Marketing Mail in a Competitive Market

Third Sector reported the results of a TNT Post announced the results of a survey that it conducted in Great Britain on the effectiveness of mail for gaining contributions by mail.   The results illustrate not only why mail is an effective marketing tool for non-profits but also how postal operators in competitive markets work to expand sales. Findings of the TNT sponsored study One-third of people who make donations to charity are prompted to do so by receiving direct mail from the organization. 57% of those who respond to mail appeals respond by mail. 87% of those who want more information get that information on-line.  Only 10% use the mail [...] Read more »

The Future of Print: Oxford English Dictionary

Anyone who has been to a public or college library, has seen the Oxford English Dictionary right in the middle of the reference section.   Often, the dictionary was displayed on its own stand that almost looked liked a preacher’s lectern thereby suggesting some form of reverence for the English Language.  What is usually displayed is the one-volume edition, a mere subset of the multi-volume Oxford English Dictionary. This weekend, the publisher of Oxford English Dictionary announced that the next edition will be published in digital format only.   Until now the Oxford English Dictionary had been available in both the bound and digital format.   The one volume edition will remain in [...] Read more »

The Recovery and the Post

The GDP numbers released last week were disappointing.   Yet, the numbers for the Postal Service and advertising in general were not that bad.  Why is that?    It is simply that sales to domestic purchasers — which include consumers, businesses and the government — rose 4.3%.    An an industry that depends on its ability to grow the sales of firms that sell products and services to consumers and business, having customers whose business is growing faster than the economy is good news. So why does the economy seem to be slowing down?   The reason is four fold.  First, Americans are not purchasing domestically made goods.   Nearly every sale in the [...] Read more »

Categories: Uncategorized - Tags:

USPS July Preliminary Financials: Oh the Questions They Raise

The Postal Service filed their July 2010 preliminary financials with the Postal Regulatory Commission and the results raise more questions about its financial viability and its ability to develop realistic financial plans. What should the financial target be to ensure financial self sufficiency?  If accounting break-even is not sufficient, then what operating margin is required? Why is the workers compensation expense greater than plan for two years in a row?  It required a $718 adjustment in 2009 and is $1,593 million greater than plan this year.   Is the problem with the Postal Service’s forecasting approach or is it because properly forecasting workers compensation would require presenting non-GAAP financials prior to [...] Read more »

Are the Postal Service’s Earnings Forecast Too Optimistic?

Readers that are expecting an answer to the question in the title will be disappointed.   The truth is I do not know.   However, I do know that the most recent forecasts, or at least those contained in the exigent rate case are woefully out of date even though they are at worst 6 months old. The problem with the financial projections does not lie with the Postal Service or those that are responsible for their development.   At the time the forecast, they represented the best understanding as to the near term (under 2 year) prospects for Postal Service revenues and costs given the economic data and management plans at the [...] Read more »

Leaving the Mailstream: Verizon

Today, Verizon launched a campaign to convince more residential phone customers to both receive their bills electronically and pay electronically.   The press release combined by an analysis of Verizon’s most recent financial statements provides some useful details that explain why transaction mail volumes are decline so fast. The number of Verizon’s wireline (traditional) phone residential customers are declining rapidly.  In the 2nd quarter of 2010 Verizon had 17.4 million residential customers, 11.4% fewer than a year earlier.  Some of this decline reflects shift toward phone service provided by the cable company or on-line services like Vonage but most of the decline reflects residential customers unplugging from the traditional phone network. [...] Read more »

Why Extending the Tax Cuts for High Earners Makes Little Sense for Mailers

Currently there is a major argument over whether the Bush tax cuts should be extended for those  earning high incomes.  The argument is being fought on traditional left-right, Democratic-Republican lines.  While some argue that raising rates on the highest earners will hurt job creation, I am not persuaded by that argument for three reasons.   First, it is not clear that the increase in marginal rates will affect the willingness high-income earners to work especially when individuals face real concerns about the risks they face in order to generate income now until they retire.   Second, the deleveraging of America means that marginal increase or decrease in income has a lower impact [...] Read more »

The Definition of the Postal Market

In its most recent post, Hellmail announced an upcoming shift in its direction.  Until now, Hellmail has focused on providing news and commentary on Royal Mail and its competitors in Great Britain and to a lesser extent postal operators and technology throughout Europe.  In early 2011, Hellmail “will see the expansion of what it does and the areas it covers.   … Whilst ‘post’ will remain a central theme, this blurring of communications will be reflected in its output with a broader coverage on EU regulation, World communications, new markets and products.“ What does this change mean for how postal markets are defined? The market includes both national posts and [...] Read more »

Why the Exigent Rate Case Should Not be Approved

I have tried to avoid commenting on the exigent rate case up till now.   I have long held that the Postal Service can no longer hold accounting break-even as the standard for financial self-sufficiency.  Over a year ago I wrote that financial self sufficiency requires an operating margin of 10 to 15 percent and until the Postal Service manages its business with that goal in mind it will be in a continuing state of crisis. In addition, I have written that the decline in First Class mail, and in particular single-piece First Class mail will impose significant costs on the Postal Service for shrinking its workforce and network that should [...] Read more »

Is This Blog the Postal Service’s Source of Information on its Customers?

I am honored that this blog has sufficient credibility to allow the Postal Service to quote it to support the Postal Service’s proposal to move Commercial Standard Mail Parcels to the Competitive Products list.  On page 10 of Appendix B of its filing, the Postal Service referenced the post, “Why the Postal Service Matters, FedEx needs it.“ In that post, I noted that a significant share of Standard Mail Parcels were used to deliver parcel delivery services sold by FedEx and United Parcel Service.  My post was based on an analysis of public information gleaned from the Postal Service’s and FedEx’s website which showed that the total volume of Parcel [...] Read more »