DMA calls on distributors to speak up on USPS issues.
By Sarah Lerow
On June 30, The U.S. Postal Service (USPS) raised its rates for the third time in 18 months. Undoubtedly, this increase was felt throughout the printing industry, but perhaps the first place one would experience the impact is in the realm of direct mail.
The biggest problem for distributors, according to Ed Gleiman, a Washington-based consultant to the Direct Marketing Association (DMA), New York, is that the rate increases have exceeded the rate of inflation. "It is troublesome for any businessperson to have one of his or her major costs of doing business go up. Postage has become an increasingly larger portion of total overall budgets in recent years," he said.
However, the reach of the USPS, which generates nearly $70 billion a year and employs more than eight million people, extends beyond the offices of distributors. "There are more than 8 million people who depend upon the USPS to operate their businesses, including direct mail companies, ad agencies, publishers, printers and printing equipment and paper manufacturers. Even companies like UPS and FedEx rely upon the Postal Service to deliver catalogs and solicitations so that people will buy the products that they deliver.
"According to a study conducted by the Mailing Industry Task Force—a group of private sector executives and senior post office officials—this adds up to about $900 billion in revenue, which is 8 percent of the gross national product," said Gleiman.
As such, Gleiman considers the USPS to be a significant aspect of the economy that is currently being threatened by some very weak financial underpinnings. "The USPS has a substantial amount of debt and some unfunded liabilities facing it over the next decade," he said.
Thus far, the solution has been to increase rates. However, increasing rates doesn't necessarily solve the long-term problem. "When rates go up, companies cut catalog pages, or trim sizes are adjusted. They'll do anything to keep within their budgets. But, if the cataloger puts a lighter piece in the mail stream, the post office gets less revenue. Even if it raises rates it will wind up no better off than it is now," said Gleiman.
According to Gleiman, there has been a considerable, though unsuccessful, effort over the past few years to move legislation regarding the USPS debt through Congress. Since the House of Representatives has failed to agree on what should be done, Senator Susan Collins (R-Maine) introduced legislation on July 22 that calls for the installation of a commission to study the future of the USPS and make recommendations.
Unfortunately, a solution isn't necessarily just around the corner. In fact, Gleiman doesn't anticipate that Senator Collins' bill will make it through Congress this year. "The bill was just introduced, and given how late it is in the year, how much Congress is dealing with and the fact that it's an election year, I think it's a long shot that the bill would see any action before 2003," he said.
All that aside, Gleiman noted that President Bush doesn't need legislation to establish the commission. He has the authority to issue an executive order and establish the commission on his own should he so choose.
Ultimately, what the president and Congress decide to do will reflect the opinion of the public. In order to have a voice and impact in this issue, distributors need to be involved with the decisions as they're being made. To do this, Gleiman suggested attending a DMA-run program called State Days in which DMA members from selected states are invited to meet their congressional delegates and discuss concerns of the direct marketing industry.
He also recommended perusing the DMA Web page—www.the-dma.org/postal-reform-now.com—which has information regarding legislation, press releases, a sample grass-roots letter that can be sent to politicians and state- and district-specific statistics on the revenue generated by USPS-dependent businesses and jobs.
Because distributors of direct mail have such a vested interest in a viable postal office, it is essential that they take an active interest in the politics surrounding the issue. "Members of Congress hear personal complaints from constituents but tend to be less aware of the impact the USPS has on businesses," said Gleiman. "Distributors should take this information and talk about the broader business implications in their state or congressional district."
Ed Gleiman is a Washington-based consultant to the Direct Marketing Association (DMA), New York, and former chairman of the Postal Rate Commission (PRC), specializing in postal issues.
Net News
Online Resources
The following are useful direct mail Web sites that offer anything from ideas for an exciting mail campaign to information on postal service reform:
• www.the-dma.org: Run by the Direct Marketing Association (DMA), this site has lists of conferences, seminars, professional development tools, industry information, postal reform information, research, statistics and government affairs.
• www.insidedirectmail.com: This is the online version of Inside Direct Mail, the newsletter that brings monthly access to the secret world of direct mail. It features articles on offers, lists, testing, copy and design, customer retention and more as well as access to the Who's Mailing What! Archive from January 1994 to the present.
• www.accutips.com: The Accutips site features articles on data selection and mailing lists, e-mail marketing, Web marketing, how to create successful direct mail campaigns, case studies, market and focus trends and sales and marketing.
• www.horah.com: The Horah Group is a direct mail production agency that specializes in direct marketing promotions from database marketing to postal regulations. Tools on this Web site include a library, recommended books, articles and an e-mail newsletter.
Education
Informative Seminars
The following seminars are offered at the Direct Marketing Association (DMA) headquarters in New York.
• The Basics of Direct Marketing, offered Oct. 7-9, will teach the basics of direct marketing.
• Winning Direct Mail, Sept. 26-27, will teach how to get envelopes opened, mail read and products and services sold.
• Copywriting for Traditional and New Direct Marketing Media will be offered this fall and will focus on how to develop and write traditional and online copy that sells.
For information, call (212) 790-1500 or visit www.the-dma.org/events.
Literature
Worthy Reading
Look to these books for helpful tips on better direct mail business:
• Secrets of Successful Direct Mail, Richard V. Benson. ISBN: 0844231789
• An Eye for Winners: How I Built One of America's Greatest Direct-Mail Businesses, Lillian Vernon. ISBN: 0887308791
• Direct Marketing Strategies and Tactics: Unleash the Power of Direct Marketing, Herschell Gordon Lewis. ISBN: 0850132207
Direct Mail Basics
Whether it's along the side of the road or on a personal computer, the attention of the consumer is constantly being diverted by the clamor of advertising. Fortunately, the din subsides on the sidelines with a quieter form of advertising—direct mail.
In fact, Richard Goldsmith, president of the New York-based The Horah Group, noted that one of the most appealing aspects of direct mail is its ability to be personal yet unobtrusive. "People can't determine when they're going to see a billboard or hear an advertisement on the radio," he said, "but with direct mail they have complete control over if and when they want to see it. They can discard or keep it and look at it when they want to."
Goldsmith also noted that direct mail can be discreet. "When a company runs a survey through direct mail, nobody has to know, thus making it very easy to test different offers," he said.
Currently, the most significant problem with direct mail is increasing postal rates. To save on costs, Goldsmith said that companies need to send mail more efficiently. One way to accomplish this is to mail fewer pieces and be selective of who receives them. Goldsmith suggested using data to profile current customers and then sending the solicitation to those with similar characteristics.
As with virtually any product in the business forms industry, direct mail can be complex, so Goldsmith discouraged distributors from selling it without training. He suggested beginning by attending seminars on the basics of direct marketing and direct mail. "If a distributor simply pretends to know what he or she is doing, then a lot of money will end up being wasted."
Undoubtedly, the distributor intent on selling direct mail will have to expend some effort. "It's a process that involves an investment. Fortunately it will be paid back many times over," concluded Goldsmith.
Richard Goldsmith is president of The Horah Group, New York. He can be reached by calling (212) 921-4521.
- People:
- Ed Gleiman
- Sarah Lerow
- Places:
- New York
- Washington