USPS Service Cuts: Why Direct Marketers Should Be Worried

The announcement last week that the U.S. Postal Service plans to eliminate next-day delivery of first-class mail was hard news for direct marketers like me to hear.

Not because the direct mail campaigns our marketing agency creates require next-day delivery. In most cases, we mail standard class to get lower rates and we factor in the necessary delivery time when crafting a marketing plan.

But I got a sinking feeling when I heard this latest news. I fear that as service delivery levels fall and the costs of using direct mail climb, we may be nearing a tipping point when mail will lose its viability as a marketing channel.

Here’s what I think this news means for smart marketers whose strategies include direct mail marketing.

The Worrisome Implications of This Latest Move

The financial liabilities facing the USPS are staggering. The agency is working hard to find ways to cut costs and it has to consider all options. The most recent plan is to close more than half the nation’s mail processing centers, including ten here in Ohio.

We can probably get used to first-class mail that takes a day longer to get there. We also can probably manage without Saturday delivery, though many catalog marketers could find their call centers quieter on the weekends if the USPS gets approval of five-day-a-week delivery.

But think about the implications – for any service-based organization – of reducing service levels.

When your mission is to deliver a service, the last thing you want to do is deliver less service. The customers you have will leave and the ones you’re trying to attract won’t even consider you.

As old customers find new options – paying more bills electronically, sending e-cards instead of printed cards, using FedEx or UPS to ship packages, or using e-mail or social media instead of direct mail for marketing campaigns – and new customers stay away, a downward spiral can begin that’s hard to stop.

Fewer customers will mean lower revenue and the USPS may be forced to make even deeper service cuts, which will make using the Postal Service even less attractive. Where does it end?

Fuel for the Fire of Direct Mail Naysayers

As a marketing consultant and lifelong direct marketer, I strongly believe in the channel and often recommend it when planning marketing strategies for my clients. But even before this news, more and more of my clients have been telling me lately that they can’t justify the cost of direct mail compared with e-mail, web marketing, and social media.

If service levels continue to go down and costs continue to go up, even direct mail advocates like me could find it harder to make the case.

Oddly enough, there could be an upside for direct marketers if fewer people use mail. A less crowded mailbox could help your direct mail campaign get more attention. For some direct marketers, continuing to mail – indeed, even mailing more – could be a smart marketing strategy.

But for others, the reasons not to use mail could begin to outnumber the reasons to use it. Unless the USPS can become a healthy service provider, marketers who depend on it now will rely on it less and less.

Why I Hope I’m Wrong

Direct mail is one of the most effective marketing channels ever created. A creative, high-impact direct mail campaign is still among the most powerful ways to capture the attention of prospects and engage them in your marketing message. And while I’m dismayed at what I see happening with the Postal Service, I don’t believe direct mail marketing will end in my lifetime.

But the cost and quality of service could make it an increasingly unattractive option for marketers. That would be a sad outcome for those of us who have always believed in its value.

Do you think I’m wrong? Should I stop worrying? What do you think lies ahead for direct mail marketing, based on this latest news?