mailing systems. Using an online option moves customers into Commercial Base pricing, where they will get lower prices, on average, under the Postal Service proposal. The biggest price cuts – about 2.3 percent on average – would come in Commercial Plus prices, which require a commitment of 50,000 pieces in a year.

    The Postal Service’s Priority Mail has seen solid growth over the past 3 years (25 percent in revenue). But postal officials have indicated they want to capture more business shippers and this price cut is one initiative meant to attract those commercial customers. Some observers think that, even without the proposed price break, the Postal Service would have won customers from UPS and FedEx once their prices increased. But others suggest the reduced rates might entice even more business customers to try the Postal Service.

    Should the Postal Service lower its Priority Mail prices, keep them the same, or raise them slightly given an expected migration from UPS and FedEx? 

  • on Apr 14th, 2014 in Products & Services | 0 comments

    The U.S. Postal Service is going Hollywood in its latest marketing effort – a new partnership with Sony Pictures as it rolls out the promotion of “The Amazing Spider-Man 2.” This co-branding and multi-channel marketing push for Priority Mail seem to be catching the attention of consumers, even if scaring off arachnophobic philatelists in the process.

    Commercials on television and in movie theaters, ads on the sides of postal vehicles, online and digital promotional banners, and specially designed packages: consumers are getting hit from many sides in this Priority Mail flat-rate-box promotion. And that is the essence of multi-channel marketing -- communicating with your customers in lots of places.

    While not the first cross promotion or even multi-channel effort the Postal Service has tried, this one is notable in a few senses. The Spider-Man image and web on the side of postal vehicles serve as something of a pilot test for selling advertising space on vehicles, a revenue-generating idea explored in many forums, including this blog. What is consumer reaction to images on these iconic vehicles? Would the public accept other images or do they cheapen the brand? Public reaction could help the Postal Service decide whether to pursue other opportunities for advertising on vehicles.

    Also, this promotion is aimed at a younger audience. As with the Harry Potter stamp, the Postal Service is relying here on a pop culture image to resonate with younger consumers and become more relevant among that crowd. While stamps might be a hard sell to digital natives, package services certainly aren’t. Younger consumers tend to shop frequently online or via peer-to-peer platforms, so they rely on timely and inexpensive package delivery. Perhaps a Spider-Man campaign helps Priority Mail become their go-to product?

    Maybe, or maybe there’s more to it than that. Let us know. Do you think cross promotions with popular cultural events and figures help sell the Postal Service brand to a younger audience? What about using postal vehicles as promotion platforms? Should the Postal Service use its fleet to promote nonpostal products or events? 

  • on Jul 29th, 2013 in Products & Services | 9 comments

    The U.S. Postal Service uses a variety of strategies and media – including direct mail, television, radio, and sponsorships – to advertise, market, and promote its products and services. These efforts also help to build brand awareness for the Postal Service. Some campaigns have succeeded, such as the Priority Mail Flat Rate box campaign, “If it fits, it ships®.” Other efforts have been less successful.

    Over the years, the Postal Service has faced an advertising conundrum. Some have complained that a government monopoly shouldn’t be spending money to advertise. Others have grumbled that the Postal Service isn’t doing enough to promote its products and services, particularly compared to its competitors. Certainly, the Postal Service’s current financial condition restricts its advertising budget. Then, there have been concerns about how well the Postal Service has managed and monitored advertising contracts, which one of our audit reports documented earlier this year. The Postal Service took corrective actions and has new contracts in place.

    Undoubtedly, we live in an age of competitive advertising. Every product the Postal Service has faces competition, even the monopoly products. The Postal Service needs to use advertising to promote its products, services, and the brand itself. The question might be: What is the most effective way for the Postal Service to advertise? Should campaigns focus on traditional media, or focus on new media, like Facebook, Twitter, and YouTube?

    The Postal Service’s upcoming launch of an ad campaign might provide insights on the best possible strategy. It plans to kick off a nationwide multi-channel advertising campaign in August to promote its Priority Mail changes, which include a “simplification” of Priority Mail services and a name change for Express Mail. For some customers, the new longer name of Priority Mail Express, and the revised Priority Mail service offerings of 1-, 2- or 3-days might actually seem more complicated than simplified. A successful advertising campaign would reduce that confusion.

    Share your thoughts on the Postal Service’s advertising strategy and its recent campaigns. How effective have they been? What changes would you like to see?

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