Monthly Archives: June 2011

The Crisis Being Delivered to You Daily

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This week I received my copy of Deliver, the magazine for marketers published by the USPS.  I have received it for a number of years, and it is now fully relevant, mainly because it not focuses on the role of mail in our new integrated marketing world.  Early on it was just a booster for mailing.  In today’s world that is a diminishing crowd of consumers, and professional practitioners – including printers and mailing companies.

In this new smaller direct mail portion of the direct marketing field, unrest and uncertainty are running rampant.  Not only are all of the users of the USPS worried about the future – so is the USPS and all of its employees.  If you were to read the article The Postal Service Needs Relief from Congressional Mandates by Patrick Donahoe, our Postmaster General you get a real sense of their issues.

Last week this really became evident when the USPS stopped payments to the Federal Employees Retirement System, $115 million due every two weeks.  This is just the USPS portion, the employees contributions will continue.  I guess you would call that a shot across the bow of Congress who has not acted on a number of suggestions from the USPS to reduce their ongoing costs.  These include dropping Saturday delivery and the closing of a number of post offices, but politically unpopular actions that elected officials are loath to do lest they offend their local constituents.

USPS Postal Worker in the Snow

Weather No Problem - Budgets Yes

This has been building for some time, and I have chronicled some of the causes – but mainly it is due to falling mail volumes and growing labor costs.  The falling mail volumes in both 1st Class mail – those we put those Forever stamps on, and in Standard Class mail that we love to call ‘junk mail.’  Truth be known, junk mail now pays the bulk of the freight for the USPS, and nearly all of its planning for the last several decades has been aimed at automating that mail, thereby reducing labor costs, has been very expensive, and the labor costs have still gone on.  You can automate a lot of things, but it still takes a body to deliver it to your home.

The USPS provides the greatest bargain service on earth – for 44 cents you can send a letter anywhere in the U.S. –even if we have to fly it there, or load it a donkey and take it to the bottom of the Grand Canyon.  Time for change has come, but the control is in the hands of the major mailers and Congress.  In my next post I’ll talk about the issues being faced by major mailers and the industry that services them.

 

The Great Southern California Media Auction

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The Orange County Register

The Orange County Register

The dance goes on for control of the Freedom Communications media ‘empire.’  Both in a WSJ article on the sidebar, and then again in today’s LA Times article in the business section it appears that the bidding to purchase Freedom, including the crown jewel, OC Register, has broken down.  That means the price was too high for the outside financing to cover the purchase.  Media News, led by Dean Singleton, is the 2nd largest newspaper chain in the U.S., behind only Gannett.  Media News has a large stable of papers in the area and this would make the chain the dominant player, in terms of circulation, in the state.  The Tribune Company, owner of the Los Angeles Times, was also rumored to have been in the bidding.

In April, the whole saga was laid out in the Newsasour blog by Alan Mutter.  For anyone who cares about the state of print journalism in the state, or in general, it was a comprehensive and fascinating treatise on how things could play out in the bidding for Freedom Communications and the case for media consolidation in the entire Southern California area.  The article “Big Duel Likely for Orange County Register” is a great read, and I would encourage all to view it.

So what happens now, and really what does this mean to consumers and to businesses.  Next we assume, is that the sale process for Freedom goes on.  Terms may change and this could open things up to additional buyers, but Media News and Tribune are still the ones with the most to win.  If either wins, then they will have the dominant print media position in Southern California.  The new larger player would have better economies of scale and could spread their expenses over a larger base.  It would also place the loser of the two media companies in a diminished position, which could in fact, open further discussions to a total combination of ‘winner take all’ as the only real survivable posistion.  What a major change from just a decade back when all groups were profitable.  Looks like a kind of a ‘race to the bottom’ from that perspective.

For consumers this really means fewer choices for their print news, if they even care.  Demographics are working against newspapers and circulation continues to decline, and with that, declining advertising revenues.  Most will be forced to get their news online, and advertising will always find a way into the home – perhaps by a Groupon or one of the new clone ‘dealers’ who will send out their daily messages to subscribers.  In today’s world when so many have clamped down on their wallets this could work for a while.

For businesses they will lose a powerful and flexible tool to reach likely consumers on a daily targeted basis.  This helped to make the newspaper a potent tool in nearly every community, and created virtual monopolies and cash cows for publishers.  Those days are gone.  Newspapers will have to evolve to stay relevant and profitable.  Perhaps they can, but the cards are stacked against them.  I still love to read my paper – but now only 4 days a week.  My wife says I am weaning myself down, and I guess I’ll choose to go along with that.  In reality, as a professional from the industry and heavy news consumer, I too find that newspapers are not as relevant in my life anymore.  Time to take out the recycling, and to read from my new iPad.

 

 

Your USPS…with guns blazing, wants your business!

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The USPS Investigation Control Mobile Central

Forget to pay your postage?

One of my real hot buttons is reputation management.  I’ve written about it many times, and it is of continual interest to my clients.  Most of them fear getting smeared by something they cannot foresee or control.  This week two institutions that I am very familiar with came to ‘blows’ and both had their reputations sullied as a result.  The two institutions – the USPS, and a large commercial printer and mailing service, Advantage Mailing, Inc in Anaheim, CA.  What happened?

On Thursday morning the USPS in the form of Postal Inspectors and U.S. Marshals, a contingent of approximately 60 strong showed up at the doors of Advantage with guns.   They were there to search for malfeasance on the part of Advantage for short paying postal invoices for several months.  Wow, I didn’t realize that was a shooting crime.  I’ve been in the mailing arena since 1979, and I’ve never seen guns brought in to any facility and I’ve mailed billions of pieces of mail.

Quickly the word got out and the OC Register, another paragon of journalistic virtue, reported the event in their online coverage.  It wasn’t until today that they reported that the investigation was ongoing, and that Advantage had opened for business again on Friday.  For those who don’t understand how large commercial mailing operations work – there is ‘in-plant verification’, meaning that postal employees work onsite to verify all mailings before they leave the dock for the appropriate postal facility, generally then to large Anaheim mail facility.

So, if they thought Advantage was not paying the right amount on mailings they could have been stopped before they left the plant.  In nearly all of these cases all of the postage is computed via highly controlled postage software, certified by the USPS, which makes all of the computations.  The postal employees on site can do any checks they desire including weighing the pieces, weighing the total loaded mail and checking all mailing lists used to address the pieces.  Why then show up later with guns?

Advantage is back in operation.  They are now trying to rebuild their reputation that, with a large hue and cry of the media, was destroyed last Thursday.  They were guilty the minute the armed postal inspectors showed up.  The USPS will also have to repair their image.  Does any other large mailer, or large mailing client, want to have the similar circumstances show up at their door in the future?  I doubt it.

With all of the problems the USPS is having, mainly being several billion dollars in the red this year and requesting more cuts including dropping Saturday delivery, they don’t need to scare off their customer base – especially with loaded weapons.  I think they are also losers in the reputation area.  This will not help them in trying to win back commercial customers to mail who have switched their programs on-line.  As far as I know Google, Microsoft and Apple aren’t allowed to carry loaded weapons.  That appears to be the ‘safe’ choice for the future.

 

Heading for a double dip…and I don’t mean two scoops

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Two Scoops Please

Two Scoops Please

It looks like things in our economy are not headed in the right direction.  Calls from my clients are more frequent, and almost to a person, they want to know what the heck’s going on.  There’s short-term distress enough for all, but I think there are even greater trends that have to be factored in than just a falling stock market, or a sudden dip in sales figures.

I’ve been handling these kinds of calls for the last several years – at least since 2007, the patterns are becoming very clear.  This is no short-term economic dislocation, this IS our future.  A kind of a perfect storm for all of us.  Over the weekend an article in the LA Times captures this in a concise and direct form – “Economic Analysis: Economic ‘Recovery’ Leaves Jobs Behind.’ Essentially – no jobs, no recovery!

After several months with encouraging job growth and a declining unemployment rate we saw bad numbers in May.  So what gives, are we growing our way out of this recession or are we not?  The answer leans a little more to the not side of things and the Times article concisely lists them.  Among the reasons stated are as follows:

There is a fundamental change in our economy.  Productivity continues to improve and companies are not staffing at previous levels.  Technology is the boogyman here.  Wesimply need fewer people to produce our goods and services.

Traditional services of employment, including many I have worked with – newspapers, direct mail, printing  – are in decline.  They are being supplanted by newer digital technology.  Newspapers, once an engine of growth and prosperity for every local community is now less than have the size and revenues than they were just 5 years ago.  With their dominant spot in each community they had licenses to virtually print money with every edition.  Now they are selling email, SEO and social marketing at a fraction of previous revenues and profits.

What does this mean for your business?  In the short term you need to realign your business functions to the digital world.  Take advantage of all of the tools and techniques that will help you keep your costs down, and to make it easier for your clients to do business with you.  Ride the technology wave.

In the long term, you need to conduct a review of your business, your business sector and match that to longer term trends including social, political and economic trends.  Our current situation is vastly different than it was 10 years ago, and that will change even more dramatically in the next 10 years.  Get ready for the change, and drive it to your personal and professional benefit.  In my many years in business I have seen more fortunes made in ‘bad’ economic times.  This is the time to make your mark.  Double dip economy or not – time to find that second scoop for your personal icecream cone and business.

Geeks Rule…the Political World

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Obama Campaign New Chief Technology Officer

A Face All Geeks Can Love

I often describe what I do as ‘behavioral technology’ – really I help normal people understand how to use and prosper from all of the digital tools and technology of today’s age.  Years ago I was just a geek, so this is kind of a promotion for my ego.  When I saw the headline about one of the newest hires for the reelection campaign for Obama as a technologist and ‘force multiplier’ my heart skipped a few beats.  Then I caught an image of what anyone would describe as a technologist (nee -  Geek) and I soared.

After coming down in a couple of nanoseconds that Harper Reed and 33 year old from Chicago, will be taking the reigns and moving political campaigning to new heights.  The 2008 Obama campaign set the benchmark for a Presidential election, and now they are raising the bar.

My sons, both digital natives, will be pleased to know that Reed left Threadless, where they buy all of their T-shirts in 2009.  From there he was at Texas-based Rackspace, where my blog has been hosted – now at Amazon and the Clouds.  He left in 2010  to spend some time writing, researching and learning about start-ups and business.

Based on the image above Reed is not your boardroom type, but is known to be bright and outspoken.  That along with a heavy dose of creativity and digital savvy is going to be needed to get Obama back for another 4 years.  One thing for sure he knows the young tech savvy audience, and if he is half a good as the bio in the LA Times, Obama will have a fighting chance to return.  Geeks rule!!