Big Data vs. Big Money…and the Winner Is?

Posted on December 13, 2012 by Lyn Bunch

Sometimes things don’t turn out the way everybody thought!

The election is over, and the team clothed in Blue won, and the margin was large. After such a contentious election cycle I’m sure all would agree -no more. The question that I raised in my last post on the eve of the election was “Will Nate Silver be a god or a goat?” Well we now know that he was spot on in his predictions for the outcome of the election with Obama winning nearly all of the contested states.

How did Nate Silver call the outcome? He did it by an algorithmic review of all polls (he does not conduct any polls of his own) weights the averages, and then forecasts the likelihood of winning the electoral votes in a given state. No punditry, shear match, some science, and enough sense to lower the values of what were the outlier polls like Gallup and Rasmussen that did not fit the general results of the other polls. Viola, we have a whole new way to pick the winner.

So, what happened to the Republicans, who were still forecasting victory right up to the last minute which gave us some memorable moments when Karl Rove had a meltdown on Fox, and Mitt Romney had to write a last minute speech that no one thought he would need since it was obvious to them that he was going to win…ouchers.

So this election came down to a couple of very big things – Big Money and Big Data. On the Big Data side the Democrats used all of the data tricks learned in the ‘08 election, and then brought in a number of new wrinkles. They built a large team in Chicago to manage the data, armies of staff and volunteers to use the data to blanket the targets with multiples of messages. No stone was unturned in reaching and motivating their target audiences. They had a mission and it was about turnout, and they did it, surpassing their efforts of 2008. I expect now that major elections in the future would be based on these efforts.

On the losing side, the focus had been on Big Money, mainly big donors who gave directly to the party, and to the Super Pacs. The Koch brothers and Sheldon Adelson were the big whales contributing an estimated 250 million between the two. These efforts were supposed to be all that was needed to blanket the airwaves with TV buys that would sway the election in their direction. In the past this has done it, and more money was spent – over a billion dollars in this heroic effort to carry the day.

The funny thing is that the Obama team also raised huge dollars – they also hit the billion-dollar mark, much by large donations, but a huge portion came from donations, mostly over the Internet. Their strategy was to go after small sums from a large pool, and then to hit them again and again. They test all kinds of messaging, and guess what, nearly all of the messaging worked – and the donations flowed. The public was really in the dark on the effectiveness of this effort until well after the election – certainly the Republicans were in the dark based on their surprised look at the end of the contest.

I’m not here today to talk politics – my interest lies in the technology and the application of the technology. I have friends, who are political consultants, and “I forgive them for that, they know not what they do.” My interest is in understanding how we best influence decisions, mainly commercial or business decisions through communications. Would the brute force application of traditional print and broadcast media work in todays world – certainly one side thought that it would. They were experts in direct mail fundraising with golden lists that delivered the manna in each election cycle. On the other side, with a new digital toolbox that worked last time, could it keep up with the promise of a sea of paid media that would not end? Could they do it again since the other side knew how they were going to proceed?

They did it again…and in my next post I will go into more detail on just how they did it and what this all means to us in our business practices. Big Data and the Digital World are real and anyone who does not utilize these tools in whole or in part will probably not make it until the next election cycle. More on Monday!

Love Letters from Washington to the USPS

Posted on May 9, 2012 by Lyn Bunch

In the manner in which it can only do, the Senate has passed legislation aimed at solving some of the problems the USPS is facing. As only they can do…they punted, and now the House will have the ball for the rest of the game. On May 15, time will be out so they need to act soon.

What did they accomplish? According to most who care about the issue – not much. Lots of posturing, and little action. Retirement incentives for nearly 100,000 postal employees, a ‘study’ of dropping Saturday delivery, a return of $5.5B in ‘overpayments into the retiree health plan along with not having to continue the onerous advance payments they had been conscripted to do in 2006. They would also allow the USPS to find some new revenue sources like the delivery of wine and beer which they are forbidden by law to do currently.

Wow – study Saturday delivery. Oh, and they also sent a strongly worded letter to the Postmaster General not to do any post office or distribution center closings, please, until they got back to them. Our top 100 legislators in the U.S., and this is all they can come up with. Now it’s on to the House.

The House is going through its ‘due diligence with no due haste of any many. With their view they also want to punt the issue down the road. After having asked for bold solutions and suggested that the Postmaster General and his staff run this like a business, they are now saying ‘ wait a minute.’ It is obvious from their public comments that they in the House intend to do just that…for many minutes.

Notes have been passed back an forth Senate to House to USPS in a never ending cycle and now some news is coming out as of today that the USPS has agreed not to close any post offices for now. The threat of closing many rural post offices was too much for all of the Senators and Congressman. We’ll effectively deal with that after the fall election. Surprised, not so much on my part.

The USPS has many problems, but the courage to create a ‘business plan’ that could stem their losses was not one of them. They came up with one, but it meant pain, and we don’t do pain well in an election year on any house or on either side of the aisle. Change will have to come in 2013. But what kind of change do we really want.

It is absolutely true that we communicate differently now than in the past. Old legacy media and forms of communications are being changed to newer digital forms. Mail, newspapers, land line telephones are not the key means to reach out and ‘touch someone’ that they used to be. Get over it, and move on! We still need all of these to have total access to information and a free dialog that is so important to our way of life. We need the USPS, but we do need to trim its costs just as newspapers have had to trim theirs to stay alive. Let’s hope our national legislators have the real courage to tackle this issue and to help place the USPS on a solid footing for the sake of our future. I’ll be putting out a Mothers Day card tomorrow, and I hope I’ll get a couple of Fathers Day cards next month – we need the cheer that only they can bring when you pull them out of the envelope.

The USPS is NOT a business, it is a real part of the American way of life, and I for one want it to stay, even if I don’t like all the grumpy clerks down at my local P.O. here in Irvine. Heck, even I get grumpy once and a while. I welcome your comments, email or even drop me a card in the mail. Our friends at the post office will appreciate it too!

Postal Reform Now…Will Congress Act to Save or Kill USPS?

Posted on March 27, 2012 by Lyn Bunch

Is the Postal Service going downhill??

“Industries Fear the Ripple Effects of Proposed Postal Service Cuts” – Was the title of the article in by Ron Nixon in the New York Times yesterday. It is a good statement of some of the key issues that are being taken up starting this week in Washington. All sides are lined up to help shape the final outcome. Today ,CCN Money has picked up the story as well. It seems that all eyes are on Congress as they take up the issue of “postal reform.” All this while all the ears are on the Supreme Court as they take up the issue of ‘Obamacare.’ We certainly do live in interesting times. As the pace of change and disruption our world picks up we must expect many more battles in the future to go along with these two.

Congress has begun work on their vision for Postal Reform, if reform is what they really have in mind. All of the various constituencies are lined up on both sides of the issue. Some want more, and others want the USPS to do less. On the plus side are the wine and beer lobbies that want to be able to use the USPS to ship their products, something the USPS is prohibited from doing by law. On the negative side the insurance and banking industries are lined up to ensure that the USPS not move into their fields, as some in Congress has suggested they do to create more revenues.

Like the newspaper business which is also undergoing its own transformation, the USPS is a huge enterprise that employees nearly 600,000. Beyond that the entire direct marketing field, including mailing companies, printers and direct marketers employees over 10 times that amount. This is a big deal, and we need to get it right. As was noted in the article the field supports over $1 trillion in annual economic activity. It helped to put both of my sons through college, so it is still dear to me.

Nearly every business relies on the post office to deliver packages, advertise services and send out bills. This postal supply chain supports millions of American jobs in fields as diverse as banking, agriculture, media and manufacturing. This is an urgent issue since the USPS is losing nearly $36 million a day. As volumes of mail have decreased with former users now going to digital methods of delivery. Even the USPS has said that it does not expect to get those missing volumes back in the future.

The USPS is also saddled with a Congressional mandate to pre-fund future retirements, the only government agency to have to do so, to the tune of $5.5 billion. Relief from this mandate would cut the shortfall in half. A sign that this is a big deal is the nearly $300 million spent over the last three year by those lobbying on all sides of this issue – both the USPS employee unions and industries who work in the direct marketing field.

Postmaster General Patrick Donahoe has proposed closing half of the post offices, approximately 3700 and shutting half of the mail processing centers, 250 there. Both changes, along with stopping Saturday delivery, would also help to bring down the shortfall. In a world that has gotten to email and instant messaging for time vital business and personal communications, there would seem to be some wiggle room for printed mail – derisively called ‘snail mail.’ A big question is how fast do we need to be, especially if we want to price reduction, or at least fewer price increases. And yes, the USPS is also asking for a 50 cent first class stamp.

Postmaster General Donahoe said in prepared testimony. “If Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings.” The Senate is beginning the process now, and the House will begin deliberations, probably next month. A key deadline for consideration is May 15, when a moratorium on closing postal facilities will expire.

Currently under consideration is a bill that passed a Senate committee in November that would tap the overpayment of the future retirement benefits, currently at $10.9 billion to pay down postal service debt (to the U.S. Treasury) and use up to $2 billion for incentives to get a number of long term employees to retire. The USPS has also planned to open its own health care for employees in hopes of cutting their costs, but there is pretty widespread opposition to that from Congress and the employees.

The USPS is a legacy system with a long history. Like so many of our other ‘legacy’ systems, including newspapers, they are in deep trouble with the change in the economy in our broadening digital age. Change is great for some, though it sucks for others. I live in both worlds, and yes, I still want things the way they used to be. The question is how much am I willing to pay to have that. We make those choices each day, and we are making those choices now regarding our postal system.

In the face of the current situation I have to applaud Postmaster General Donahoe and his staff, though that is a strange position for me. I prospered under the USPS, and endured a lot of petty regulations as well. They clearly understand where they are today, where the world is going, and have surfaced a plan that will help them to move forward under their current legal and financial burdens. Congress has the keys to open doors for them to endure and preserve the current levels of service many still desire. They also have the keys to the vault and say no more. I compliment the PG for a real and thoughtful plan, and I hope our elected officials will make the right choices. In the face of the coming elections later this year – this should prove to be good theater, and maybe even good politics.

Stadiums Yes!, Beaches No!

Posted on January 17, 2012 by Lyn Bunch

Proposed Farmer Field Stadium for Los Angeles

Is this in our future?

I was amused to read the article in the recent Los Angeles Times–” Coastal cities will sponsors: make our beach your sandwich board”. Boy did that bring back memories for me. For several years, beginning in 1999, I led a start-up in Southern California that offered advertising on local government vehicles. This was a fun venture for several years, but then the fun for me left of the business. It appears from the comments in the articles that little have changed since that time. Local governments are still looking for new revenue sources, but are not willing to give enough value to attract advertisers who have more attractive ways to reach their audiences.

Beginning in the late 90s, and continuing through the early years, municipal corporate advertising was in its heyday. By the mid-“ought” years the bloom had come off the rose. The hard fought battle to gain acceptance have led to some significant revenue streams. However, it was then that the impact began to be felt from the growing Internet advertising. We could see that the trend would gobble up much of the hard fought growth that had been expensive to win.

The real trend in municipal advertising has come from larger sponsorships mostly to stadium advertising. This is where the big bucks are. A few dollars have been left over from corporate budgets that have leaked into municipal advertising programs. My experience in the early years of municipal advertising showed me that the concept was viable, and rewarding, but in the long term most programs would not be sustainable. Why? The reality that I found, and others in the same field found, was that the returns for advertisers was not at the level of their expectations. High client churn, meant high sales costs. Within a short period of time, usually within 2 years, the programs started to decline.

Advertising and government places can work, however the price generally doesn’t match the value received and the grief rendered. My experience, and those of other compatriots working in the field at that time, showed that working with the government agencies was costly, time-consuming, and unfulfilling. The dollars earned simply did not match the effort and as such made the venture non-sustainable. This can work for both sides, if and when, the value ratio can meet expectations of both sides

Happy Endings to All…and to All a Good New Year!

Posted on December 31, 2011 by Lyn Bunch

I love endings! That usually means a completion of a task or a goal, and the opportunity to move on to new things. Year endings are the best. Close out the old and start with a clean slate. I think this year will not end so well. Instead of starting fresh we will be dragging an incredible amount of baggage along with us into 2012. As we have moved into our new digital age in the first decade of the 21^st century, our legacy tools and traditions, and so much of what makes up our business way of life are struggling to advance with incredible pressure being on them to adapt, or die.

One of our oldest tools in the U.S. has been the Postal Service initiated in large part by Benjamin Franklin. It was instrumental to our overall success for over 200 hundred years. Today, it is seen by many as a ‘relic’ of the past as new digital tools have eaten into its core ability to facilitate communication. Hand written letters are becoming things of the past. Our current generation would not understand the context of the old saw – “keep those cards and letters coming!” Now we have to warn people about communicating (i.e. – texting) while driving.

I could go on for days about this transition, but I won’t. I have written extensively about the battle for the future of our USPS and what it means to commerce and personal communication. The leaders of the USPS have offered solutions – i.e cutbacks, and I have applauded their honesty and candor about their situation and things that must be done to keep the USPS on a sound financial footing given our change in mailing patterns.

The latest salvo against their plan has come from their masters, the Postal Commission – “Postal Service’s Closure Review Process Was Flawed, Panel Says” They believe that the original plan was ‘flawed’ and did not take into consideration a number of sensitive issues other than just cost. That is an honest statement, but the overall consideration by the Commission is politics. The only answer for the USPS is a full and open consideration of what we expect from the service in light of today’s evolving digital world, and what are we will to pay for as citizens to preserve the service as a whole, and how will the prime users contribute to save their unique positions. This includes the full commercial mailers, and rural users who are the prime drivers of cost.

I await 2012 to see how this evolves. I expect no real answers until after the election of 2012 which will go a long way to determining how we as a large community will choose to deploy and pay for the resources that we use.

A Few Stamps Short of a Full Roll

Posted on November 28, 2011 by Lyn Bunch

Honoring our First Postmaster General, Ben Franklin

The battle goes on, for the life and soul of the United States Postal Service. Life and soul? Yeah, that’s what I think. We are at a cross roads to decide whether we will keep the USPS as we know it, or will cut it down to a botique service used for direct mailers and holiday cards.

I hate to sound so harsh, but I really think that we are at a point of no return. In all of our budget discussions, and the search for expenses that could be reduced, the long knives have come out against the USPS. I would not describe the USPS as the most efficient agency of the government, if there are any of those kinds of animals anyway, but they are important to us as a people and we shouldn’t be in such a hurry to solve the issue…right now.

Last Friday George Will waded into the fray will his piece on privatizing the USPS. A few of his thoughts from the right side of the argument:

“Today, the U.S. Postal Service, whose financial condition resembles that of the federal government, of which the USPS is another ailing appendage, is urging cancellation of Saturday deliveries, perhaps en route to three-days-a-week delivery. The USPS lost $5.1 billion in the latest fiscal year — after serious cost-cutting. Total 2012 losses may exceed $14 billion, a figure larger than the budgets of 35 states.

“The fact that delivering the mail is one of the very few things the federal government does that the Constitution specifically authorizes (Article I, Section 8: “The Congress shall have power to . . . establish post offices and post roads”) does not mean it must do it. Surely the government could cede this function to the private sector, which probably could have a satisfactory substitute system functioning quicker than you can say “FedEx,” “UPS” and “Wal-Mart.”

“The first two are good at delivering things; the third, supplemented by other ubiquitous retailers, could house post offices. All three are for-profit enterprises, so they have an incentive to practice bourgeois civility — to be helpful, even polite. These attributes are not always found at post offices.”

On the philosophical lefter side of the argument on the USPS, David Lazarus, my favorite gadfly columnist from the Los Angeles Times has also weighed in on the USPS situation. I’m going to quote him liberally here so we have a little fairness in the argument:

“Richard Maher can’t remember the last time he wrote a personal letter to anyone — and he works for the U.S. Postal Service. That’s how bad things have gotten for the government agency that, in the age of email, Facebook and Twitter, not to mention FedEx and United Parcel Service, announced last week that it lost $5.1 billion in the last year. And the losses would have been more than double that amount — a record $10.6 billion — if Congress hadn’t allowed the postal service to engage in a little creative bookkeeping and shift an outstanding $5.5-billion payment for retiree healthcare into the current fiscal year.”

Lazarus goes on to say…“As a newspaperman, I know a little something about antiquated business models. Simply put, the postal service can no longer raise the money it needs to do the job it’s required to do. Period. It just isn’t economically feasible.”

“A couple of years ago, after the postal service reported losing a mere $3.8 billion, I asked whether it was time to think about privatizing mail delivery. The problem with that idea quickly became apparent when both FedEx and UPS told me they weren’t interested in the job.

“While both companies might be interested in cherry-picking profitable urban routes, neither wanted the obligation of schlepping mail up and down backwater rural roads. We believe that the government plays a role in terms of ensuring that every mailbox is reached every day,” a UPS spokesman said. “That is not a responsibility that UPS would want.”

“Higher rates are obviously in the cards. A first-class stamp will cost 45 cents as of Jan. 22. Don’t be surprised if that charge quickly grows to 50 cents, or more. But higher fees alone won’t do the trick. That’s why the postal service has also proposed dropping Saturday delivery, closing processing centers nationwide and having the leeway to lay off tens of thousands of workers.”

“But I’d go a step further. Perhaps it’s time to do away with the postal service’s constitutional requirement for universal service. Perhaps it’s time to stop delivering to the sticks. I know, I know: heresy. But think about it. The real problem here is costly rural delivery. So instead of having the mail man (or woman) visit every home everywhere, how about we set a geographic boundary for home delivery at some point on the outskirts of every urban area?”

“Beyond that point, people’s mail would be delivered to the nearest post office, where you could pick it up at your convenience. Or you could authorize someone else to pick up your mail — the neighbor’s kid, say, riding his bike home from school. For more urgent deliveries, such as medicine or medical supplies, an opportunity would exist for local companies to establish services that would bring mail to people’s homes in a timely fashion. Such services could also address the needs of seniors who may not be able to get to the post office.”

For the last word on the issue let’s turn to the man at the top of the USPS. U.S. Postmaster General Patrick Donahoe said the two separate bills that have advanced in House and Senate committees “delay tough decisions” and “don’t come close” to giving the Postal Service the flexibility it needs to stem steep financial losses.

The Postal Service has offered a number of solutions, however not everyone agrees with them – mainly Congress, the Postal Unions, and major mailers. At a National Press Club luncheon, Mr. Donahoe said that neither of the two bills passed recently by House and Senate committees went far enough to help the post office achieve its goal of cutting $20 billion from its annual costs, which are now about $75 billion, by 2015.

Here’s the part that I love to hear, if I had it on tape I would play it over and over – Mr. Donahoe said “We’re in a deep financial crisis today because we have a business model that’s tied to the past,” he said. “We are expected to operate like a business, but don’t have the flexibility to do so. Our business model is fundamentally inflexible. It prevents the Postal Service from solving its problems.”

I think that opening up the discussion to admit that what we are doing today is not sacrosanct, carved in stone, patriotic, or whatever…it is really that the old business model doesn’t work today. Wow, so many buckets of ink have been spilled to get down to that point. If we accept that as fact, and I posit that we should then we need to come up with some answers for our future – for the USPS, its’ employees, its’ customers, both senders and receivers – and move forward.

I will be back soon to talk about all of the possible solutions from as many sources as I can find, top them off with me own – and then let this rest. Like David Lazarus, I’ve spent too many years in the industry not to care, but it is also obvious that the current model doesn’t work and must be changed.

Support Your Local Mail Carriers…Please!

Posted on November 10, 2011 by Lyn Bunch

Let me make one more point...!

In my search for updates on the current postal service issues I came across a new source of information – PostalReporter.com. This is a site maintained by the APWU, and I suppose other affiliated postal service unions and workers. A concise site for all things related to postal issues,especially postal worker issues it was informative and very direct in covering USPS issues today.

In the site I noticed that the USPS has been given until November 18^th to come up with a decision on how they will handle the payment to the Postal Pension account that they had earlier defaulted on. This was the default that set into play the whole mess of what to do with the USPS earlier this year.

After a lot of discussion, angry words on all sides we are now back to looking at the clock. Tic Toc, but the cupboard is still bare and no real decisions have been made. The USPS has requested making changes, but the approval to make them rest with the politicians. Now what?

One of the key leaders in the Congress actively working to help reshape the USPS is Senator Bernie Sanders of Vermont. He is quoted as saying…“It is time for the Postal Service to move into the future, to offer Internet service, printing service, and all the other services appropriate for the modern age which are financially viable.” He has offered his own version of a bill to help save the postal service. Others have done the same thing, but the big question is can they all come together in this politically charged environment to do something that is forward thinking? I hope so, but I have real doubts on anything substantive happening in the short term.

One of the things that had been recommended was to sell some of the surplus USPS real estate. Some is currently vacant, some was purchased in anticipation of future growth. Some facilities will be available if the USPS is allowed to close a large number of postal facilities – both processing centers and post offices. Again, this is all subject to political approval in Congress.

To help set this all in motion the USPS awarded CB Richard Ellis a contract in July 2011 to serve as its exclusive provider of strategic corporate real estate solutions nationally. “CB Richard Ellis will provide transaction management services for USPS, including leasing and disposition.” The website listing USPS properties for sale is operated by CB Richard Ellis Group.

After having watched the series of commercials sponsored by the postal workers unions I thought I had seen them all until yesterday when they came out with a new wrinkle. Cutting postal workers will cut veterans! I wasn’t aware that the USPS is one of the largest employers of veterans, and that there was a preference for hiring and retaining veterans since an act of Congress in 1944.

With all of our worries about getting people back to work and our desire to do well for veterans returning from duty in Iraq and Afghanistan it gave me pause, but then reality set it. We need to come up with the right focus for our postal system, staff it appropriately to meet our needs and move forward. This includes looking at the mandate that it should be self-supporting. I would be the first to say that the USPS should be cost-effective, but to be fully self-supporting I think is short sighted – and we need to apply long term vision for our future now.

“Time to Letter Go?”

Posted on September 9, 2011 by Lyn Bunch

Senator Claire McCaskill, Missouri - USPS Letter Writing Campaign Queen

That was the headline recently in The Daily, the first online news product from the Murdoch family of ‘news’ vehicles. Actually, I added the ‘?’ at the end, because they didn’t. Their proposal was that it was time to end the postal service as we know it, not whether we should or not. I know things have gotten a little heated lately, but I think they have gotten a little ahead of themselves. Some of our professional governing class in Washington are also starting to take notice of the issue and have some answers of their own to the revenue shortage and lack of personal mail that is so nice to recieve…especially since it is so infrequent today. Senator McCaskill of Missouri, I love this lady, and would love to have her as my Grandma if I weren’t so old. In a recent Senate hearing on the USPS she said. “I really think that there isa longing out there right now, especially in these uncertain times, for some of the things that have provided stability over the years.” She wanted to have the USPS mount a campaign to send more cards and letters to friends. Patrick Donahoe, Postmaster General, said he thought that was a good idea and they had plans for an advertising campaign due to hit soon. My other ‘favorite’ Senator Joe Lieberman also voiced his support suggesting, “We should be writing more passionate letters to those we love.” Wow, no wonder I hold him in such high esteem. There are already TV campaigns running, paid for by the Postal Unions, I think, since they feature so many smiling postal workers…none of which work at my local post office across from the University of California. I’m an ad guy, and I don’t think they will have everyone rush out for a couple of new roles of ‘forever stamps.’ However, I did search my office, and my secret hiding place for all things paper and found my old stash of engraved note cards and envelopes my LHRG bought for me a long time ago. The box is nearly full still. They look great, but the zip code has changed – our fourth in 29 years. I think I will use them to join the great crusade of Senator McCaskill. Heck, I’ll even send one for Senator Joe – perhaps even to his office so he can see that his words actually do have some effect. We have a lot of issues with our postal service. In the past I have railed against their armed investigation of a local mail processor as being a ‘little over the top’, but these issues are real and letter writing campaigns will not solve them. We have to define what we want our postal service to do for us, and how much we are willing to pay for it. Either postal rates should reflect the whole burden of the operational and pension costs, or it should be subsidized, much like we do with nearly every other function of government. We have to choose…I think I’ll write to my Congressman, I think that he can read. That should be fun since he lives in my zip code and will wonder where the hell it’s coming from with the old zip cade engraved on the back. That should drive him crazy. My intentions will be satisfied.

A Visit to the Heartland

Posted on August 31, 2011 by Lyn Bunch

Recently I had the occasion to travel from California to Arizona for both business and pleasure. Accompanied by my wife, the “LRHG” we took our usual route off Hwy 10 using Rte 60 that takes us through Wickenberg and a number of very small towns including Salome to reach our destination in the west Phoenix area. As we drove through all of the small towns in each one the local Post Office was one of the most prominent buildings in town.

Being a guy who has lived most of his life in larger metropolitan areas, and have worked in larger scale businesses, most the communications field, I was struck by the sight of these post offices. The local post office holds no personal sway for me. Most of my professional interactions have been with larger scale facilities. As a direct marketer I have spent my days selling and managing the design and distribution of millions of pieces of mail. I hadn’t been in a local post office for personal reasons in years.

The world has changed over the last couple of decades, and the days when we used to get cards and letters from friends and family have been replaced by email and Facebook. The mailbox is now a commercial place where bills, advertising circulars and catalogs dominate. Hard to come away from a trip to the mailbox and return with a smile.

My world is mainly digital world today, but all of those small towns in Arizona still live in that past world, mostly ‘analog’ and little digital communications. The residents are more like those who the USPS was the lifeline and center of commerce that Ben Franklin saw when he helped to pioneer our model of universal service.

In our attempt to find solutions to the current financial the plan is to close a number of post offices. I hope that we can find a way to keep those open to those who it means the most. My trip to Arizona found many, and I know that throughout the west there are many more, just are there across a wide swath of the mid-west and south.

In our rush to find cuts within the USPS to help it find solvency we need to prioritize the personal services to those who need it the most. Let’s make sure that in our plans to financially reshape our postal services that local post offices can remain a hub and key service provider to those who need it the most.

The Initiative to Radically Change the USPS

Posted on August 14, 2011 by Lyn Bunch

Last month I posted on the issues that the USPS is dealing with in their search to find profitability. Profitability for a government agency? Yes, unlike every other unit of our government the USPS operates as a non-funded agency – they make all of their money from postal fees. Since 1971 they inherited their charter from the old Post Office Department by act of Congress. Since then they have had good years, and more recently some very bad years running up billions in debt.

There are a number of reasons for the debt, mainly high fixed costs for post offices and labor which they have little direct control over, and for a reduction in volume and shift in volumes from First Class to Standard or advertising mail which is now the primary mail volume flowing through our system.

I’ve lived through the changes since I got into the direct mail field in 1979. I found postal relations between the industry and local postal management to be poor since I was with a ‘junk’ mailer (Harte-Hanks). We were tolerated at best, totally disdained at worst. When we delivered our mail to their offices they held their noses. Later in the 80’s this changed when ‘junk’ mail became a very large portion of their profits. Now it is just an even larger part of their losses.

What is being proposed by the USPS leadership would be a major reshaping of postal services and focus. It would also mean major cost reductions, mainly personnel 120,000 to be more exact, and that will not set well with postal employees. They have come back with a ‘furious retort’ to management initiatives.

I won’t go into all of the details here, they are well documented in two white papers from the USPS. One WORKFORCE OPTIMIZATION lays out the general plan and rational for the changes. I’ve carped at the USPS for years that they had their heads buried in the sand, but this document shows they are seeing reality for what it really is- painful, but honest from my perspective.

The second document POSTAL SERVICE HEALTH BENEFITS AND RETIREMENT PROGRAMS details their initiative to handle one of their biggest burdens the healthcare and pension costs. In 2007 Congress forced the USPS to allocate the full cost of all future health care and pension costs into annual programs. Unlike any other like program the monies had to be set aside now. This extra burden was to ensure that all pension liabilities would be fully funded and banked, but this is the ONLY case that is so funded. This extra burden is the cause of the nearly 8 billion dollar shortfall for the USPS. Without that burden they would be breaking even.

For anyone who is interested in the future of our mail delivery system – including all of my marketing buddies, take the time to go over these white papers from the USPS. I will be scouring them myself, and talking with people in the mailing industry, marketing experts, fundraisers and others to see how they see this situation and see if they can offer solutions and insights. Back soon….

Analog Sherpa

Media, Marketing & Management For A Digital World

Tag Archives: government