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The Path Forward for the Postal Service Loyalty Program

Audit Reports

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    USPS Loyalty Program Cover
Sep
14
2023
Report Number:
23-072-R23
Report Type:
Audit Reports
Category: Retail, Sales & Marketing

The Path Forward for the Postal Service Loyalty Program

Background

The Postal Service’s Loyalty Program helped to foster the shipping business growth outlined in the Delivering for America 10-year plan, with 1.2 million users and over $700 million in revenue since its inception in 2020. The goal was to offer Click-N-Ship users incentives to grow their businesses, drive customer retention, and increase the Postal Service’s revenues and share of the micro business segment. However, the Postal Service found the program did not align with these key objectives, so they sunset the program in June 2023 and intend to announce a new loyalty program for January 2024. Moving forward, applying lessons learned from its prior loyalty program could help the Postal Service drive customer retention, growth, and financial stability as intended.

What We Did

Our objective was to evaluate the USPS Loyalty Program’s performance, customer experience, and management. We reviewed related regulatory filings and business rules, interviewed Postal Service officials, and analyzed user feedback.

What We Found

The Postal Service has opportunities to improve the management of its future loyalty program. For its previous program, management did not set targets to measure key performance objectives, such as customer retention, attrition, or annual revenues. This occurred because officials did not employ best practices to set goals for objective attainment. Going forward, establishing targets at the new program’s start would ensure that management could assess growth and other success measures.

In addition, communication and program design issues negatively impacted loyalty program customer experiences and growth. Customers expressed confusion about how to use the program’s features, such as enrollment and tiers, and credit redemption and expiration. This resulted from the lack of a comprehensive communication strategy to promote awareness and functionality. For program design, customers noted that spending requirements were unattainable. Accordingly, over 90 percent of customers fell short of earning any discounts in fiscal year 2022, with approximately 70 percent spending less than the year prior. The Postal Service is modifying the pricing structure and has an opportunity to design a new program that grows its shipping business by meeting customers’ needs.

Recommendations

We recommend management establish performance targets aligned with key objectives for effective program management, develop a comprehensive communication strategy that promotes awareness for customers, and conduct an evaluation of customer spending requirements and discounts.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

Establish performance targets aligned with the key objectives of a new loyalty program and establish parameters to actively monitor progress for effective program management.

Open $0 Agree
2

Develop a comprehensive communication strategy for a new loyalty program that promotes awareness of functionality for prospective, and once enrolled, ongoing customers.

Open $0 Agree
3

Conduct an evaluation of customer spending requirements and discounts, related to any future loyalty program, to ensure the program's design promotes customer engagement and shipping growth

Open $0 Agree