For years direct mail has been an important component in an integrated marketing plan. In fact, many businesses utilize the United States Postal Service for direct mail as their primary marketing effort and source for generating new business through sales letters, postcards, catalogues and more.
As the United States Postal Service (USPS) continues to suffer financially, the risk of postal service cutbacks or even the potential shutting down of complete services is a real possibility. The U.S. postal system is teetering on the edge of financial collapse and risks going completely broke by fall 2012.
A potential shutdown of USPS services would be devastating to millions of residential and business communities that depend on mail services, as well as businesses that rely on direct mail to market their products and services. As Congress steps in to help the USPS remain solvent, officials are working to make major changes to the agency’s structure that marketers should be prepared for as they form future direct mail marketing plans and strategies.
Potential Financial Default of United States Postal Service
The trend of consumers and businesses moving their marketing efforts online with the use of email, rather than traditional “snail mail”, has contributed to a steady decline in the United States Postal Service. The rise of email, electronic bill paying services and online catalogs has caused mail volume to plummet in recent years. It is estimated by USPS that the number of mail pieces processed is down 22 percent from just five years ago. And this decline is predicted to continue to plunge.
Revenue setbacks from less mail deliveries combined with increasing costs for USPS facilities and work force expenditures has resulted in a $9.2 billion deficit for the 2011 fiscal year. Officials with the U.S. Postal Service warn that by early 2012 the agency will run out of money to pay employees and continue operations.
According to postmaster general Patrick R. Donahoe, “Our situation is serious and if Congress does not act we will default”. Unless Congress takes emergency actions with financial assistance the U.S. Postal service may have to shut down entirely by winter 2011/2012.
Some of the proposed actions to make the U.S. Postal Service more solvent include:
- Eliminating Saturday mail deliveries
- Closing more post office locations (3,700 locations are already slated to close in 2011)
- Decreasing the number of sorting facilities from 500 to only 200
- Downsizing the USPS work force by 220,000 workers from 653,000
Impact on Direct Mail Marketing if U.S. Postal Service Cuts Back Services or Shuts Down
Many of the proposed changes to the current structure of the U.S. Postal Service are likely to impact how residents and businesses send and receive mail in the future and how marketers utilize the United States mail system.
Direct mail marketing programs will need to be adjusted to accommodate potential changes or restrictions such as:
- Less mail days with the potential elimination of Saturday deliveries
- Longer mail processing times with reduced work force to process mail
- Cost increases to make up for revenue shortfalls
While these new changes are meant to save the U.S. Postal Service from financial shutdown, it is possible that revamping the structure and services offered with USPS will also bring about new marketing opportunities for businesses beyond direct mail.
The United States Postal Service is considering some innovative ideas that will create new revenue streams and make their mail services a more viable option for businesses and consumers in the future. Ideas include adding the ability to deliver alcoholic beverages, giving the green light to commercial advertisements on postal trucks and within post office locations, supplementing FedEx and United Parcel Service (UPS) deliveries and expanding their hand-delivery and shipping services.
While the current uncertainty about the future of the United States Postal Service and their financial problems remain, positive changes that adapt the agency for future growth and stability will likely keep direct mail marketing a viable option in the years ahead.
Sources:
- USPS.org
- NYTimes.com
Diane Seltzer - Diane is a branding, pr and social media marketer with experience ranging from advertising to corporate marketing and consulting.
