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U.S. Postal Service Using Junk Mail To Solve It’s Money Problems

Source: oran viriyincy via flickr

Call the U.S. Postal Service “crazy”.  Just make sure you add “…like a fox” to the end of it.  Plagued with mounting debt and a business model that isn’t achieving a profitable return anymore, the United States Postal Service is turning to the bane of many peoples existence to shore up their balance sheet:  junk mail.

The agency, beset by historic losses and a plummet in first-class mail, is running promotions, easing rules and planning television and radio ads to encourage more businesses to send pitches by standard mail, the official term for bulk mailings used by marketers to prospect for customers.

In many ways, the Post Office is starting to think like the traditional advertising media.

The postal service is trying to promote advertising mail that “matches up digital and hardcopy” mail, as a way to show companies that physical mail can drive consumers to their websites, Mr. Donahoe said. In July and August, the agency gave a 3% discount to any piece of advertising mail that had a special code that could be read by a smartphone.

The agency is also encouraging small businesses to use direct mail. It generated 501 million pieces of new advertising mail and $75 million in revenue between March and late September by easing rules on bulk mailing. Businesses can bring as many as 5,000 pieces of advertising mail a day to the post office, to be delivered by a carrier to every home on a route, without an exact name or address on the envelope, for 14.2 cents apiece. In the past, the postal service required envelopes to be fully addressed, which meant merchants had to purchase mailing lists.

So is it working?

The volume of first-class mail—used for everything from birthday cards to thank-you notes—continued its decline in fiscal 2011 that ended Sept. 30. It fell 7% versus a year ago through August, the latest figures available.

But advertising mail increased 3% after remaining flat in fiscal 2010, and now accounts for 48% of all mail, according to the postal service. The mailings, requiring at least 200 pieces or 50 pounds, have average postage fees of 19 to 21 cents a piece and a delivery time of two to nine days.

Post Office’s Rescue Plan: Junk Mail – WSJ.com.

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