A request filed last week by the United States Postal Service with the Postal Regulatory Commission would allow the agency to implement a new program designed to prove the effectiveness of direct mail. Companies that don’t already use direct mail in their advertising mix would be enticed to do so by the program’s money-back guarantee on postage, which would kick in to the tune of as much as a quarter million dollars per company should their test marketing campaigns not produce the intended results.
Initially being offered to 16 companies from a range of industries, each of which spends a minimum of $250 million annually on advertising other than direct mail, the “Mail Works Guarantee” market test will be evaluated based on a set of jointly agreed upon and unique metrics for each company. For instance, a restaurant chain’s campaign effectiveness might be evaluated on the amount of increased traffic or sales of a specific menu item, while a retailer’s might hinge on online sales of a certain line of clothing or other specifically marketed goods.
According to the USPS’s April 15 notice to the Postal Regulatory Commission, “the top advertisers in America represent $90 billion in total expenditures for media advertising.” Of that amount, the USPS' share is only about 3.1%, or a rough total of $3 billion per year.
It’s no secret that the post office is struggling to make ends meet given its self-supporting status and the huge toll that the Internet has taken on postage sales in recent years. Being able to capture an even larger piece of the annual corporate-advertising-dollar pie would be a terrific windfall.
Despite the fact that the initial test run of the program will focus only on larger companies, the findings generated by the pilot effort may very well hold some interest for home-based or other small business or franchise owners, many of whom still use direct mail as an integral part of their overall marketing mix. Should the program be successful, it may serve to reinforce to these smaller-sized operations that direct mail should continue to have a role in their marketing efforts. Of course, if the results do not turn out as the USPS feels confident they will and do not confirm direct mail's effectiveness in every case, then there may be lessons to be learned from each of those scenarios as well.
According to the USPS, depending on the pilot's results, it may file a request for approval to offer the program to additional companies in the future.
The USPS is currently awaiting confirmation by the Postal Regulatory Commission to proceed with the “Mail Works Guarantee” program as it has been described and set forth under filing ID number 72503.
