Key Takeaways From Quad’s Conference of Postal Industry Leaders

March 16, 2020

Quad’s 21st Postal Conference in Washington, D.C. convened last week to discuss complex issues facing the United States Postal Service. A mix of leading publishers, catalog mailers and promotional mailers attended, together representing a large percentage of the country’s overall postal volume.

The USPS faces more significant challenges than ever. With a sustained migration of customers to the digital marketplace, the institution must make major changes as soon as 2021 to simply keep the service viable.

Postage accounts for over 60-70% of the cost for every printed piece. It’s incumbent upon everyone in the industry to work together to provide reasonable and immediate solutions. Collaboration is the best way to keep traditional marketing as a viable piece of the channel and publishing mix.

Quad developed a conference agenda that featured presenters from the highest levels of the postal industry, including:

Megan BrennanUS Postmaster General
Sharon OwenVP of Pricing, USPS
Dave WilliamsUSPS Board of Governors
Jakki Krage-StrakoCMO, USPS
Robert TaubChairman, Postal Regulatory Commission
Steve KearneyANPM
Mike PlunkettPostCom
Hamilton DavisonACMA

Attendees interacted face-to-face with these policy-makers, to voice ideas and concerns. Several themes emerged from these sessions. Three stood out as the most relevant — and the most urgent.

1. The eventual solution needs to reach beyond pricing.

A significant amount of dialog centered on pricing. The self-funded USPS has traditionally used price increases to offset growing operational expenses and shrinking postal volume. With liabilities now reaching nearly $72 billion, the price increase is no longer a viable solution. Several attendees made it clear that it would significantly decrease their mailing volumes. This would make the problem worse. Many, led by Quad CEO Joel Quadracci, voiced strong opinions for how the USPS should be held to the same pricing dynamics experienced in the private sector. A call for the Postal Service to become more innovative and efficient was clear — attendees suggested solutions for new revenue streams. Unfortunately the gap between the pace of digital migration and legislative speed is growing, making an easy solution unlikely. This will present challenges to sustaining direct marketing as a profitable channel.

2. Part of the solution may be found in clarifying the USPS mission.

Attendees heard from multiple presenters that a significant step forward for the USPS would be to revisit the overall mission of the organization. Given the ongoing evolution of digital, its decades-old mission may no longer be viable. Robert Taub, the Postal Regulatory Chairman, emphatically highlighted the need to revisit the USPS universal service obligation (USO). As things stand, future postal viability may rely on a change in USPS service standards, new classifications and a careful review of products and services. Several presenters pointed out that a change in the USO would reflect pressing needs in the marketplace, which might not necessarily be reduced levels of service.

3. Amid financial and structural challenges, collaboration is necessary across the industry to develop innovative solutions.

While a portion of the conference was centered on the looming issues facing the postal service, the majority of the two days consisted of peers sharing best practices and opportunities to maximize postal efficiency and effectiveness. Two notable panel discussions featured industry marketing leaders representing publishers, catalogers and promotional mailers. One group of panelists presented examples of how they partner with Quad to drive continued postal efficiencies. By using services like commingle and co-mail, they have offset the pricing pressures from the USPS. The second group included experts in catalog and publishing who discussed the need to continuously evolve. They also continue to use mail to make their marketing mix more effective. Jakki Krage-Strako, CMO of the postal service, shared the USPS marketing strategy, and research data that supports the view that mail in today’s complex landscape is still very important.

In addition to these macro themes, the conference provided an excellent platform for the marketers in the room to directly voice ideas and concerns about postal reform. Marketers and publishers all face the same challenges. The need to fully understand costs and a continued commitment to address these pressures won’t ever go away. Postal reform must provide a sustainable path for the USPS. Predictable cost structures will enable commercial postal customers to plan and forecast their biggest direct marketing expense.