How the Catalog Fits Into the USPS’ Future

Simply put, the U.S. Postal Service can’t afford to have catalog businesses continue to go under. Consider the following:

* catalog postage accounted for approximately $3 billion in revenue for the USPS in its 2007 fiscal year, 4 percent of its total revenue;

* 21 percent of all priority mail revenue is catalog- or Internet-purchased merchandise; and

* catalog transactions generate reply mail between companies and their customers, thus increasing volume for the USPS.

With the USPS recognizing this fact, it’s begun to shift its practices toward creating a partnership with catalog mailers, in the hopes of securing profitable futures for both entities. In fact, the USPS employs more than 1,000 people who are responsible for building sales strategies for direct mail, in particular pushing merchants to enter the catalog business. A recent campaign from the USPS saw it mail postcards to every household in the U.S. highlighting the benefits of direct mail.

At last month’s National Catalog Advocacy & Strategy Forum in Arlington, Va., hosted by the American Catalog Mailers Association (ACMA), David Mastervich, manager of sales strategy for the USPS, offered a series of tips on how catalogers can still flourish, and continue to produce mail volume, even in this difficult economic time.

1. Hit for the cycle. Remember the cycle of successful marketing, Mastervich said: engagement, relevance, personalization and precision.

* Engagement. Help your customers become interactive with you by allowing them to control the relationship. Determine “how they want to be communicated with,” Mastervich said. Increased frequency, both in the form of dual media (catalog and e-mail) and catalogs alone, yields significantly higher response rates, he pointed out.

* Relevance. According to JupiterResearch, relevancy of the message improves campaign revenues by nine times over untargeted broadcast mailings, and revenues increase by an average of 18 times. Use RFM data to analyze when customers are buying from you, Mastervich advised. “Understand their buying and they’ll purchase more,” he said.

* Personalization. The key is to use this tool without crossing the line to being “creepy,” Mastervich said. “Don’t let the consumer know you know so much about them,” he added.

* Precision. This involves putting all of this together in the correct order, particularly timing and deliverability. Know the optimum time for your catalogs to be in-home, and then work to deliver on that, Mastervich said. Also, it’s important for your call center to beware of in-home dates, he added, so it’s properly staffed to handle surges in call volume.

2. Practice good hygiene. Undeliverable as addressed mail costs the USPS $5 billion a year, Mastervich reported. “Cleanse your lists, particularly addresses that are obtained on your Web site,” he advised.

3. Offer options. Citing the statistic that 47 percent of all consumers abandon shopping carts, Mastervich advised the audience to offer all shipping options on their Web sites. Don’t give the consumer a reason to abandon a purchase at the last moment because of high shipping costs.

“How can the Postal Service partner with catalogs, cause in reality one depends upon the other?” Mastervich asked the audience. If this ACMA event is any indication, where several members of the Postal Service’s top management have participated, including Postmaster General and CEO John Potter, it appears the process has begun.