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Our mission is to unite and educate our members for their strength and prosperity. |  |
| Telling it Like it is to the USPS |
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| Written by Donna Hanbery, SMC |
 The Postal Service needs more business and volume if it is to survive, support its existing infrastructure and growing number of delivery points. The people at the Postal Service responsible for Mailing Services and Marketing are making efforts to reach out to existing, and potential, customers to learn what the Postal Service could do to build its business. Recently SMC took advantage of this willingness to learn to set up a meeting between representatives of the Postal Service Mailing Services department and Fran Smith, the Distribution Manager for the Reminder News. Great thanks and kudos go to Fran Smith for “telling it like it is” and showing the Postal Service why Reminder News will use the Postal Service on a starter basis, when it expands a market or opens a new addition, but will switch to its own adult private carrier force once consumers have come to recognize the Reminder News after 6-12 months of seeing it in their mailbox. Smith explained his background in circulation and distribution. With 30 years of doing daily papers in the US and UK, and more than 10 years at the Reminder News, Fran knows what he’s talking about. Fran said, “I wish we could use the mail. There are lots of good things about it, but the biggest drawback is costs.” Fran described how he has worked with six other large weekly papers to help them convert from mail distribution to private carrier. The revenues for many papers are simply not high enough to support the costs of postage. Smith has been asked to help these papers, and other papers, set up their own circulation department. Smith made it clear that he had nothing against the mail. If the Postal Service could just get the prices right, many free papers would prefer to leave the distribution process to the Postal Service and not have the additional management responsibilities of operating a carrier network. In an effort to get more efficiencies out of distribution, Smith described discussions that are taking place today among free paper publishers and other carriers, like the circulation departments of daily papers and even among competitors, to get lower costs for distribution. Smith stated many papers would do business with the Postal Service and pay more then they are paying for their own carriers; but they would not pay a lot more. Smith went on to describe that papers in his area might pay 9-1/2 to 10 cents per paper for distribution. This is with no limit on weight. Companies that compete against the mail can always steal from the mail. The prices for private carrier are fixed by the piece for delivery. There is no penalty or additional charge for pieces that are “over weight.” It is easy for a paper that distributes by private delivery to compete against anyone in the mail. Heavier pieces, like Sears and Penney’s, can be picked out of the mail because of the high cost of the pound rate. Smith told the Postal Service officials about private delivery throughout the country. In many areas, there is driveway delivery; in the northeast, it is mostly door-to-door. Smith said most publishers would like to be in the mailbox, but they won’t pay a big premium for the privilege. Most publishers would be willing to pay a little more than private carrier costs for mail distribution. But today’s prices, particularly with the pound rate penalty for papers that are heavier, is just too high. Smith also described problems with the Postal Service addressing requirement. When the Reminder mailed in the past, it used a DAL. “The DAL was important to us. We had to use DALs or we would have to change press times. If we had to put an address on the piece, it would slow us down dramatically.” Smith did a great job of describing the bewilderment of the free paper industry when they face the Postal Service addressing requirement. As the manager of a distribution network, Fran stated it was easy for his 400 plus carriers to handle do-not-delivers. Smith explained they might get one or two do-not-deliver requests on a route. “It is much easier for our carriers to look at a bundle slip that identifies the addresses to skip than it is to manage individual papers with addresses.” Smith also stressed that free papers do not have a lot of do-not-delivers because they are popular. “Even when we have a do-not-deliver request, because the paper got caught once in the snowblower, we find the consumer still goes down the block to get the paper at the corner store.” Free papers work for advertisers. They drive response. Smith gave an example of a potential advertiser who did not believe the draw of free papers. Smith told him to run a very small classified ad, with the doubter’s phone number. The ad said “Free Kittens.” After one day of exposure, the doubter called and said, “Stop running that ad! I can’t take any more calls!” Smith also explained how free papers compete against daily papers and TMC programs. When it comes to TMC competition, the privately-delivered paper has the upper hand. Everyone is going after the pre-print market for insert advertisers in a local area. Grocery stores are prime candidates. They want to cover everyone. “Grocers love us because we are saturation. Our private delivery rate is cheaper than the blended rate they can get in the paper.” One hundred percent mail cannot compete against the lower combined cost of a TMC program. Because a 100% privately-delivered paper can control its circulation costs, it can beat the insert rates offered by the newspapers, TMC and any paper that is 100% mail coverage. Smith stressed the local nature of free papers. The daily newspapers are in trouble because they are losing the national ads. Locally delivered saturation programs, by mail or free paper, do not have the national ads to lose. As dailies are moving more to on-line circulation, the weekly community papers and free papers will take over more of the local print distribution business. Local retailers still want to advertise. If the Postal Service can do a better job to align its prices and addressing requirements to the needs of the free paper industry, it could grow this business. SMC wants to thank Fran Smith for taking time to help us “make the case” to the Postal Service. For more information on or questions about this article or SMC, please contact: Donna E. Hanbery Saturation Mailers Coalition 33 South Sixth Street, Suite 4040 Minneapolis, MN 55402 (612) 340-9350/direct dial (612) 340-9446/fax Website |
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