• on Feb 18th, 2014 in Strategy & Public Policy | 19 comments

    There’s no lack of opinions in Washington about what the U.S. Postal Service should do to get out of its precarious financial situation. Cut this, add that, restructure these, and so on. But what about the public? What do Americans want - expect - from the Postal Service?

    Our office commissioned focus groups across the nation, speaking with scores of people young and old, from rural areas and big cities. The goal was to gauge perceptions of the Postal Service to understand what Americans not only want from the Postal Service, but also need from it. The results are compiled and analyzed in our new white paper, What America Wants and Needs from the Postal Service.

    One key finding was that (a), many participants mistakenly believed that the Postal Service receives taxpayer funding, and (b), when they learned the Postal Service is in fact self-funded, much like any other business, nearly everyone’s views and expectations began to soften, allowing for greater flexibility and compromise on service.

    Overall, we found that Americans were most willing to accept a reduction in a particular service they are currently pleased with. For instance, most rural participants were open to – even excited by – the possibility of shifting to cluster box delivery because it could provide more security in locations where mail theft and mail box vandalism are common. Reduced number of delivery days was also acceptable to almost all participants.

    Among other key findings, all but two of the total 101 participants said they would, in general, be affected to some degree if the Postal Service were to disappear. And rural participants viewed post offices as community centers, while urban participants saw them as a convenience.

    The big take-away: We found that what Americans need from the Postal Service is much less than what they want, and they are willing to make trade-offs to maintain a certain level of service. What America Wants and Needs from the Postal Service [link] details the trade-offs, highlighting some of the different preferences that emerge when urban and rural populations are compared. And yet, among the differences, a common theme is also evident – Americans still value the Postal Service.

    Tell us your thoughts:

    • What do you need and want from the Postal Service?
    • Did you know that the Postal Service is self-funded?
    • Does that knowledge affect your opinion or expectations regarding Postal Service services? 
  • on Feb 10th, 2014 in Strategy & Public Policy | 30 comments

    Hold everything, folks. That’s the recent message from the U.S. Postal Service on phase two of its network consolidation plan and associated changes to service standards. The Postal Service has delayed the second phase, which was set to take effect this month.

    The Postal Service launched its consolidation plan – the Mail Processing Network Rationalization Initiative – in 2011 as part of a larger $20 billion cost-reduction strategy that seeks to realign the size of the postal network and workforce with reduced mail volumes. In phase one, the Postal Service targeted 178 consolidations. It also adjusted service standards for certain types of mail. For example, the Postal Service significantly reduced the overnight delivery area for First-Class Mail and cut in half the geographic reach of 2-day delivery.

    Phase two planned to eliminate overnight delivery of First-Class Mail and consolidate another 89 facilities. Current processing operations were designed primarily around providing overnight delivery of First Class Mail, the product line that is in steepest decline. So at some times in the day, mail processing machines sit idle. Without the constraint of overnight standards, the Postal Service would have a more flexible operating schedule, allowing for higher efficiency and lower costs.     

    Customers have mixed feelings about network consolidation. On one hand, mailers support reducing costs and eliminating excess capacity. It makes no sense to pay for unused capacity. They also understand the need for the Postal Service to have greater operational flexibility. On the other hand, a reduction in service standards acts as something of a de facto price increase: Customers are paying the same for reduced service.

    Further, some mailers are suspicious that these kinds of efforts, such as the latest proposal to add a day of service to some drop-shipped Standard Mail and Periodicals, are merely shifting postal costs onto their backs. They support approaches that reduce total combined costs. Other stakeholders, such as the American Postal Workers Union, have raised outright objections to changes in service standards.

    We want your thoughts:

    •  Should the Postal Service continue with phase two as originally outlined or does it need to make adjustments?
    •  Are changes to service standards a reasonable trade-off for lowering overall postal costs?
    •  Can the Postal Service afford premium service standards in a time of declining volume and revenue?
    • How do the changes to service standards affect you or your business?
    • Have you seen an increase in mail delays or service problems due to network consolidation?
  • on Feb 3rd, 2014 in Products & Services | 16 comments

    Most postal pundits agree the U.S. Postal Service can’t cut its way to prosperity. It needs to generate new revenue to succeed over the long run. But whose job is it to sell the steak as well as the sizzle? The postmaster general? The Postal Service sales staff? Postmasters, clerks, carriers? Yes, yes, and yes. It would seem everyone has a role to play in reaching out to potential new customers.

    Think about it. No one knows the Postal Service’s products and services better than postal workers. They also have daily contact with customers and they know their local communities extremely well. These factors present a huge opportunity to tap burgeoning markets, such as the 23 million small businesses in the country, as our audit indicates.

    The Postal Service has established a variety of initiatives to target small businesses, such as Every Door Direct Mail, the No Business Too Small online portal, and Business Connect. Every Door Direct, which encourages mom-and-pop stores to use mail to expand their customer base, has been extremely successful. On the other hand, Business Connect, an effort to harness postmasters’ knowledge and connections in their communities to generate sales, has had a harder time gaining traction. Our work suggests there’s a lot of potential for revenue growth from Business Connect that has yet to materialize.

    One problem could be incentives, or the lack of them. Postal employees, like most workers, are probably more likely to prioritize their tasks based on what their managers emphasize and reward. In that respect, many postmasters feel enormous pressure to keep workhours and costs down while keeping service up. So this might be their primary focus. Without the right incentives to encourage sales and customer outreach, motivation might be lacking.

    Another problem could be training, or the lack of it. Many employees have never been trained in sales and still others are probably not particularly comfortable with that role. Is the Postal Service providing employees with the training and skills they need when they are asked to reach out to customers in programs such as Business Connect?

    Selling the business is to the advantage of everyone who works for it. But if the Postal Service wants to institutionalize this responsibility and require that its employees reach certain targets, then proper incentives, training and support are critical.

    Should postal workers be required to “sell” the Postal Service? Would a system of financial incentives, such as those used in the private sector, work best, or would another type of reward be more effective? 

Pages