May 21, 2002 Volume 1 Issue 50
Postage Rates Around the World
There is much chatter in the Direct Marketing industry about postage.
Always has been. Guess there always will be.
Since I've been in this business more than a day and half I've seen big time changes in the United States rates. As a young boy I remember the penny post card and a 3 cent first class rate.
Yet, there are some in our industry who cry every time the United States Postal Services raises rates. Like it's postage that is going to put them out of business. Well, in my opinion, if postage is putting anyone out of business their business did not have much of a foundation.
Does it hurt when rates go up? Sure! Does the USPS need an overhaul? Yes! Is postage our most important concern? I think not.
About 6 weeks ago staff writer Howard LaFranchi of the very credible Christian Science Monitor did a heavy duty article on postage. Here's part of what I gleaned from his words, combined with knowledge I've learned over the years, and mixed with facts and figures from a number of sources. A truly mixed green salad.
Postage in the USA is a bargain. Am I nuts in saying this? I don't think so. Here are the facts. The States is toward the bottom of the stack when it comes to the cost to mail a letter. Look at these fees (in US/$ terms) from other developed nations, as of this date;
Sure, there are some lower. Mainly in select parts of Asia, such as Hong Kong, and in the Caribbean - such as Jamaica. Yet, overall, rates in the USA are reasonable compared to the rest of the globe. And service is much better.
You don't believe me, do you? Well, spend some time in Pakistan and Zimbabwe, even Brazil and Spain and you'll change your mind. In those places where the market is small and the attitude is pro-business, the post is doing well. Such as New Zealand. Singapore. Australia. Belgium.
A quick story from that small, major European country of Belgium. If you get your business-to-business mail into the post office by 10:00am on a week-day business morning, it will be delivered to another business within Belgium by 4:00pm that afternoon. Sounds wonderful - right? Well, even I could do that. Belgium is not much bigger than your office. You can drive across the country and not miss a meal.
This is not to say Belgium is wrong. They offer a great service to business - good for them. What it is saying is we in North America (Canada, Mexico & the USA) must remember how big our geography is. Not just population - geography, too. It's a long haul from northern Maine to southern California. From Blaine, Washington to Key West, Florida. Without thinking of Alaska, Hawaii, Puerto Rico, the Virgin Islands and such.
A few numbers. The volume of mail is one reason our rates are as low as they are. Close to 200 billion pieces of mail go through the USPS every year. That's over 40% of the world volume of mail. The States has a population approaching 300 million. The world population is over 6 billion. Yet, we create far and away more mail then anyone else.
Bob Cohen of the Postal Rate Commission in Washington says it another way;
Back to Europe with an example based on the Cohen quote; it costs more to deliver in Germany because they have 1/3 the volume of the United States. This makes sense to me - and I'm sure to you, too. To everyone in business. Especially our DM business, where we know the extra cost for more, once we've begun a project, is zilch compared to the start up.
More numbers. Think you're getting too much mail? Move to Cambodia. This southeast Asian country of 13 million people distributes just 40,000 (yes, that is thousand) pieces of mail a year. One letter for every 325 people. If you want isolation, this sounds like a good place. Although not much else about it sounds so wonderful.
Why is there so much mail in the USA - and other well developed countries? Because it works. Yes, E-mail has hit deeply into the direct mail pocket. E-mail will continue to grow, too. In my opinion, at the expense of both direct mail and the telephone. Soon there will no reason for a fax - a telecommunications tool. Just as the old Western Union died, the fax is going to go away. E-mail will replace it in total. Soon.
Yet, direct mail is different. It is still the preferred way to get many messages to many people. Reading has not stopped because of electronics - if anything it has picked up. And ... the paperless society is a myth that will not happen. Not in your grand children's grand children's life time. That theory may have sold computers for IBM in the '60's and '70's - the idea of a paperless world. Yet, it just ain't gonna happen. Period.
And, there are major centers where mail is UP in volume since E-mail became a communication tool. And since September 11. One is the Greater Phoenix, Arizona Post - close to where I hang out. There the postal volume is up and growing. Why? They service the business community on a personal 1:1 basis - and do it well. I know - I "see" it.
Yes, there are stories of bad to horrible postal service. So bad private delivery couriers are a growing business. And, there is postal mis-management, too. Labor problems that should not be. Plus, other not so pleasant experiences by customers.
Yet, show me any business with a 200 billion volume of product every year, and there will be problems. It happens. Not an excuse - yet, a true reason the USPS needs to raise rates. And plan now for a re-organization - hopefully soon. And in the between time work on customer service.
Direct Mail ... I love it!
Over the last several months this old dog has learned many new "tricks".
This "new" learning began with 41 consecutive days on the City of Hope Oncology floor at the Good Sam Hospital in Phoenix, Arizona. Plus 6 more days of out-patient - and then a series of weeks - months of re-hab. Boy, did I learn about family, friends and people.
Which leads to this issue of The Works of Marketing with Ray. And another quote that hits me right between the eyes. Maybe it applies somewhere in your life, too;
"There is no better mirror than an old friend."
"Quotes with Direction" has been a part of my web site collection from day one. If you like quotes visit the archives ... www.rayjutkins.com/quotes/. There's a new batch up every 4 weeks.
A Baker's Dozen Way to "Think Creatively"
A national USA Sunday publication ran a mini-article on how to think. It caught my attention - and got me to "thinking" about thinking. Especially about taking time to think ... something many in business do not allocate time to do. This week I'm reeling from being asked to perform a complete "fix" in 60 days of a mess made over 6 months. In addition to no time they are without sufficient money or people. At least to meet their objectives.
So, there is not enough money, nor staff, or other outside resources immediately available ... and certainly not enough time. And still this organization wants a positive cash flow in 2 months - no matter. Nice people too - yet, we agreed to disagree. What's this got to do with thinking? Well, I think a lot! Because if this group had done enough thinking up front they would not be in the hole they're in now.
They couldn't wait to take a "new" idea and run with it. Now they're paying. For the full story on 13 Platinum Ways to "Think Creatively" in the 21st Century click here.
A couple of times over the last 30 days my web site collection generated a question about collectable and limited edition offerings.
Those asking were looking for statistics. How many people are hobbyists who collect. Why limited editions have appeal. Why a series based on a theme or character. And similar.
In each instance my response was not helpful; I have not specialized in that arena, and do not have meaningful numbers to share. Yet, it did get me to thinking.
USA Today had an article about customization being offered via the World Wide Web. Although not normally limited, and most often not part of a collection, customizing appeals to those who want to be individuals. And not part of the pack. I think the profile of collectors of limited editions and those preferring a custom product are most likely very similar.
These people are most often first on their block with a new widget for the home entertainment system that fills their house with sound. Their car has air bags front, back and side. They own a super deluxe personal computer, vs. the low end special. This type of person likes to be recognized as a forward thinker - ahead of the rest.
Well, it may be time for customizing via the web to become a big deal. Recent history has not be kind to such offerings. MyCereal.com from General Mills didn't make it. Seems most of us did not want to build our own combination cereal from a selection of 100 ingredients, such as honey nut clusters and whole grain oat flakes.
Levi Straus had a big time problem with blue jeans - and only recently has returned with an offer and site that appears to be working well.
As with almost every thought that comes from the WWW there are those who feel customization is good - others think it is not going to make it. Ken Cassar of Jupiter Research says " ... customization works best with expensive and complex products like computers ...".
On the opposite end is Robert Halloway, CEO of Archetype. He works with major stores to develop customized clothing. "Retailers that don't have a customized offering will be at a disadvantage" says Halloway.
LandsEnd.com - those famous direct marketers from Wisconsin, are deep into customization. I like these people - have bought a number of things from them over the years. Although not a major customer, I am a customer. And a believer in their products and service. Can they transfer this to customization? Well, they are trying ... and so far seem successful.
Lands End asks for a collection of personal measurements; height, weight, shoe size, and body shape details (my guess, based on a bit of experience with female flight attendants being fitted with a new uniform, is many body shape details are "lies"!). A computer generated pattern is developed, the garment is manufactured and shipped to the customer in 2-3 weeks. A premium price for this service is charged; 30-50% over the rack rate.
What is happening that is certainly good for marketing is this custom service from Lands End is attracting new customers. Most who have not shopped online before. Who are finding the personal approach meets their needs.
A couple of times I've had customized boots made for me. Once in Hong Kong, where I picked the leather, style, shape, size - everything. My measurements were taken, the shoes made and shipped to my USA home. They were my favorite for a number of years.
A couple of holiday seasons ago Nancy (my bride) had a hand made pair of dress boots made for me by a USA national retailer. We got their catalogue, followed directions and ordered online. The only "problem" was service, which was horrid; the product arrived for Valentine's Day, vs. Christmas. And although the product is fine - poor service will kill anyone who plans an online operation.
Nike has established customized order pages within their web site. In 1999 Nike, Inc. began offering consumers the unique opportunity to create their own esthetics for athletic shoes. The program has been successful ... so much so it is now being expanded.
Beginning a month ago Nike.com began allowing customers to customize the function of their running shoe. Meaning, personalizing features of the outsole, the amount of cushioning, the width. At a very reasonable $10. additional vs. that available off the shelf.
These examples do not mean everything can be customized and sold over the Web. It does mean the door is wide open. I'm certain many will walk through.
by ROCKINGHAM*JUTKINS*marketing, all rights reserved.