Can Russias state-run postal service deliver the goods direct marketers?

Can Russia’s state-run postal service deliver the goods for direct marketers?

IN THE majority of Western countries, businesses and consumers take a reliable postal service for granted. Once a letter or package is posted, it’s expected to be delivered within the timescale paid for and for it to arrive intact at its destination. But what about the postal systems in countries having to cope with the joint challenges of economic and political upheaval after the fall of Communism?
Russia, one of the countries that has faced these issues, offers vast business potential for direct marketers, but capitalising on this fact can be easier said than done. Its State-owned postal system, run by the Federal Mail Service Board, is having to deal with the demands of a free market economy dragging itself into the new millennium and compared to, for example, the British or American postal services, it is antiquated to say the least. So in order to take advantage of what Russia can offer with regard to direct marketing (DM), it pays to become au fait with its primitive postal traditions.

Stamp duties
Mention Russia and we think back to the bureaucracy of the old Communist days. Today Russian red tape still prevails, but it isn’t as bad as you might suppose. One of the biggest administrative factors to take into account is that there is no such thing as postage paid in Russia. So it’s back to the old custom of licking stamps. It’s a good thing that local labour costs are minimal, otherwise bottom line budgets could be easily blown!
Another problem regarding the lack of postage paid is if you wish to provide return envelopes in any direct mailouts: stamps have to be added, so this means you’ll be outlaying postage costs irrespective of the desired consumer response. Furthermore, as a business sending out more than 20 registered parcels you have to provide a separate list to the Post Office, stamped by the director of your company, that details the addresses, value and description of the parcels’ contents.
Security measures
All we seem to see in the media these days are stories about the high rates of organised crime and corruption in Russia. However there is little evidence of either in the postal service itself. Having said that and as with any country, it’s obviously not a good idea to send something of value through the postal system as it could go missing. And in Russia it isn’t likely to go astray on its travels to its destination, but at the destination itself: many apartment buildings feature inhabitants' letterboxes in the foyer and these are notoriously easy to break into.
A good way to overcome security problems is by registering mail. However be aware that the tracking of registered mail isn’t exactly efficient, with spot checks taking place on whether mail has
actually been delivered on a mere seven out of 170 items.

lime and motion
Russia is big. A country with nine time zones means it will seem forever for post to travel from one end of the country to the other and brings a new meaning to the term snail mail’! Post takes between two to three weeks to reach Vladivostock (the furthest city from Moscow).
Mailings within central Moscow to the regions can take between four to 10 days. This is due to several stage posts and distribution points where postage is divided into areas. Mail to an address posted in the same city takes, on average, two days to arrive.
You need to take into account that time is not of the essence to Russian postal workers, hence interminable delays due to slow mail handling.

The price is right
As you would expect, the price of postage is fairly cheap. It costs between two and 10 roubles (US$0.07 to $0035) to mail a standard letter This is perhaps because direct marketing has yet to firmly sink its teeth into the Russian market and, unlike the UK’s Royal Mail, the State has still to realise the huge revenue potential through postal stamps.
It’s more than likely that the Russians will catch on sooner or later and future price rises cannot be ruled out, but for the time being, in true State tradition, postage costs are something that will remain low.

Tracking down consumer data

So what happens if you want to carry out a direct marketing campaign in Russia? Where can you get the data?

There are lists of consumers but the majority of databases lack any real profiling. This isn’t aided by the fact that Russians are reluctant to give out personal details about themselves as there is a prevailing mindset that this information will fall into the wrong hands and be used to burgle their homes.

Lists can be purchased from DM agencies, but it can be better to buy them from goods and services companies, such as satellite TV providers (eg Cosmos TV), mobile phone providers, mail order companies, etc. who have data on their consumers. However these goods and services companies prefer to invite a third party to piggyback on their mailings rather than sell their data.This, though, isn’t always the best option — particularly when you are at the mercy of their creativity on the envelope. At present it is preferable to build your own consumer lists and this is something that we at Tarantula are currently doing.

Big issues

The Russian postal service still has a long way to go before it is on par with its Western counterparts. As a result there are big issues to address for direct marketers looking for opportunities in the Russian marketplace, including a need to improve on delivery times and to move away from stamps in order to make large DM campaigns cost-effective.

In addition, consumer lists — vital for any DM campaign — need to be upgraded for a maximum return on investment from any DM activity

The foundations are in place for a good postal service but it is up to the State and, to some extent, the input of marketers as to whether Russia’s postal system will fully enter the 21st century