An Information Powerhouse

The Postal Service has a “long vision” of providing detailed tracking of mail from acceptance to delivery (100% visibility). This is a world of difference from the black hole that described postal operations just a decade or so ago. A lot of the industry discussion to date have been about various missteps, complexities, and, most of all, the added costs of compliance with the requirements. What is happening is that four distinct customer segments are being created around the use of data. At the same time, the Postal Service is building a new capability that will allow it to reposition itself along the value chain and in the marketplace.

1.       Traditionalists: Service Improvement, Cost Reduction, and Customer Satisfaction

The primary goal for this user segment is to drive operational efficiency. The Postal Service itself is the primary user in this segment, although all its customers and partners will benefit from continuous improvements in service performance, cost reduction, and improved reliability. In some ways, this is a “business as usual” approach, but taken to a higher level – a step change in value from the application of “lean” techniques that industrial engineers, cost accountants, and operational managers have long known about. All they wanted was better data.

2.       Enhancers: Adding New Value

More sophisticated users will be able to apply powerful analytic tools to the rich data that is now available, and they will create new ways to more effectively use the mail. Some users will combine postal data with their own information about customers or data available from third-parties to create more effective targeting. This is the application of familiar techniques for marketers – but taken to the next level with more and better data. Other users will find different ways to use the mail, building enhanced insight into the network and developing innovative ways to leverage the network’s capabilities. This is where it really gets interesting, as entrepreneurs – many from outside the traditional industry boundaries – get more involved.

3.       Simplifiers: Making it Easy to Demonstrate Results

Most small and medium business users will not have the time or ability to apply or use the new data. They want to use the mail to successfully achieve their goals – reach customers and build relationships, conduct transactions, advertise and ship packages. They want assurance that their mail was delivered and that it generated results. This is the world of the sales force, which has been begging for ways to document that mail-based products and services work well and can enhance the effectiveness of cross-media campaigns. There is a whole new class of sales support applications waiting to be developed by linking postal and industry data to demonstrate response rates, return on investment and other business results.

4.       Trackers: Building Trusted Relationships

Consumers, or recipients of the mail, want assurance that they are getting the mail they expect or want on time. Tracking really matters. Being able to pro-actively inform customers where their mail is and to notify them when to expect it and when it arrives will be a powerful tool to build trust in the mail channel. Giving consumers the additional power to provide guidance on their preferences for delivery will further enhance the customer experience or the “mail moment”.

An Information Powerhouse: Repositioning the Postal Service and the Mailing Value Chain

The USPS Mail Moment studies demonstrated the power of the feedback loop between the users of the mail and the businesses that send it. One of the key sessions in the upcoming PostalVision 2020 Conference, presented by Professor Marshall Van Alstyne from MIT, will focus on this dynamic. The Postal Service and the industry have the opportunity to collaboratively reposition the mailing value chain from a processing and delivery channel to provide a much broader range of services – without leaving the core business of mail and package delivery.

The Postal Service has considerable technological prowess, but it has been concentrated primarily in materials handling (mail processing), logistics, and distribution. It is extending that capability into the areas of user interface (e-induction, seamless acceptance, customer service, and related areas) and into delivery. Underlying it all is one of the largest communications infrastructures in the country. The old network, still in place and in use for some applications, is rickety and desperately needs to be replaced, but the emerging system is tremendously powerful. As more funds become available for investment, the capability could grow exponentially. Building collaborative interfaces with mailing service provider partners, entrepreneurs, marketers, and other digital giants (Amazon, Facebook, eBay, etc.) will place the Postal Service in a unique position.

The ability to connect with the Postal Service through a digital interface will be universal (initially through e-induction and seamless acceptance). The Postal Service will be able to connect digitally with its vast customer base (through its tracking and delivery notification interfaces). Connecting the two repositions the Postal Service as a digital service provider, especially given potential postal enhancements to trust and security in the digital world.

By Kent Smith

Kent Smith is Research Director, Ursa Major Associates / Postal Vision 2020. His 38 year career in the Postal Service included Rate Classification Research, Market Research, and Strategic Planning. Ursa Major Associates / Postal Vision 2020 is dedicated to taking a broader, longer-term perspective on the future of the mailing industry ecosystem. The thoughts expressed in this “Point of View” are his own.

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