By Flint Lane of Billtrust
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Showing posts with label USPS. Show all posts
Showing posts with label USPS. Show all posts
Thursday, February 17, 2011
Friday, March 27, 2009
95% of Utility Bills Still Sent Through Mail
Posted by Mark Brousseau
Utilities continue to incur high costs due to distributing 95 percent of their bills through the mail, according to Chartwell's survey of 94 utilities. Bills sent through the mail are more expensive than bills delivered electronically.
Some utilities have seen success in decreasing the percent of customers receiving paper bills. One utility with more than 300,000 customers enrolled about 20 percent of its customers in paperless billing through promotions on almost all of the material produced by the utility. This utility also incentivized employees to enroll customers. Another utility company, Arizona Public Service, donated $1 to the Tree Research and Educational Endowment every time one of their customers signed up for paperless billing over a three month time span. Arizona Public Service was able to switch almost 17,000 customers from high-cost paper bills to low-cost electronic bills.
While consumer marketing has been successful in decreasing paper bills mailed out, many utilities are looking to cut costs by delivering bills through secure email. In an effort to reduce the costs of distributing bills, 40 percent of utilities are planning to offer or are considering delivering bills through secure email, Chartwell says.
Utilities continue to incur high costs due to distributing 95 percent of their bills through the mail, according to Chartwell's survey of 94 utilities. Bills sent through the mail are more expensive than bills delivered electronically.
Some utilities have seen success in decreasing the percent of customers receiving paper bills. One utility with more than 300,000 customers enrolled about 20 percent of its customers in paperless billing through promotions on almost all of the material produced by the utility. This utility also incentivized employees to enroll customers. Another utility company, Arizona Public Service, donated $1 to the Tree Research and Educational Endowment every time one of their customers signed up for paperless billing over a three month time span. Arizona Public Service was able to switch almost 17,000 customers from high-cost paper bills to low-cost electronic bills.
While consumer marketing has been successful in decreasing paper bills mailed out, many utilities are looking to cut costs by delivering bills through secure email. In an effort to reduce the costs of distributing bills, 40 percent of utilities are planning to offer or are considering delivering bills through secure email, Chartwell says.
Tuesday, February 3, 2009
USPS Talking Points
By Mark Brousseau
The remittance space is buzzing about the Postmaster General's recent request to Congress to lift the requirement that the postal service deliver mail six days a week. There is concern from many corners about the potential impact this move would have on the industry.
To help head-off potential public relations issues, USPS prepared the Talking Points below for its staff to use when discussing the Postmaster General's plan. These were passed along by an industry observer.
RECOMMENDED TALKING AND MESSAGE POINTS
PMG TESTIMONY
UPDATED
29 JAN. 09; 2 P.M.
Confirm Testimony
Postmaster General Jack Potter testified Wednesday before a Senate subcommittee on the financial health of the Postal Service. His remarks were candid and he presented options for working our way through the current economic downturn. Potter stressed that the priority would be relief from the prepayment of retiree health benefits.
... Potter’s testimony has been posted on usps.com
Customers First
The Postal Service remains committed to providing the American people with quality, affordable service -- despite the current economic situation. Any decision made to help alleviate our financial situation starts with how it might affect our customers, the American people. We will continue to look at ways to cut costs and improve efficiencies within our system in order to guarantee to deliver the reliable, trusted service our customers have come to expect. In the past year the Postal Service has taken very aggressive cost-cutting actions, including the following:
... Halted construction of new postal facilities;
... Worked with National Association of Letter Carriers to permit a new interim agreement to enable quickly evaluating and adjusting letter carrier routes to reflect diminished volume;
... Frozen the salaries of all Postal Service officers and executives;
... Reducing authorized staffing levels at Postal headquarters by 15 percent;
... Reducing authorized staffing levels in the regional offices by 19 percent;
... Slashed travel and meeting budgets to take advantage of video conferencing technology; and,
... Consolidated some duplicative mail processing operations.
Health Care Relief a Priority
The Postal Service's first option is to restructure the prepayment of future retiree health care costs. We are the only government agency that is required to fully fund all projected retiree health care costs. Nonetheless, the Postal Service remains committed to meeting this obligation but a modified schedule of payments would allow the Postal Service to focus on current financial needs during this crisis. This change would neither increase the health benefit premiums paid by current or future Postal Service retirees, nor would it affect their benefits. Neither proposal would involve tax subsidies.
... Potter asked that the payment schedule for funding be adjusted.
... Modifying the schedule of payments would allow the Postal Service to focus on current financial needs during the economic crisis.
... This change would not increase the health benefit premiums paid by current or future Postal Service retirees.
... This proposal would not involve tax subsidies.
5 Day Delivery
Americans have come to trust and count on delivery six days a week. If the Postal Service is not allowed to postpone retiree health care benefits for at least the next two years, we would look at a temporary solution of limiting delivery to five days a week. This would come only during those periods of the year when mail volume is at its lowest and would be infrequent at best.
... This is a consideration only. No final decision has been made.
... We have no immediate plans to halt our current operating, processing or delivery procedures and systems.
... Our priority remains on working with Congress to change our contribution schedule for the retiree health benefit fund.
... No decisions have been made as to what day we may consider as the “non-delivery” day.
... Business will proceed as it always does. Service, delivery and, especially, work at BSNs continue as it is today.
... It is business as usual for the Postal Service.
What do you think of this? Post your comment below.
The remittance space is buzzing about the Postmaster General's recent request to Congress to lift the requirement that the postal service deliver mail six days a week. There is concern from many corners about the potential impact this move would have on the industry.
To help head-off potential public relations issues, USPS prepared the Talking Points below for its staff to use when discussing the Postmaster General's plan. These were passed along by an industry observer.
RECOMMENDED TALKING AND MESSAGE POINTS
PMG TESTIMONY
UPDATED
29 JAN. 09; 2 P.M.
Confirm Testimony
Postmaster General Jack Potter testified Wednesday before a Senate subcommittee on the financial health of the Postal Service. His remarks were candid and he presented options for working our way through the current economic downturn. Potter stressed that the priority would be relief from the prepayment of retiree health benefits.
... Potter’s testimony has been posted on usps.com
Customers First
The Postal Service remains committed to providing the American people with quality, affordable service -- despite the current economic situation. Any decision made to help alleviate our financial situation starts with how it might affect our customers, the American people. We will continue to look at ways to cut costs and improve efficiencies within our system in order to guarantee to deliver the reliable, trusted service our customers have come to expect. In the past year the Postal Service has taken very aggressive cost-cutting actions, including the following:
... Halted construction of new postal facilities;
... Worked with National Association of Letter Carriers to permit a new interim agreement to enable quickly evaluating and adjusting letter carrier routes to reflect diminished volume;
... Frozen the salaries of all Postal Service officers and executives;
... Reducing authorized staffing levels at Postal headquarters by 15 percent;
... Reducing authorized staffing levels in the regional offices by 19 percent;
... Slashed travel and meeting budgets to take advantage of video conferencing technology; and,
... Consolidated some duplicative mail processing operations.
Health Care Relief a Priority
The Postal Service's first option is to restructure the prepayment of future retiree health care costs. We are the only government agency that is required to fully fund all projected retiree health care costs. Nonetheless, the Postal Service remains committed to meeting this obligation but a modified schedule of payments would allow the Postal Service to focus on current financial needs during this crisis. This change would neither increase the health benefit premiums paid by current or future Postal Service retirees, nor would it affect their benefits. Neither proposal would involve tax subsidies.
... Potter asked that the payment schedule for funding be adjusted.
... Modifying the schedule of payments would allow the Postal Service to focus on current financial needs during the economic crisis.
... This change would not increase the health benefit premiums paid by current or future Postal Service retirees.
... This proposal would not involve tax subsidies.
5 Day Delivery
Americans have come to trust and count on delivery six days a week. If the Postal Service is not allowed to postpone retiree health care benefits for at least the next two years, we would look at a temporary solution of limiting delivery to five days a week. This would come only during those periods of the year when mail volume is at its lowest and would be infrequent at best.
... This is a consideration only. No final decision has been made.
... We have no immediate plans to halt our current operating, processing or delivery procedures and systems.
... Our priority remains on working with Congress to change our contribution schedule for the retiree health benefit fund.
... No decisions have been made as to what day we may consider as the “non-delivery” day.
... Business will proceed as it always does. Service, delivery and, especially, work at BSNs continue as it is today.
... It is business as usual for the Postal Service.
What do you think of this? Post your comment below.
Thursday, January 29, 2009
Mail Days May Be Cut
Posted by Mark Brousseau
Below is an article from the Associated Press on the Postmaster General's request to Congress to lift the requirement that the agency deliver mail six days a week.
Postmaster General: Mail days may need to be cut
By RANDOLPH E. SCHMID
The Associated Press
Thursday, January 29, 2009; 2:41 AM
WASHINGTON -- Massive deficits could force the post office to cut out one day of mail delivery, the postmaster general told Congress on Wednesday, in asking lawmakers to lift the requirement that the agency deliver mail six days a week. If the change happens, that doesn't necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.
Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year. "If current trends continue, we could experience a net loss of $6 billion or more this fiscal year," Postmaster General John E. Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.
Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.
And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.
"It is possible that the cost of six-day delivery may simply prove to be unaffordable," Potter said. "I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week."
"The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge," Potter said.
That doesn't mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.
If it did become necessary to go to five-day delivery, Potter said, "we would do this by suspending delivery on the lightest volume days."
The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, "the flexibility to meet future needs for delivery frequency.
A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.
The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year's consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.
The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.
Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.
The post office's problem is twofold, Potter explained.
"A revolution in the way people communicate has structurally changed the way America uses the mail," with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.
To some extent that was made up for my growth in standard mail _ largely advertising _ but the economic meltdown has resulted in a drop there also.
Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.
"We are in uncharted waters," Potter said. "But we do know that mail volume and revenue _ and with them the health of the mail system _ are dependent on the length and depth of the current economic recession."
He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.
At the same hearing the General Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.
Potter noted that the agency has cut costs by $1 billion per year since 2002, reduced its work force by 120,000, halted construction of new facilities except in emergencies, frozen executive salaries and is in the process of reducing its headquarters work force by 15 percent.
Below is an article from the Associated Press on the Postmaster General's request to Congress to lift the requirement that the agency deliver mail six days a week.
Postmaster General: Mail days may need to be cut
By RANDOLPH E. SCHMID
The Associated Press
Thursday, January 29, 2009; 2:41 AM
WASHINGTON -- Massive deficits could force the post office to cut out one day of mail delivery, the postmaster general told Congress on Wednesday, in asking lawmakers to lift the requirement that the agency deliver mail six days a week. If the change happens, that doesn't necessarily mean an end to Saturday mail delivery. Previous post office studies have looked at the possibility of skipping some other day when mail flow is light, such as Tuesday.
Faced with dwindling mail volume and rising costs, the post office was $2.8 billion in the red last year. "If current trends continue, we could experience a net loss of $6 billion or more this fiscal year," Postmaster General John E. Potter said in testimony for a Senate Homeland Security and Governmental Affairs subcommittee.
Total mail volume was 202 billion items last year, over 9 billion less than the year before, the largest single volume drop in history.
And, despite annual rate increases, Potter said 2009 could be the first year since 1946 that the actual amount of money collected by the post office declines.
"It is possible that the cost of six-day delivery may simply prove to be unaffordable," Potter said. "I reluctantly request that Congress remove the annual appropriation bill rider, first added in 1983, that requires the Postal Service to deliver mail six days each week."
"The ability to suspend delivery on the lightest delivery days, for example, could save dollars in both our delivery and our processing and distribution networks. I do not make this request lightly, but I am forced to consider every option given the severity of our challenge," Potter said.
That doesn't mean it would happen right away, he noted, adding that the agency is working to cut costs and any final decision on changing delivery would have to be made by the postal governing board.
If it did become necessary to go to five-day delivery, Potter said, "we would do this by suspending delivery on the lightest volume days."
The Postal Service raised the issue of cutting back on days of service last fall in a study it issued. At that time the agency said the six-day rule should be eliminated, giving the post office, "the flexibility to meet future needs for delivery frequency.
A study done by George Mason University last year for the independent Postal Regulatory Commission estimated that going from six-day to five-day delivery would save the post office more than $1.9 billion annually, while a Postal Service study estimated the saving at $3.5 billion.
The next postal rate increase is scheduled for May, with the amount to be announced next month. Under current rules that would be limited to the amount of the increase in last year's consumer price index, 3.8 percent. That would round to a 2-cent increase in the current 42-cent first class rate.
The agency could request a larger increase because of the special circumstances, but Potter believes that would be counterproductive by causing mail volume to fall even more.
Dan G. Blair, chairman of the Postal Regulatory Commission, noted in his testimony that cutting service could also carry the risk of loss of mail volume. He suggested Congress review both delivery and restrictions it imposed on the closing of small and rural post offices.
The post office's problem is twofold, Potter explained.
"A revolution in the way people communicate has structurally changed the way America uses the mail," with a shift from first-class letters to the Internet for personal communications, billings, payments, statements and business correspondence.
To some extent that was made up for my growth in standard mail _ largely advertising _ but the economic meltdown has resulted in a drop there also.
Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.
"We are in uncharted waters," Potter said. "But we do know that mail volume and revenue _ and with them the health of the mail system _ are dependent on the length and depth of the current economic recession."
He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.
At the same hearing the General Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.
Potter noted that the agency has cut costs by $1 billion per year since 2002, reduced its work force by 120,000, halted construction of new facilities except in emergencies, frozen executive salaries and is in the process of reducing its headquarters work force by 15 percent.
From the Postmaster General's Mouth
Posted by Mark Brousseau
Below is a link to Postmaster General John E. Potter's testimony before Congress Wednesday where he asked lawmakers to lift the requirement that the agency deliver mail six days a week. This proposal could have a significant impact on remittance and lockbox processors, industry observers point out.
http://www.usps.com/communications/newsroom/testimony/2009/pr09_pmg0128.htm
What do you think? Post your comments below.
Below is a link to Postmaster General John E. Potter's testimony before Congress Wednesday where he asked lawmakers to lift the requirement that the agency deliver mail six days a week. This proposal could have a significant impact on remittance and lockbox processors, industry observers point out.
http://www.usps.com/communications/newsroom/testimony/2009/pr09_pmg0128.htm
What do you think? Post your comments below.
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