Driving Direct Mail research

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Mail Users ForumOct 8, 2003Getting to
yesWorking together to improve efficiency and
success Bryan Cassady32 485 027
355bryan_at_postal-solutions.com
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To stimulate ideas and discussion about how
leading mailers and the postal services can work
better togetherLike it or not we are in this
together for the foreseeable future
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The Postal Services today

• Mail is losing share of total media spending
• In the period 1997 to 2002 mail volume vs, total
  media spending fell 48
• Countries gt 100 / year media 27
• Countries lt 100 / year media 44
• To cover these losses, postal rates are on the
  rise

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La Poste is re-organizing all their business
logistics
Royal mail is losing 1 million per day
Franklywithout action and change the future
doesnt look bright
The credit ratings of Europes 2 largest posts
has just been downgraded
Direct Mail Response rates are down
Advertiser satisfaction is at new lows
The Belgian Post just received a bail-out
from government
Hundreds of thousands of jobs need to be cut in
the postal sector
Internet marketing Will go up 500 overthe next
5 years
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If your only tool is a hammerevery problem is a
nail
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Rationalizing the business
Cut-backs In service
Lower volume
Business Pressure
Lower margin
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Customer Ratings (Good, Excellent)
Source 362 Advertiser interviews Postal
solutions 2002
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Customer Ratings (Good, Excellent)
Putting things in perspective 48 fair, poor
34 fair, poor
Source 362 Advertiser interviews Postal
solutions 2002
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More of the same wont get us where we need to
goCrises are an opportunity for creativity and
change
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A new way of working together

• Based on getting to yes principled framework
  for problem solving The Method
• Separate people from the problems
• Focus on interests not positions
• Invent options for mutual gain
• Use objective criteria to evaluate success
• And my addition to the list
• Keep things simple

Authors Roger Fisher, William Ury
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Real Negotiation is about creating a composite,
shared vision of the desired out-come. Getting
every aspect of the conflict in the open is
essential A proposed framework for discussion
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Primary Interests
Mail Advertisers
National Postal Services

• A fair margin on mail delivered
• Mail that doesnt hurt business efficiency
• Extra mail volumes
• Mail as a media of choice

• Mail as a more profitable media
• Price
• Data to target better
• Reliable delivery timings

The Postal Service need more mail
volumesAdvertisers want to mail more when they
make a profit
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Mail Volumes are what drive operational
efficiency70 of costs are fixed or quasi
fixed costs what is the cost of an extra letter
in a postmans bag(not much)
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There is more than price !
What would the impact of the following be on the
volume of mail you send ?
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Looking good and using sound bites are empty
substitutes for sharing truth. Full disclosure
is the keystone on which progress is made
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Must haves
Mail Advertisers
National Postal Services

• More than just price reductions
• Business activities with some sort of a future
• Fit with regulatory restrictions (they are
  usually required to offer similar services to
  similar companies)

• Some sort of guarantee/ security that they will
  get the services they paid for(sideline did you
  know the sales conditions of the many postal
  services still say they are not responsible for
  delivery !)

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BATNA (Best alternative to a negotiated agreement)
Mail Advertisers
National Postal Services

• Loss of mail volumes

• Use other media

For both sides negotiation is working together is
better than the alternative
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Potential Issues
Mail Advertisers
National Postal Services

• Legislation
• Internal barriers to progress
• Too many issues make it hard to focus

• Trust
• Timing and speed
• Lack of a common voice due to diversity of needs

Both sides need quick wins to build commitment
and confidence
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Objective evaluation criteria

• The impact on mail volumes
• The impact on the share of total media spending
• The impact on mail volumes next year

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Ideas for mutual gain

• Matching the needs of senders of advertising mail
  to the costs of the postal services
• 2 day delivery (it doesnt matter usually)vs. a
  known day of delivery (this does count)
• Investing in the future of direct mail
• Best practice education
• A mail media center (like in the UK)
• Investing in data to make direct mail work harder
  for mailers
• Hygiene data, Opt-in/Opt-out (Like the
  Interessebank), Bereavement
• Doing something/ anything now

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As you move forward it is important to
remembercomplexity usually feels safer.Keep it
simple and good things will happen
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3 simple ideas

• The Postal Service and advertisers need to agree
  a basic quality of service agreement
• Mail is a media - nothing more, nothing less
• We need to stop talking about price, price and
  price we need to talk about value

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Todays discussion

• How do we open a dialogue about improving the
  competitiveness of direct mail with other media.
• How can we get out of the cut and die cycle ?
  Growth of direct mail is possible, but
  investments need to be made
• 3 ideas for mutual gain that can be implemented
  in 70 of the national postal services