Welcome to the Talon Mailing & Marketing January 2011 Newsletter.
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A Bailout for the U.S. Postal Service?
by Angela Greiling Keane, Bloomberg Businessweek
As new Postmaster General Patrick Donahoe
takes charge, the post office is in crisis mode.
Imagine a company that reported losses in 14 of the past
16 quarters, has too many retail outlets by its own admission, and relies
heavily on revenue from its two biggest competitors for revenue. Any
management consultant would recommend the obvious: Close unnecessary
offices, lay off workers, expand into new lines of business, and raise
But this is the U.S. Postal Service. It's expected to show a profit
without a government subsidy, yet Congress, powerful labor unions, and
even its own regulators are preventing it from making hard-nosed business
decisions. The result could be a painful restructuring or a government
bailout before the fiscal year ends next September 30th.
Patrick R. Donahoe is charged with fixing the mess. A 35-year postal
veteran, he became Postmaster General on December 4th. Donahoe told bulk mail
customers on Nov. 18 that the service's costs will exceed revenue by $2.7
billion, even after borrowing $3 billion from the U.S. Treasury, the
annual legal limit. Total debt, now $12 billion, by law can't exceed $15
billion. Revenues in fiscal 2010 were $67 billion.
The USPS now faces the prospect of tougher scrutiny when Republicans take
control of the House in January. Representative Jason Chaffetz (R-Utah),
in line to chair the House subcommittee that oversees the service, could
try to impose a restructuring by shutting some of the nation's 32,000 post offices.
"We have too many post offices," he says. He suggests bypassing
congressional opposition by using a federal commission, similar to the
kind used to close military bases, to identify which post offices to shut.
The USPS's problems are well known: More customers are paying bills online
and choosing FedEx (FDX) and United Parcel Service (UPS) to send overnight
packages. Labor and retiree health-care costs are exploding: The service
has a $50 billion obligation to its retiree health fund and is in a
dispute with Congress about who should pay that balance. When the USPS
reported a record annual loss of $8.5 billion last month, Representative
Darrell Issa (R-Calif.), who will chair the House Oversight and Government
Reform Committee, warned that the Postal Service must trim costs to match
revenues so "taxpayers don't get stuck paying for a bailout."
The USPS in March released a McKinsey & Co. study that recommended
slashing delivery to as few as three days a week, expanding into other
business lines, and shutting post offices. Congressional Democrats and
labor unions have blocked an end to Saturday delivery to prevent
constituent uprisings and job losses. Despite Chaffetz's warning, even
some Republican lawmakers are loath to shut facilities that are named for
local VIPs—and often are the social fulcrum of small towns. The Postal
Regulatory Commission, the service's overseer, on September 30th denied a
request to raise rates an average of 5.6 percent because that would exceed
the inflation rate. The USPS is appealing. "The key issue for us," Donahoe
says, "is either reducing cost per delivery or increasing revenue per
delivery." The service makes $1.40 per delivery now, down from $1.80 in
2000. The last time mail volume increased was in the first quarter of
The service spends 78 percent of its budget on salaries and benefits,
higher than either FedEx's 43 percent or UPS's 61 percent. The American
Postal Workers Union, the larger of the postal unions, is resisting
further cutbacks and instead wants to "restore work that has been
outsourced or given to supervisory personnel," union President Cliff
Guffey said in a December 1st statement. The best hope may be that volume climbs
for the USPS's two biggest customers, FedEx and UPS, which use the service
for last-mile delivery, since mail carriers go to all 151 million U.S.
addresses six days a week—at least for now.
The bottom line: The U.S. Postal
Service, blocked by Congress, unions, and regulators from making tough
business decisions, may need a bailout next year.
Direct Mail Marketing Tips for Success
by Anthony Harris
Direct mail marketing is a costly strategy to
implement, and that's why it's very important to get it right the first
Because people tend to have very good memories with regard
to unsolicited mail, executing your campaign without flaw becomes all the
Limit your proposal to a maximum of three pages.
Anything longer than three pages could discourage your recipients from even taking a
glance at it. Keeping it brief is always good but never to the point that
you've failed to deliver salient points of your proposal. Of course,
costs are also another consideration. The fewer pages you use, the lower
your expenses are on printing and postage.
Work on making your letter visually attractive.
Let's start with the first thing your recipients will see: the envelope. It doesn't
have to be made of linen, but make sure at least that the envelope
texture is nice to touch. White envelopes always look professional, but
they're more vulnerable to dirt as well. If you can find an alternative
color that would still appear professional and match your company's color
scheme, so much the better.
Offer a free gift.
The smaller and lighter the free gift is, the better because you get to
save on postage. Offering freebies is crucial: it's yet another incentive
for people to learn what you have to say. If possible, make sure that the
words FREE GIFTS are printed on the envelope. Naturally, it won't hurt
your cause if your free gift just happens to be related or even
complementary to the products you're marketing.
Make an offer they can't refuse.
Direct mail marketing won't be successful simply because you're giving
away free gifts and you've written an excellent marketing
piece. More often than not, recipients could simply enjoy your gift
and throw away your letter. To avoid that, you need to give them yet
another incentive - one that will require them to meet you in person.
Your second offer doesn't need to cost you a thing. You may tell your
recipients, for instance, that they have the option of joining your
business seminar for free. You can tell them that it's a chance for them
to learn how to become a millionaire.
Place a deadline on your offer.
A deadline creates a sense of urgency. It helps convince people to make a
move rather than allow them to continue floundering in their indecision.
And if you're worried that deadlines could instead force you to turn your
back on your customers, don't be. Remember: you can extend those
deadlines anytime and simply tell them that it's due to popular demand.
Make sure it's free from technical errors.
Technical errors have nothing to do with what you're selling and
everything to do with the rest. Consider grammar, punctuation, font
effects, and spacing. If you don't want to entrust your mail to the post
office, you should look for a freight company that offers affordable but
Have it reviewed.
Don't send your promotion out just yet. You still have two more steps to take care
of. First, find an objective and knowledgeable third party to review
your offer. Make sure you let him or her see even the type of envelope you're
using. Make the necessary changes.
Verify addresses of recipients.
To avoid waste of time and effort, try verifying the addresses of your
recipients. Talon can help you with this step. If everything's in order, then good luck! You're all ready now
to launch your direct mail marketing campaign!
Shoppers Strike Fear into Retailers
by Miguel Bustillo and
Ann Zimmerman, The Wall Street Journal
Price comparison apps are changing
the way consumers make purchase decisions.
Tri Tang, a 25-year-old marketer, walked into a Best Buy Co. store in
Sunnyvale, California, this past weekend and spotted the perfect gift for his
Last year, he might have just dropped the $184.85 Garmin global
positioning system into his cart. This time, he took out his Android phone
and typed the model number into an app that instantly compared the Best
Buy price to those of other retailers. He found that he could get the same
item on Amazon.com Inc.'s website for only $106.75, no shipping, no tax.
Mr. Tang bought the Garmin from Amazon right on the spot.
Until recently, retailers could reasonably assume that if they just lured
shoppers to stores with enticing specials, the customers could be coaxed
into buying more profitable stuff, too. Now, marketers must contend with
shoppers who can use their smartphones inside stores to check whether the
specials are really so special, and if the rest of the merchandise is
"The retailer's advantage has been eroded," says Greg Girard of
consultancy IDC Retail Insights, which recently found that roughly 45% of
customers with smartphones had used them to perform due diligence on a
store's prices. "The four walls of the store have become porous." Some of
the most vulnerable merchants - sellers of branded, big-ticket items like
electronics and appliances - often prompt buyers to comparison shop.
Best Buy, the nation's largest electronics chain, said recently that it
may lose market share, a downward trend that some analysts are attributing
in part to pressure from price comparison apps.
Talon has great seats for you to win.
are giving away a pair of tickets to see the New York Islanders! To
win, be the first telephone caller (please don’t hit reply or
email). Voicemail messages count so it's fine to leave a message.
Call Michael Borkan at 631-667-5500 x 11.
Tuesday, January 11th, 7:00 PM.
Islanders vs. Vancouver Canucks
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A Bailout for the U.S. Postal Service?
8 Direct Mail Marketing Tips for Success
Phone-Wielding Shoppers Strike Fear into Retailers
Islanders Ticket Giveaway!
Mike Borkan's Links - Web sites you probably
View Samples of Our Work
Direct Mail Humor!
Talon welcomes the following new clients this month to our growing
roster of customers:
Mike's Favorite Links:
Some interesting links...
reversephonelookup.com - Free Phone Reverse Lookup.
yelp.com - The fun and easy way to find
and talk about great (and not so great) local businesses.
traffic.com - Free real-time traffic
information for your driving trips and commutes.
Google Translate -Translate
any text to and from over 50 different languages.
Patch.com - Localized source for news, events,
business listings, and discussion.
interviews, book and CD reviews, contests, bios, travel stories, and
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