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Pushing the Envelope Beyond Ordinary

Envelopes and Print – Boldly into 2015

Posted by Jerry Velona on Dec 24, 2014 9:24:00 AM

Happy New Year from Elite Envelope

 

I just checked my calendar and noticed that 2014 is almost over – so you can see I’m right on the ball this morning. Despite the fact that I have all the latest digital toys; including a spanking new IPhone 6 which I love, I still maintain a printed calendar in my portfolio. I print out a month-at-a-glance sheet from Outlook and write in appointments.  I like being able to see where I was and where I’m going all in one spot. Obviously those of us who grew up in the mid to latter part of the 20th century have a certain affinity for the printed page. That’s most likely from whence this strange obsession comes.

 So since it’s almost the end of another year I thought it would be a good time to recap our year and the year in general for our beloved printing and envelope industries.

 Elite Envelope and Graphics, Inc; the company I co-own along with my intrepid partner Dave Theriault, had a very good year. Like most printing and envelope companies, the last recession hit us hard. My theory is that the slow decline in overall print volume was accelerated by the economic downturn. So we were forced to overcome the general slowdown in business plus the cyclical and historic trend in our specific industry.  We’ve regained and increased our volume gradually over the past six years and now find ourselves in a good position for continued growth.

 I’ve never been one to use macro-economic conditions as an excuse. Aside from being something over which we have no control, “the economy” cannot really be regarded in any unifying sense for every firm.  Even during the deepest recessions, certain states will outperform others. Some companies grow even during the worst economic times. 3M and the Tyson chicken companies grew steadily through the 1930’s in the midst of the Great Depression. Blaming the economy is often a convenient excuse. I’m not suggesting that overall economic conditions nationwide or worldwide have no effect. But they are not necessarily the cause for every individual company or industry’s problems.

So where do we in the envelope converting and printing businesses go from here?  I believe that barring any unforeseen catastrophe, 2015 will be a good year for us in general. The digital/information economy; the prime driver of lower mail and print volumes, is obviously here to stay and that is a good thing. The efficiencies and opportunities created by computer software, smart phones, etc. have been profoundly positive to say the least.  

But after a generation where computer usage has become ubiquitous both in business and with individuals, I think the trends that affect envelopes and print are part of the fabric of the economy and not likely to change as radically in the next twenty years.  Just to take one example: banks who provide printed statements.  Based on my dealings with some bank data processing companies, I’ve seen little drop-off in volume on statement mailings over the past several years. I’m guessing that very few college students who open checking accounts are opting for a printed statement. However, there are still many folks in the fifty and over range who prefer getting the statement in the mail. And given current demographic trends and the steady increase in life expectancy, it’s reasonable to project that those statements will continue to be in the mail for many years to come.

Another salutary trend I’ve noticed for paper and print is the “prodigal mailers” – those who were temporarily enamored with e mail marketing but who soon realized that printed direct mail provides a better return on investment even with the higher upfront costs. Several mailers I deal with have told me that 2014 was their best year in a long time; anecdotal evidence for sure, but good news nonetheless.

More marketers seem to be realizing that e mail has its uses, but as the information economy matures and everyone’s inbox is crammed with messages, a printed piece can serve as change-of-pace thereby making it more likely to get a tiny chunk of whatever attention might be available from the potential customer.

As I’ve pointed out previously, first class mail volume actually increased a bit in the last year where numbers are available. That hadn’t happened in a while. Of course that fact has to be understood in the context of an overall 20% decline in the past 10 years or so. 

The takeaway is that we’re in an industry that is adjusting to lower overall volumes than in the past but still serving a large customer base for products that will continue to be needed well into the future. Some of the short term pain and upheaval remains – plant closings, paper mills being shut down, companies doing more with less staff. But most of it has already happened which gives those of us who remain the opportunity to remain viable for many years to come. That’s a positive message for the end of 2014.   Happy New Year!

Topics: elite envelope, e mail and direct mail, envelopes, envelopes and printing

Revenge of the Snail (mail)…

Posted by Jerry Velona on Mar 3, 2014 9:34:00 AM

snail photo

Ah yes, pity the poor snail. He plods along contentedly while the rest of our Can’t-Wait-for-Anything culture whizzes by waving while checking endless messages and updates.  

Snails provide a very useful purpose in gardens by eating debris and promoting the recycling of dead plants.  I’m told they are delicious and quite nutritious (minus all the butter from fancy French cooking but then, what’s the point?). I have to say I’ve never thought of ordering escargot at the bistro but that doesn’t mean I don’t hold snails in the highest esteem.

So what about “snail mail”?  Those of us in the envelope converting, envelope printing and direct mail printing industries have been hearing this clever canard for decades now.  It’s generally used with a dismissive tone that the speaker seems to think conveys a certain superiority or irony as in, “I also sent it to you snail mail; you’ll get it at some point – whatevs”.  Yes, we get it all right – it’s just soooo slowww! I mean, it might take a whole day or two to arrive. Just think of all the “Likes” one can receive during that time.

Now the speed of texts, e mails, etc. is a great thing provided people actually respond in a timely manner (don’t get me started on that!)  With a few keystrokes you can line up appointments, expedite orders, write a blog article and do all sorts of great things that used to take much longer.  But what about receiving a call to action in the mail requires it to arrive instantly?  Nothing really.  So the speed of mail – and I’m talking about direct mail right now – is not really relevant to its mission.

After all, what direct mailers and direct marketers are looking for is a healthy response and a return on the investment. On those criteria, direct mail works extremely well compared to e mail. 

Laurie Beasley of the Online Marketing Institute issued a paper in June of 2013 entitled Why Direct Mail Still Yields the Lowest Cost-Per-Lead and Highest Conversion Rate. She writes that, “According to the Direct Mail Association (DMA) Fact book for 2013, 65% of consumers of all ages have made a purchase as a result of direct mail.”  The paper also states that “According to Direct Mail News, in 2012 the average response rate for direct mail was 4.4% for both business-to-business and business-to-consumer mailings—considerably higher than industry expectations, and surging past electronic mail’s response rate of just 0.12%.”

What about ROI you ask?  Ms. Beasley makes the point that while print production will certainly cost more than an e mail campaign, the proper way to gauge effectiveness is tracking the cost-per-lead. By this measure, direct mail outperforms other forms of advertising.


Source: DMA, 2012 Response Rate Report

The savvy marketer understands that it’s not just an either/or proposition. For instance, including a URL to a landing page in the mail piece gives the potential customer the opportunity to actually make the purchase online which many people prefer.

So All Hail to the mighty snail!

Topics: direct mail, elite envelope, e mail and direct mail, direct mail printing, declining mail volume

Cold Web Printing and Direct Mail

Posted by Jerry Velona on Jun 17, 2013 11:07:00 AM

The recent announcement of a second bankruptcy filing by National Envelope Corporation has put envelopes, and to a lesser extent direct mail back in the news.  National first filed Chapter 11 in 2010. At that time they were taken over by a private equity company,the Gores Group in hopes that they could turn around their fortunes.  Plants were closed, hundreds of workers were laid off and some severe methods were employed to boost productivity.  Three years later, it appears they have not been able to accomplish their mission.

This is sad news for the remaining 1,600 employees spread throughout the country. At this writing the company is saying they are looking for a buyer and are encouraged at the response they are getting.  However, I think it’s safe to say that National Envelope’s future form will be significantly changed from its present state. 

It seems that the only time envelopes and direct mail make any kind of national news is when there’s a plant closing or when the financial woes of the Post Office are discussed. The Post Office’s problems are well-documented and we’ve written about them here in our blog on numerous occasions.  Generally the press accounts in both cases focus on the significant drop in first class mail due to the digital revolution and then infer that this means paper mail is on the way out.

Anyone in the industry knows that while the total amount of mail has decreased, the mailing industry is alive and well and, in many cases, thriving. Much of the decline in first class mail has come from the financial sector. More folks are paying bills, receiving statements and prospectuses and submitting documents on their computers. Automation has also affected envelope usage.  Many bank ATMs now allow a customer to simply insert a check for deposit without the envelope. In many cases the envelopes used in those transactions were purchased in bulk quantities and their decrease has affected companies more adept at producing large volume orders at commodity-level pricing. One of those companies is National Envelope.

Elite Envelope direct mail

As we’ve written about here, direct mail remains one of the most cost-effective ways to reach an audience and generate sales.  As the overall amount of first class mail declines, the percentage of direct mail increases and this trend has resumed after a decline during the worst years of the recent recession.

Marketers are finding that while e mail blasts have their use, they do not produce the type of measurable results obtained from a well-designed and executed direct mail campaign.

We believe that companies which can serve the direct mail industry in the most efficient, flexible and service-intensive way will be those that survive and prosper in the future. That was one of the main reasons why Elite Envelope joined forces with Web Corp,the full-service cold web printer late in 2012. Cold web printing is perfect for direct mail; allowing companies to produce full color components with superb quality at very competitive prices. The combination of cold web printing and envelope converting and envelope printing under the same roof gives direct mailers an edge.

 

We welcome your comments about the future of the direct mail and envelope industry and the type of company required to thrive in the new climate.  

Topics: direct mail, elite envelope, e mail and direct mail, post office problems, cold web printing, direct mail printing, four color envelope printing

Envelopes and Direct Mail – Back to the Future?

Posted by Jerry Velona on May 29, 2013 11:11:00 AM

As we get older (OK, as I get older!), I notice that so many of the changes that come about in society tend to swing like the proverbial pendulum – meaning that change tends to be embraced enthusiastically in one direction for a while before ultimately settling back somewhere in the middle. You see that phenomenon played out time and again in culture, politics and business.

I remember back in the 1980’s it was commonly thought that Japan was going to surpass America in economic growth due to its superior production and management methods. Sony was in ascendance. MBAs were learning to speak Japanese in large numbers. Many books were written on the subject. Thirty years later, the United States certainly has its share of economic problems but nothing compared to Japan about which the phrase “lost decade” is used regularly.

That’s not so much a tribute to American exceptionalism as it makes the point that as the classic song lyrics go, “the fundamental things apply, as time goes by.”  New theories and technologies will always be with us. Some have lasting value; many just end up making a contribution to the great blend of wisdom and practices that have brought success to people through the ages.

Yes, rainy mornings in late May tend me make wax philosophical but there is a point to these musings so please hang in there! (You don’t have much else to do today, do you?)

I recently attended a presentation at the New England Direct Marketing Association (NEDMA) annual meeting by Michael Kaplan, Group Account Director at G2 a marketing communications agency. The talk was about direct mail and how to do it better. Many specific tips were shared and it was very interesting and informative.

In the course of his talk Michael made the point over and over that direct mail works and that it tends to bring a better response than e mail marketing. Remember when everyone complained about “junk mail” - the blight of an unrelenting barrage of unwanted letters in your mailbox?  I’m guessing that today you hear a lot more complaints about spam in the virtual mailbox and for good reason. Before writing this I deleted a half dozen unwanted e mail messages from my in box and unsubscribed from three of them. That’s five minutes of my life I won’t get back.

E mail spam Elite Envelope

Compare this to when I received my regular mail yesterday. In addition to the things I had to open (Hello IRS!) there was an envelope and letter from a magazine to which I subscribe. I was curious and opened it and saw that they had apparently sold my name to a companion list. I wasn’t interested in the pitch so after glancing I tossed it (in the recycling bin – yes, that’s important). But the point is that the highly personalized envelope caused me to take the time to open and at least peruse the contents. There was nothing else going on, no distractions, – just me and the direct mail offer in that single unit of time.

E mail has certainly replaced regular mail in many convenient ways; bill paying comes to mind (although I still prefer to get my bills in the mail – perhaps yet another indication of the fact that I am getting older?)

But despite all the pendulum swings, regular direct mail remains the best and most effective way to sell your product or service if it’s done right.  Oh, and by the way, Michael said that direct mail campaigns that include envelopes generally pull better than those that don’t.  Just sayin’….

Topics: direct mail, e mail and direct mail, envelopes and direct mail

Direct Mail Works and Cold Web Printing Can Help

Posted by Jerry Velona on Apr 29, 2013 3:08:00 PM

For anyone who might think that direct mail is passé, I offer this fact: The Heritage Foundation, one of the largest conservative political organizations in the country does an enormous amount of targeted direct mail for fund-raising purposes. Care to guess how much money they raise in a typical year?  Only around $36 million!

Direct Mail photo 

Yes, anecdotal evidence you may say. But the percentage of direct mail has not only increased as a percentage of mail overall because overall mail volume has decreased. It’s increased because it works. The Direct Marketing Association (DMA) is the largest trade organization of its kind in the country. According a recent study entitled “The Power of Direct Marketing”; they found that “in 2010 an investment of $1 in direct marketing advertising expenditures returned, on average, $12.57 in sales. This high return on investment held up across all industries. “

The host of our Elite Envelope website offers a nice e mail marketing feature for an extra few bucks per month. I signed us up for the service a couple of years ago and I’ve been using it regularly ever since. I’ve segregated our customer and prospect base into various sub-groups and I will send out e mails on particular topics every so often targeted to those particular groups.  I think that’s helped to keep our name in front of people easily and inexpensively. However I have noticed some drawbacks. One that’s come to my attention recently is a large number of folks who say they are not getting the e mails. I’ve figured out that many business servers have very sensitive spam filters which can identify whether something came from a mass mailing and block it.

Another general observation is that e mail doesn’t seem to have the same “staying power” as a printed mail piece.   I also will send out direct mail to prospect lists from time to time. I’ve found many people who will keep that mail piece on their desk or in a place where they can retrieve it later. This has resulted in more than one new customer for us. While I don’t track all the results, the e mails I send, while helpful, don’t seem to have the same impact. As I’ve mentioned in previous posts, the sheer number of them makes each one less valuable in the recipient’s mind.

Again, according to the DMAs 2011 Statistical Fact Book, “a catalog lead costs $47.61, while e mail comes in at $53.85 per lead, and, what is more, the response rate to direct mail has consistently been three times higher than e mail.”  So my gut feeling and narrow experience seems to be borne out by statistics.

While we’re on the subject of direct mail, let me suggest to anyone looking to create a cost-effective print/mail campaign that you consider producing the components using cold-web printing. Cold webs are great for anything printed on uncoated stock with paper ranging from 30# up to 100# text weight. Quality printing with high resolution up to 4/4 is possible and anything which cuts or folds off a 17 x 22 sheet can produce very competitive pricing at quantities of 5,000 up.

Elite Envelope just happens to be adding 3, Alcoa/Didde half-cold webs at the moment! So pardon my shameless plug but do use more direct mail and consider cold webs for what you put inside the envelopes. We can handle it all for you under one roof. Send us your last direct mail campaign pieces and we'll provide a free evaluation on how you might save some money the next time around. At the very least you might pick up some free tips on designing a more cost - effective package. Just click here!

Topics: direct mail, elite envelope, e mail and direct mail, cold web printing, direct mail printing, web printing

Direct Mail Treats Digital Fatigue

Posted by Jerry Velona on Nov 13, 2012 11:12:00 AM

Thanks for taking a break from scanning through your e mails to read this.  So you may be thinking: “Ok, Mr. Smug, how do YOU know what I was doing?” Well, I lay no claim on science for my simple assumption.  It’s based on my personal experience of how I and most people I know start and spend so much time each day; reading and responding to e mails. 

Let’s face it: most of us spend a lot of our professional and personal time on the computer or mobile device. Hard to believe that this wasn’t the case going back a mere twenty years or so but a generation in digital time might as well be a century.  For better or worse (and I happen to think it’s mostly for the better) we are captives of the screen.

As a result of the speed and ease of digital communication, the use of ink on paper has declined. No big revelation there obviously – mail volumes at the Post Office are down significantly in the past ten years and the printing and envelope industry has been characterized by consolidation especially since the recession of 08 and 09.  I think it’s pretty obvious that this trend will continue albeit at a slower pace than in the recent past. But the degree to which that happens will in large measure depend on how resourceful we are.

 Elite Envelope, direct mail, envelope printer

Have we become inundated with electronic messages to the point where the simplicity of the printed page is a relief?   After a long day at work; much of which is spent “on the screen”, I can say that lying in bed with my daughter and reading together out of an actual book is a most pleasurable experience. Aside from spending quality time, there is some sense of comfort and stability that I derive from the book; no glare, no freeze ups, no expectation of a response, no rush.

Is it possible that direct mail which used to be derided as “junk” is now a preferable medium when compared to the unrelenting barrage of e mails, texts and the like?  Is the sheer number of digital messages we receive daily making us less likely to pay attention to them?  In my personal experience, the answer is yes to both of those questions.

Now I happen to work in the envelope industry so there is some bias in my view. (ya’ think?) But the fact that as an item proliferates the less value it holds is an application of basic common sense; not to mention basic economics.

Our challenge in the envelope printing and printing world in general is to take advantage of the unique attributes of direct mail; it’s targeted, tangible, and flexible with enormous capacity for personalization, creativity of message and measurability of results.

Putting into the hands of an individual a creatively designed, beautifully printed envelope that contains a personal and cogent message is our ticket to continued viability as an industry. Now if the Post Office can get its costs under control and stay viable itself, we’ll have something we can rely on for the next twenty years.

As always, your comments are most appreciated.

Topics: direct mail, elite envelope, e mail and direct mail, envelope printing

Brave new world for selling envelopes and print?

Posted by Jerry Velona on Apr 18, 2012 3:07:00 PM

Has the digital world made traditional sales techniques passé?  Last week’s post dealt with personal cold calls and whether they are the best use of a sales rep’s time.  For the most part, I think not.

My post drew a lot of comments but not nearly as many as a recent blog post by a company called HubSpot. They specialize in inbound marketing; i.e. getting the customers to come to you rather than finding them by more conventional and tedious methods like cold calling. Now, I am a Hubspot fan. They have taught me some very useful techniques to get more visibility for Elite Envelope. In fact, they host this blog and provide some great tools for tracking its effectiveness.

But they lost some credibility with me and many others when they posted a blog entitled: "Dear US Postal Service: Please Stop Encouraging Direct Mail". (!)  They’ve already gotten enough free publicity in the blogosphere among irate direct mailers and their supporters (I’m guessing that was part of if not the entire point) so I’m not going to delve too deeply into the post. The main point was that direct mail was dead and web-based marketing was vastly superior; period, end of story.

The tone of the blog had a certain fervor and arrogant certitude which unfortunately can characterize true-believers in any endeavor. HubSpot is a very successful company and what they do, they do very well.  But direct mail remains an effective tool to win business.  Inbound marketing and direct mail along with advertising, direct selling, telemarketing and many other techniques can all be used effectively and are not mutually exclusive.

The message of this blog reminded me of those who said 10 years ago that e mail had effectively rendered regular mail useless.  There is a tendency in human nature to become infatuated with the latest thing. It’s more a foible of youth but plenty of us regardless of age tend fall into the trap as well.

When I think of how I sold in the pre-digital age; with hand-written or type-written notes, maps in my car for directions, a roll of dimes for the payphone, the “beeper” on my belt going off because someone called the office looking for me, I am nothing but grateful for my smart phone, GPS and contact management software that does in minutes what used to take hours.

gadget burn out picture

 

As the saying goes, there’s nothing new under the sun. Things change; sometimes for the better sometimes not. While we have to be open to change we also need to have the wisdom to incorporate it for our benefit not simply for its own sake.   For those of us in envelope and print sales, I think the best approach is to use new technology to make us more productive while never forgetting that there is no substitute for developing a strong personal connection with prospects and customers based on friendly service, competence, product knowledge and value. Some things are timeless for good reason.

Topics: direct mail, elite envelope, e mail and direct mail, e mail, envelope sales, printing sales

Direct Mail Can Set You Apart

Posted by Jerry Velona on Feb 27, 2012 10:37:00 AM

One of the interesting aspects of change in American culture is how things generally go from one extreme to the other relatively fast and then slowly but surely settle back more toward the middle. It’s known as “social equilibrium” in sociology circles (not a place where I spend much time admittedly so my apologies to any social scientists out there if I’m misinterpreting this. Then again, if you’re a social scientist and reading this I’m quite flattered!).

As anyone who’s been breathing in the past 20 years is aware, e mail has become ubiquitous. Twenty years ago virtually every company with 10 employees or more had someone answering the phone on a full time basis. These days when I’m on the road making calls, I’ve noticed that fewer and fewer companies with even 20 or 30 employees have someone “out front”.  At Elite Envelope, where we have 20 staff, we now have someone answering the phones and doing billing and some customer service on a part time basis. When she’s not in, the phones are picked up by whoever is in the office at that time.

Some companies just have a voice mail system which picks up. I happen to think that it’s still important and says something positive about your company when a real person answers the phone. The point here however is that while it’s always going to be necessary to conduct certain business over the phone, more and more of the routine stuff is done via e mail. Part of the reason there are fewer receptionists is that there are fewer phone calls.

The “e mail mentality” has affected direct response marketing as well. No big surprise there; that’s been going on for a long time.  The ease and convenience of setting up an e mail template along with a mailing list and sending it out to hundreds if not thousands at the click of a button can’t be denied. I do it often as part of Elite’s marketing.

However, because of the high-volume of e mail that virtually everyone in business receives on a daily basis, the impact from a single one is reduced.  It’s much easier to send one; hence its popularity, but it’s also easy to delete one and we do that constantly all day long.  For years, people complained about the sheer volume of “junk mail”. Now, there’s less of that and, as a result, each mail piece carries a certain weight and importance which just isn’t transmitted electronically in the same way.  There’s a sense that these days, if someone takes the time and effort to send you something through the mail, it must be important and therefore worth your time to open.

Elite Envelope, benefits of direct mail

I try to send out at least one mailing per quarter to various groups of potential customers. I’ve found that when following up, most people tend to remember receiving the information and have kept it somewhere in their files for further reference. Getting that initial bit of recognition can go a long way toward establishing a lasting professional connection.  At some point, that person may go on an e mail list which allows me to stay in touch. So the two can work in harmony -  or equilibrium as the case may be.

Topics: direct mail, elite envelope, write a letter, e mail and direct mail, e mail, envelopes

The Direct Mail Answer: Privatize the Post Office

Posted by Jerry Velona on Dec 19, 2011 1:01:00 PM

When the federal government first established the postal service in the late 18th century, the United States was a relatively small parcel of land on the east coast of the continent.  At a time before telephones or even telegraphs, letters were the only long-distance method of communication. It made sense to facilitate such an important function in a nascent and growing society.  

Of course, we now live in an age where telephones are ubiquitous and cheap. Sending someone a written text on a cell phone is commonplace and costs nothing.  The internet and similarly cheap personal computers have made e mail the preferred method of written communication. Why spend the time and money typing a letter and sending it to a relative overseas when you can send them an e mail for free and have them receive it within seconds?  Additionally, fax machines are either on your desk at home or easily available at a local copy or print center.  Lastly, you can scan a document on your computer and send it as an e mail attachment for someone to print out upon receipt.

All these developments have reduced the amount of regular mail delivered by the Postal Service dramatically in the past decade.  That trend is going to continue. The reduction in demand would seem to require a commensurate reduction in costs and overhead.  However, there are no incentives to economize or streamline operations at a government-run agency. The incentives are exactly the opposite; spend all the money in the budget so that more can be allocated for the future. "Don't kill the job", has been the public sector motto for as long as there has been a public sector.

Ultimately, the huge fiscal problems facing the Post Office are not solvable through the political process. A government which spends taxpayer money at a rate that is slowly but surely leading to the bankruptcy of the nation cannot be expected to muster the fortitude and common sense required to put the Postal Service on a fiscally sustainable course.  It seems to me the only viable course of action is to break up the postal monopoly and allow private companies to compete for the letter business.

The Post Office used to have a monopoly on parcel deliveries but, as everyone alive knows, UPS and Fedex and many other excellent companies have gobbled up a huge portion of that market by providing great service at very competitive prices.  In the process they have forced the Post Office to implement service upgrades like online mail tracking.  Does anyone believe that would have happened without the healthy competition provided by those private companies?   

Are there any good reasons why the same thing could not happen for the delivery of first class mail? Aside from the huge political uproar which would certainly accompany such a move, I think not.  Would the increased competition for the first class and bulk mail business be a boon to direct marketers and the printing and envelope companies which supply them?  I’ll get into that in my next post along with some of the reasons generally offered in opposition to Post Office privatization.

In the meantime, your comments are most appreciated.

Topics: direct mail, elite envelope, e mail and direct mail, post office, printing and envelopes, postal monopoly, post office problems, envelope company

The Post Office and the Direct Mail Industry

Posted by Jerry Velona on Dec 12, 2011 11:47:00 AM

The classic blues song Born Under a Bad Sign has a line that says, “If it wasn’t for bad luck, I wouldn’t have no luck at all.”  That pretty much sums up the state of the US Postal Service these days.  Except, as Ernest Hemingway famously said, “you make your own luck.”

The latest consequence of the continuing fiscal woes of the post office came last week when Postmaster General Patrick Donahoe announced plans to reduce costs $3 billion by slowing the delivery of first class mail and eliminating about half of the 461 mail processing centers spread throughout the US.  This is on top of the planned increase in the price of a first-class stamp next year.

 post office problem cartoon Elite Envelope

Unlike many heads of sclerotic government bureaucracies, Donahoe seems to know what needs to be done to restore the Postal Service to some sort of viability. He has commented on how the drop in first class mail volume requires cuts in staff and facilities. He has stated that the Service needs to run more like a business.  Good luck with that Mr. Postmaster.  According to a recent article in the NY Times, labor costs at the Post Office represent about 80% of the total budget compared with 53% at UPS and 32% at FedEx.  These costs are locked in by union contracts and any talk of give-backs or cuts is met with the type of apocalyptic, harsh rhetoric we’ve come to expect from entrenched unions fighting for their lives.

Aside from the unsustainable labor costs, the difficulty of closing a single post office due to politically driven opposition by members of Congress further illustrates the impossible task faced by Postmaster Donahoe to bring some semblance of budgetary sanity to the Postal Service.

It’s clear that electronic mail and the internet in general are having an effect on the amount of mail being delivered by the Post Office.  We read that the amount of first class mail has declined by 19% since 2001 and is expected to fall another 37% by 2020.  However, during the same period, direct mail volumes have stayed relatively stable mostly declining only during economic downturns but then rebounding as business in general improves. Advertising mail now accounts for 48% of total mail volume.

Postal Service woes are mostly discussed only in the context of how any changes will affect the average family waiting for a letter in their mailbox. What generally doesn’t get mentioned is the negative impact on the direct mail industry; all those printers, agencies, marketing firms, mail fulfillment companies, and, yes, envelope companies all of which depend on the Postal Service to provide good service at a competitive price.  Somehow, the recent announcement of slower service at a higher price doesn’t seem like a prescription for the health of the Post Office or the thousands of small businesses who depend on it.

In my next post, I’ll propose a solution.  I’ll give you a hint; it contains the "P word".

Topics: direct mail, elite envelope, e mail and direct mail, post office, post office problems, envelope company, declining mail volume

Yet Another Blog Post

From Jerry Velona - co-owner,

Elite Envelope & Graphics, Inc.

Jerry offers pertinent, often useful information on envelope converting and printing, web printing, direct mail, the post office, songs that have to do with mail and letters, digital overload and much more!

(Non-spam) Comments always appreciated.  Spread it around!

 

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