ACMA Forum Recap: Conference Provides Pick-Me-Up From ACCM

Coming on the heels of the downcast ACCM conference in New Orleans, the American Catalog Mailers Association's (ACMA) National Catalog Advocacy & Strategy Forum offered the 50 or so attendees on hand some potential relief and plenty of optimism.

The event, coordinated by Hamilton Davison, the upstart two-year-old organization’s executive director and aggressive lobbyist for postal relief on behalf of catalog marketers, offered sessions featuring members of the Postal Regulatory Commission (PRC), the USPS and mailers. The focus was primarily on gaining more favorable postal rates for catalogers still reeling from the killer postage increase of 2007.

“There’s a tipping point happening right now that’s incredibly important to understand,” said ACMA Chairman Stan Krangel, who’s also president of Miles Kimball Co., a cataloger of gifts and novelties, in his opening remarks. “Unless we can get involved [in postal affairs], it’s going to be tough sledding. We need to take responsibility for our own destiny.”

The sessions from the event, which was attended by representatives from such marketers as Crate & Barrel, Uno Alla Volta, Ross-Simons and Paul Fredrick MenStyle, among others, as well as such vendors as MeritDirect, Direct Media and ParadyszMatera, primarily consisted of public dialogs with PRC and USPS reps. And such heavy hitters as PRC Vice Chair Nanci Langley and USPS President, Shipping & Mailing Services, Robert Bernstock, pledged to seek action to ease future postage punishment on catalog mailers.

“Collectively, you are being noticed,” Langley said. She reminded attendees that following the 2006 Postal Accountability and Enhancement Act (aka postal reform), which adjusted the role of the former Postal Rate Commission from rate maker to regulator, the PRC is no longer tied down by an outdated law from 1970 distancing it from mailers. “Our door is always open; we’re easily accessible,” she said, admitting that previously the PRC was largely unaware of the market implications of postage increases.

Most notably, as mailer advocate and attorney Joy Leong pointed out, the agency, by jacking up catalog rates during its last stand as a rate commission, didn’t take catalogers’ well-being into consideration. “Catalogers didn’t participate and there was nothing in the rate case record on ‘rate shock,’” she said.

Although the reinvented PRC is now more aware of the catastrophic effect of the huge ’07 rate hike on catalog mail volume and its negative impact on USPS revenue, it’s still focused on leveling out attributable costs of Standard Mail flats (catalogs) vs. letters. Letters for years have contributed greater coverage, and as PRC Assistant Director Margaret Cigno noted, there’s still more catching up to do.

“We tried to get on a level playing field,” she said of the 2007 rate hike, noting that flats were previously contributing less than half their weight compared to letters. The gap narrowed after the increase, but letters still contribute more.

And with more potentially damaging postage increases ahead, Cigno encouraged mailers to hire experts to look closer at their cost coverage and work with the PRC on ways to minimize the blow.

By the end of the PRC sessions, the ACMA’s Davison and attendees were working feverishly on pulling together a technical conference with the PRC, USPS and mailer reps to find ways to keep future rate hikes in check.

In a later session, Bernstock, who the USPS hired less than a year ago to bring his extensive private industry experience to the 800-lb. gorilla, held a similar open dialog with attendees on both its need and mailers’ need to design a new catalog delivery service that addresses catalogers’ needs in pricing, service, operational efficiency and operational cost containment.

“Costs are costs, but we’re willing to devote our resources to work with you,” he said. “It'll take a total systems approach to find ways. We’ll move mountains to make the Postal Service a strong and economic partner for the catalog industry.”

He broke down the USPS’s and mailers’ much-needed agenda as follows:

1. Price: to create prices that more precisely mirror catalogers’ needs and applications. The USPS, he said, will examine relaxing the piece and pound rates by expanding from the 3.3 ounce flat rate limit.

“This could lead to more pages and SKUs, better response, more sales and a minimal incremental cost to the USPS,” he noted. Beyond the much anticipated postage “summer sale,” which will offer significant discounts to high-volume catalog mailers from July 1 to Sept. 30, Bernstock said he’d like to explore other seasonal-based pricing and will address cost coverage issues.

2. Service: to examine changing service standards for catalog delivery. “We may be able to create a different set of service standards designed to meet catalogers’ needs,” Bernstock said.

He threw out the following possible scenario: Could catalogers live with longer delivery times as long as they’re consistent and predictable? Longer delivery times, he noted, create flexibility and cost reductions for the USPS; that could help fuel more favorable rates for Standard Mail flats in the future.

3. Operations: to optimize entry, mail preparation and makeup. Bernstock said the USPS could create a service for catalogers whose rules would improve the ease of use while encouraging efficiency through its flats sequencing system. “We have to work with you to have that lowest cost delivery system,” he said.

All his ideas on the table take increased catalog mail volume into account. “We want your volume, because we want to play the role of market-maker,” he said. “We want to design it to the specifications you want. We have the freedom within our cost coverage guidelines to be as creative as we choose to be.”

Treating his session as the PRC reps treated theirs, Bernstock asked the audience if they’re game for his ideas, and in all cases, mailers responded positively.

All was consistent with ACMA’s mantra, which Davison noted as being in the interest of building relationships with postal and PRC reps, as well as Congress. To date, however, “catalogers have been the single greatest under-represented” entity in postal rate setting, he said.