The Check is NOT in the Mail

I attended a Direct Marketing Association conference last year that felt more like the "Online Marketing Association" versus the typical direct mail cheer leading sessions of yesteryear. it used to be that the USPS Postmaster General addressed the DMA with everyone hanging on his every word. There was an air of stability to the whole scene.

John Potter, Postmaster General, struck a different tone on Tuesday. It was direct and unvarnished. He talked about the staggering shortfalls in postal volume and revenue -- and the need for immediate and drastic change.

"It's reflective of a macro change in how society communicates." Potter stated, referring to the dramatic change brought on by online and digital technology.

This wasn't some little internal study either. Three big consulting firms played major roles: Boston Consulting Group (BCG), Accenture, McKinsey. This was big and serious.

The main story line in the press had the USPS predicting mail volume would fall 15% from 177 billion pieces in 2009 to 150 billion pieces in 2020; closing branches and limiting delivery to five days a week.

What wasn't widely reported were some darker statistics:

* BCG surveyed different groups to make their forecasts. Commercial mailers predicted a 15% drop in their volume, likely anticipating their own plans to move to online bill payment and outbound email. Consumers predicted a drop of 22% based upon their personal use of the mail system. BCG then used something called the "Broadband EU Leader" trend to project a 34% drop in volume by 2020. The last trend being more than double what the press reported.

* Real Revenue per Delivery Point is predicted to plummet by almost 50% by 2020 -- from $1.80 today to a $1.00 in 2020.

What are the implications for marketing?

1. Get used to a constant drumbeat of higher postal rates and lower service levels as we march toward 2020

2. Expect ROI for mailed campaigns to be increasingly harder to hit as rates increase

3. Make sure your lists are up-to-date and squeaky clean. Smaller micro-targets will become the norm vs. the exception as mailers seek to mine pockets of gold in their lists

4. Prepare now to transition your corporate and channel support programs online. The Ad builder system for your channel partners needs online options now to anticipate the trend and get them comfortable with those options (local online search, email, online video, text messaging, local Facebook campaigns).

The sooner your channel starts thinking this way the better. Your leadership from marketing is critical. The check is no longer "in the mail".