What the ‘New’ US Postal Service  Means for Your Business

By Kathy J. Siviter

The U.S. Postal Service (USPS) is in the midst of a sweeping reorganization and change in focus, which began with the October 2010 appointment of a new postmaster general, followed by significant organizational changes in January, which will continue for some months to come.

What does this mean for cross-channel retailers and others who depend on the use of the mail? According to the new postmaster general, it means a new focus on improving the customer experience and growing the mailing business.

Changes Began at the Top
The USPS's organizational changes really began when former Deputy Postmaster General Patrick Donahoe was appointed postmaster general (PMG) upon the retirement of former PMG Jack Potter.

To date, the new PMG has made changes or announced plans which include a 16 percent to 25 percent reduction in the USPS's headquarters/senior management ranks; a possible reduction in workforce and/or voluntary early retirement process to come; a new "flatter, leaner" organization; consolidation/elimination of field organizations at the area and district levels; and a more aggressive focus on network design changes, including consolidating processing facilities and post offices.

Along with the new leadership at the USPS comes a new focus: improving the customer experience and growing the mailing business — both for the USPS and for companies and service providers that use the mail.

The USPS has created a new consumer and industry relations organization as the first step in its efforts to improve the customer experience. The organizational changes to date also bring new resources and focus to the USPS's information technology, engineering, mail acceptance/postage payment and product information organizations under one umbrella, headed by a newly appointed chief information officer with a strong operations background.

Concrete Changes in Approach Already Being Seen
Proving it not only can "talk the talk" but also "walk the walk," the USPS's leadership already is putting in place changes that demonstrate its new approach.

The USPS announced that it no longer plans to require mailers to switch to Intelligent Mail barcodes (IMb), which was to be implemented in May 2011. Instead, it plans to increase the value of IMb to the point where it hopes customers will choose to switch from POSTNET barcodes to IMb on their own accord. The USPS has said it will provide enhanced mail visibility data to IMb customers in the future at no charge, and it's working on other ways to improve the value of using IMb.

The USPS also announced an unprecedented move involving refunding postage fees erroneously charged to IMb full-service mailers for some address correction notices. This is something the USPS had advertised as a "free" feature of that offering. The USPS has also changed the way it updates its software releases, which impacts not only presort and mailing software developers, but end users such as catalogers. It's strengthening its IT focus to look more at customer-facing systems, and recently announced plans to move to an "easy payment" system next year.

What Does it Mean for Your Business?
The changes the USPS is putting in place in terms of its organization, leadership and focus already are having an impact on those cross-channel retailers which use the mail as a marketing vehicle. Catalogers and others may see changes in local or national USPS contacts, as well as a renewed focus on the USPS's behalf to strengthen its relationships with its customers.

The USPS also plans to better use technology and data to track its costs and ultimately set prices. Companies producing mail pieces that don't process well on USPS automated equipment should make a renewed effort to look at potential design changes.

In keeping with its new focus, cross-channel retailers hopefully will see more attention paid to improving all their experiences and contacts with the USPS. The USPS plans to bring new products and services more quickly to market, and has vowed to work to build and enhance the value of mail to grow the mailing business. If your company has an idea on how to grow its use of mail or make doing business with the USPS easier, this is the time to meet with USPS leadership and discuss it.

The bottom line is that 2011 will bring much change to the USPS and, directly or indirectly, to cross-channel retailers, catalogers and other marketers who communiciate with their customers via the mail.

Take advantage of the opportunities and pay close attention to changes in processes, procedures and policies that the USPS  will be announcing over the next year.

Kathy J. Siviter is president of postal consulting agency Postal Consulting Services. Reach Kathy at kathys@postalconsulting.com.