Thinking Forward: The Potential Impact of USPS Uncertainty

Brands have been using direct mail to connect with customers for a very long time. As far back as 1872 Montgomery Ward’s first mail-order catalog was delivered, spawning a long-distance customer relationship with American consumers. Fast forward a century or so to when Registria founder, Chris McDonald, and I worked together at a former company where catalogs were an integral part of the customer acquisition strategy for brands.

In addition to courting new sales, brands have also used mail service to connect with existing customers. Mail-in product registration cards have been used since before the 1940s to collect customer information and establish a direct connection with product owners.

But the story is rapidly changing – and brands that rely on direct mail to connect with customers need to take heed.

WHAT IS THE FUTURE OF THE USPS?

As a self-funded organization, the United States Postal Service (USPS) only dates back to 1970. A majority of Americans think very highly of the USPS, and its services have been a lifeline for both large and small businesses. However, a combination of legislation, regulation, and ever-increasing consumer preference for digital channels have been steadily eroding the organization’s financial health, leading to tens of billions of losses over the past decade or so.

On top of all this, the coronavirus pandemic is pushing the USPS closer to the brink as direct mail revenue drops sharply (offset in part by increased revenue from packages). Earlier this year, the USPS admitted it might be insolvent by autumn without an infusion of funding (a portion of which it received from Congress).

Most recently, a number of operational changes have occurred in the USPS organization that appear to be contributing to delays in mail delivery. Between July 1 and Aug. 15, 31% of USPS mail was delivered late – an increase from a 23% average in 2019. An internal USPS investigation found that marketing mail performance has declined by 8.52 percent recently. (Source: NYT/SnailWorks)

It’s hard to imagine a world without mail delivery. If the USPS did cease to operate, the service would most likely be privatized and would become more expensive for consumers and businesses alike. For businesses that depend on affordable third-class postage rates for direct mail and return communication from customers, the change could mean significant disruption.

BENEFITS OF DIGITAL ONBOARDING OVER MAIL-IN

Just as a person shouldn’t put all their eggs in one basket, brands that rely heavily on direct mail should continue to evolve their digital engagement channels.

For instance, more and more consumer product brands (like our valued brand partners), are leveraging digital product registration to onboard customers quickly and conveniently. Digital registration provides a number of significant benefits over mail-in registration cards, including:

• Faster engagement after purchase – Nearly 50% of new product owners onboard with brands within a week of purchase*
• More first-time registrations - Over 50% of owners register for the first time when offered an option to engage with their mobile device*
• Fewer incomplete registrations – A 92% completion rate for onboarding using Photoregister℠
• More accurate declared owner data – Real-time verification and pre-filled product information greatly improves the data quality and accuracy for use in post-purchase communications
• Increased revenue -- From sales of extended warranties, service plans, parts and accessories, and related offerings which can be presented during a digital onboarding experience
• Significant cost savings – Less total expense from printing, postage, and processing fees associated with mail-in registration cards

Offering digital registration doesn’t mean unilaterally dissolving paper. Mail-in registration cards are still preferred by some owners, primarily in older demographics. Not surprisingly, younger consumers prefer digital registration methods. If your brand’s customer base spans generations, mail-in cards may still be necessary.

Brands can improve the effectiveness of mail-in registration by:

• Putting systems in place to verify and standardize data submitted via mail. Registria processes millions of paper registration cards each year and data quality is still paramount.
• Devise a strategy for using information collected from mail-in registrations. Provide value to new owners, especially in the first months of ownership, to spur an ongoing relationship.
• Monitor engagement channels and ROI for mail versus digital (web and mobile) to ensure you’re making a sound investment in paper engagement.
• Offer a digital engagement method for owners to connect. Connecting via mobile is the consumers’ preferred method and it’s also the most effective.
• Experiment with direct mail campaigns to your product owners at key moments during the ownership experience. Some successful mail-in campaigns that our clients have executed recently include out of warranty renewal, replace to upgrade, and proactive repair programs.

We’re all following the trajectory of the USPS, for both personal and business reasons. For brands that do rely on the postal service to connect with their customers, it’s important to understand and reduce the risk of relying on a channel over which they have little control and which seems to have an uncertain future.