USPS to turn simplified direct mail service into $1bn product

The US Postal Service is mounting a major advertising campaign it hopes will propel its simplified addressing direct mail service into becoming a billion-dollar revenue generator. The Every Door Direct Mail (EDDM) service allows businesses to easily pick local neighbourhoods or towns in which to deliver direct marketing materials to every home, without having to provide USPS with individual household addresses.

Based on the 14.5-cent saturation mail postage rate, the EDDM service does away with the need for businesses to have permits to use the mail, uses web-based tools to determine how many mailpieces would be required and what the costs would be for a certain area, and offers information on local print service providers.

The service was piloted successfully last year, generating $153m in revenue during 2011.

Yesterday, USPS launched a multi-channel advertising campaign to push the service particularly at small businesses that do not currently use the mail for advertising, or those that do not currently advertise at all.

Advertising is appearing on TV, radio and in print publications, supported by a direct mail campaign, all funded from the USPS $100m annual advertising budget.

The focus of the campaign is that with American audiences increasingly splintered between hundreds of TV and radio channels, as well as and thousands of websites, direct mail sent to households could be the best way for small businesses to reach their customers.

Paul Vogel, the USPS chief marketing/sales officer, said 70% of American businesses employ less than 20 people, and that only 28% of small businesses are currently using direct mail to promote themselves.

“We believe that this could be a $1bn product for the Postal Service by 2016,” he said.

“The whole concept is to make it simple. A lot of small businesses believe it is very complicated to use the mail – and many of those that are already using EDDM are doing so because it is simplified.”

Small businesses

The average mailing for the EDDM service so far has been in the region of 2,000 pieces, worth around a $300 value in postage.

John DePaola, whose business Long Fence and Home sells and installs household doors and windows around the Maryland, DC and Virginia area, told Post&Parcel that he had used direct mail before, but that the EDDM programme was opening the door for a considerable increase in his direct mail advertising spend.

“A company like ours, we can’t get the message out if our customers are all looking at different TV channels and websites – we can’t predict which radio station they listen to, either. But we know our customers are checking their mail every day,” he explained.

DePaola, who is expecting to use the service again in a few weeks’ time for his next campaign, also said the EDDM programme allows him to use more eye-catching single-piece direct marketing, rather than addressed letters.

“People don’t want to open letters any more if it’s advertising,” he said.

Gateway

While the new advertising campaign will be pushing the retail side of EDDM, in which small businesses can simply go to their local post office to hand in their mailings, the EDDM service also continues to offer an option for higher-volume mailers.

This allows mailings from 500 pieces up to 1m pieces to be dropped off at business entry points, rather than in post offices.

The billion-dollar goal for the programme includes those larger mailers, confirmed the programme’s manager, USPS mailing services marketing specialist Edward Newhook.

However, Newhook told Post&Parcel that with the impact of the advertising campaign, USPS now expected the retail side of its EDDM programme to account for much more revenue than initially thought.

“We did initially believe it was going to be a 35% (retail) to 65% split, but now we expect it will be much closer to 50-50,” said Newhook.

Vogel told reporters yesterday that EDDM was a “gateway” product, showing businesses how they could benefit from using the mail for marketing purposes.

Having used the product, the theory is that companies that grow or find they have more sophisticated campaign monitoring requirements would then move on to other USPS direct mail services.

“Our product is designed for small business owners who have limited resources to get them using the mail,” he said. “This is more than just a postal product, it’s showing people the value of the mail.

“You only have to look at the Youtube videos from people talking about the success they’ve had from Every Door Direct Mail – we’ve had people finding lost dogs in their neighbourhoods with this product, even politicians are using it.”