USPS “No 2010 Rate Increase”: The Loophole and a Call to Action


Just when I thought it was safe to believe in the U.S. Postal Service, I find out this lovely tidbit of information: Despite Postmaster General John Potter’s grand statement (or was it a grandstanding statement) that there’d be no postal rate increase in 2010, there’s a giant loophole.

No matter what Potter said in his memo, the USPS can still increase postal rates. Just to be sure, I asked Don Landis, vice president of postal affairs at Arandell Corp., a noted catalog printer/mailer. According to Landis, “It’s possible some mailers could see an increase in their postage come May 2010. The USPS could make regulation changes that would force mail into a more expensive category. We’ll know in January or February.”

How You Can Make a Difference
While I applauded Potter and the USPS for taking a stand for the direct marketing industry in this column two weeks ago, I hope I didn’t speak too soon. I still remain cautiously optimistic, but I also must do my part to help sway the decision. We must hold the postmaster general and the Postal Regulatory Commission to his/its commitment.

Thus, I urge you to write a letter to the postmaster general using the contact information provided below. Here’s the letter I wrote. Feel free to copy, paste and use it, or create your own. The key is to make your voice heard!

Dear Mr. Postmaster General,

You’ve started a trend here. Between the postal summer sale and now this offer to keep postal rates stable in 2010, catalog and direct mailers believe that you may actually be interested in working to our benefit. We look forward to the next postal sale, and hope that the USPS opens it up to smaller mailers to take advantage of. We truly hope that you’ll continue to stop thinking like a bureaucracy and encourage more mail volume with innovative special offers and such.

But direct marketers are also wary because the USPS holds a great deal of power and leverage over us. The last substantial postal rate increase nearly put us under with rate increases of 20 percent-plus. What was the USPS thinking? That move single-handedly drove more and more mailers into the online world. Doing the math, we believe the increase actually caused your revenues to go down due to less mail in the mailstream.

Remember this, Mr. Postmaster General: Every penny more it costs us to mail means we need to generate about 2 cents more per catalog mailed just to break even. In this economy, we need every opportunity we can get to mail our catalogs profitably. We’re struggling to stay alive and keep our workers employed and our customers satisfied.

Keep up the good work, Mr. Postmaster. Please continue this trend.

Sincerely,

The Direct Mail Industry

Reach the postmaster general at the following:

The Honorable John E. Potter
Postmaster General
U.S. Postal Service
475 L’Enfant Plaza, SW
Washington, D.C. 20260-0010
Email: pmgceo@usps.gov

Originally published in All About ROI Magazine

4 Tips Any CEO or C-Level Exec Can Take to the Bank


(originally published by Catalog Success Magazine)

Being a C-level executive these days has to be the ultimate challenge. These execs face a ton of pressure to keep their companies above water during these turbulent times. Truly, I feel for them.  

But, in many cases, my empathy for them goes only so far. Especially when C-levels exemplify what I call “ivory tower thinking.” This kind of isolation is what President Obama tried to compensate for by keeping his BlackBerry — the ability to stay in touch with people other than his high-level handlers and advisers.  

In other words, there are many people within organizations beyond the CEOs’ top advisers that can offer advice and wisdom. Getting out of the tower is critical to the success or failure of any business right now.

With this in mind, I’d like to offer four pointers for any and every CEO and C-level exec:

  1. Want to know what’s going on in your organization? If you don’t already, run, don’t walk, to your call center and spend time listening to order calls, customer service calls and other inquiries. (I’ll devote a series to this in the near future.) I guarantee you’ll be enlightened and find ways to improve your product(s) and service.
  2. Talk to your call-center staff — especially the front-line reps. These people are the true unsung heroes in your companies, and they intimately know what’s right and wrong with your products and service.
  3. Once your eyes have been opened by listening to your customers and reps, force everybody in the company to spend a day in the call center, too. Write it into law that every manager and above must spend one day in the call center every six months — or quarterly, and force your marketing staff to listen monthly. Make it mandatory for new hires.
  4. Embrace social media. Through my own research, I’ve found that most marketers who’ve traditionally sold via catalog are behind their online-only counterparts on social media adoption. Why? Fear. If you think your call center is a great learning experience, try developing social media tools to monitor your reputation by listening to the social media chatter about your company. What you learn may be the ruthless truth about your company, products and service, and how they’re actually viewed by people who speak the truth.

Beware though, you may have to take specific actions based on what you learn. But then again, that’s the point of getting “out there.” Back in the ’80s I was a huge Tom Peters fan; he called this process, “management by wandering around.”

Four Questions to Continually Ask About Your Customers, Products and Brand


You don’t have to operate any stores to always “mind the store.” For us in the catalog/direct/multichannel world, that means finding time in our 24/7, 365-days-a-year world to step back and ask ourselves a few questions. It’s not an easy task to pull back from our everyday happenings, especially in this insane and fear driven economy, but it’s still mission critical to stop and ask:

1. Are we the company our customers want us to be? 

2. Are we the company our competition envies? 

3. Are we looking around every corner to see what’s coming next? 

4. And for that matter, how can we adapt to meet the needs of the next “trend” so we can effectively contribute to our customers’ wants and needs and therefore our own EBITDA?

Kumbaya Now! (how we can all professionally and personally survive the economic crisis)


Whether we like it or not, we’re all in this recessionary economy together. 

If you’re still lucky enough to be employed, listen carefully to my message, as simplistic as it may seem: It’s time to put aside the natural rivalry, competitiveness, intraorganizational politics and just plain silliness that is everyday business life if you want to stay employed, and moreover, to keep your business from going under.

It’s time to really look at the way the silos within your company are formed. Take them apart, and relearn how to run your business.  

Yes, I know I’m preaching. Sorry. But you can always stop reading here (but don’t).

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I assure you that on this day, in this economy, businesses need to adapt or die! We’re all terribly scared about the future of our careers and how it will affect our families. The more we — and when I say we, I mean employees and business owners — succumb to our fears, the more difficult it is to work together. We second-guess ourselves. We second-guess others, and most importantly, we spend a lot of time playing armchair quarterback to the decisions that are being made.

It’s no wonder companies are going under daily. If you look carefully, you’ll see mismanagement as the big culprit. Greed. Power. Ego. We can’t run businesses this way at this time in history.

It’s officially time for kumbaya! From this point forward, you and your colleagues must work together to fight to keep your company alive.

Beyond newfound camaraderie, two keys to doing this are obviously increasing sales and reducing costs. If you look, I’m sure you can find many places where your company’s inefficient.

As an employee, you already know they’re there, but fear keeps you silent, doesn’t it?

Recently, while consulting for a company, I set up an internal group, more like a renegade operation, and named it “Operation: Unturned Stone.” The goal of this operation was to turn over every stone in the organization in search of opportunities to either reduce costs or increase sales. This required getting people together from each department in the company. And not the heads of that division either, but key managers who aren’t usually empowered to make a difference like this. 

We put them together in a room, told them NO topic was off-limits, even pet projects their CEO might be working on, and told them to build a report on what can be done better.  

The last part of Operation Unturned Stone is critical: C-level management must make the commitment to listen and take action. Also critical is that each member of the presenting group can feel 100 percent comfortable that there will be no consequences for what they recommend. Additionally, upper management at all companies need to address the paranoia level. Peoples’ nerves are frayed as they wait for more bad news or the axe to fall.

The time is now for reassurance, comfort and team building. This can be accomplished relatively quickly. Along with reassurance, get your employees together. Suggest outside-of-the-office events. Create events as well. No, I’m not talking about corporate retreats. How about an ice skating night? A company picnic for no reason? Give out free movie passes; something along those lines.  

In short, it’s your responsibility to do what it takes from any level to ensure that your staff sticks together in these troubling times. Now is not the time for every man/woman for him/herself!

We will get through this difficult time and thrive again.

Happy Holidays… You’re fired!


Last year for Catalog Success Magazine, I wrote a scathing attack on downsizing after reading about Lillian Vernon letting go of 100 employees a mere five days before Christmas.   And without any warning!  And not just seasonal employees either!

Could there be a more despicable act?

Now with our economy on the brink, massive layoffs are being, uh, for lack of a better term, executed. Unemployment is at 6.5%, and experts and pundits alike are predicting that 1st quarter of 2009, will be even worse.

Therefore, I republish the article here because it’s point is even more valid today than last year. In fact, I know plenty of people who have just lost their jobs, and I find this to be a fitting tribute to those who fell (or more appropriately were pushed) onto their swords at the worst possible time of year.

Here goes…

Now, I’m not against making a profit, but as a direct marketer and direct marketing consultant, I always seek ways to reduce costs rather than cutting staff — a last resort to me — to meet profit goals.  Was it really going to kill a multimillion-dollar enterprise’s profits to keep 100 employees, who probably busted their collective butts to help Vernon make its holiday sales numbers, just a few more weeks?

Somebody is waaay out of line here!  I know today we live in a pressure-cooker environment, doing business at light speed. Holiday season in retail and mail order, from September on, is intense.  But come on, give people a break here.  Did Vernon’s management really need to do this?

Many people already find the holiday season stressful, while traditionally it’s supposed to be the “most wonderful time of the year;” a paradox of the times we live in.  The last thing someone needs is the ax to fall on them during that time.

My solution to holiday downsizings…

There should be some sort of moratorium on firings the last two months of the year.  Let’s extend that out into the third week of January just to be safe.  Add that to our list of best practices.

Rant over!  Anybody think I could possibly be off base?  Let me know.

Speak to you next week. Got comments? Post them below!  In the mean time, here is another article I wrote on downsizing as the road more easily traveled,

Here is another called downsizing is for sissies

Jim Gilbert is president of Gilbert Direct Marketing Inc., a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can e-mail him at jimdirect@aol.com.

Cost Reduction: Is Downsizing a Last Resort, or Merely the Road More Easily Traveled?


There have been some high profile layoffs in our industry over the last few weeks. And with our economy in the tank, companies experiencing slumping sales and the outlook for the rest of Q4 painted as “bleak,” it’s safe to expect more downsizing to follow.

Two weeks ago, I wrote about how to bulletproof your career in this economy by cutting costs. And don’t fear, I have many more cost-cutting/revenue-creating tips for you this week. (Forthcoming, stay tuned.)

(For my most recent column, and those cost-cutting tips, click here.)

But first I’d like to address all the C-level folks who read my column (and the rest of you, too, of course). Let me begin by making the assertion that your business is not very efficient. No matter how well you run your business, you’re still bleeding cash out the door in many places.

Here, let me help you out:

1. Your call center doesn’t convert enough prospects to customers.

2. Neither does your Web site. Most likely your Web site converts customers in the single digits.

3. Right now, someone is speaking to one of your call-center reps or is on your Web site, and is getting annoyed and/or frustrated.

4. Did you hear that? That’s the sound of clicking away and the phone hanging up.

These are just four areas I see daily that always need work. They’re usually the lowest-hanging fruit.

In short, no matter how you slice it, both your sales acumen and customer service need major work. And by only fixing those parts of your business, you’ll recoup enough revenue to probably help you through the storm.

Ask yourself the following: How much more revenue will you create by converting 1 percent more sales in your call center or Web site? How much more gross profit will you get by reducing returns by a percent? There’s plenty of stuff here to fix.

That’s why I don’t believe in downsizing, rightsizing, layoffs, cutting head count or whatever euphemism you call it in your company. To me, that’s taking the easy way out — the path of least resistance. And I see it as a sign of weakness, unless all other options for cost cutting and revenue increasing have been completely and thoroughly exhausted.

If not, you’re going to mess up the lives of some people who deeply care about their jobs and your company. And desperately need their jobs, too.

The job outlook is bleak. Many of your employees who are let go will absolutely have a hard time in this economy. Your actions could have devastating consequences on these people. Some could lose their homes, and money troubles at home are one of the leading causes of divorce.

At some point, you really need to look deeply at your company and take the hit. It’s not the market, the economy, your products and/or your employees who got you into this mess. As the leader of the ship, it’syour responsibility.

There’s Hope … Just Follow My Lead
All you have to do is look and I guarantee you’ll find ways to cut costs in your company — and do so without negatively affecting quality. In fact, if you look in the right places, you’ll likely increase quality.

I implore you to look at processes, not people. I beg you to take the high ground here, the road less traveled. Forget about head count; get past the political BS your executives tell you. Remember, they’re scared of losing their jobs, too. Get out and speak with lower-level employees. If you find one who isn’t too scared to tell you what you really need to know (translation: the unfiltered truth), then listen.

And finally, this is my challenge to you: If you cannot find where to cut costs, contact me and I’ll help you. I’ll choose two companies to do this for, pro bono (but only if you let me use the results of my help in a future column here).

Jim Gilbert is president of Gilbert Direct Marketing, a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert or you can post a comment here or e-mail him at jimdirect@aol.com.

Downsizing is for sissies: Putting my money where my mouth is!


For those readers who believe that I am off base in my assertion that downsizing is for weak management, let me say this. 

9 out of 10 companies that layoff employees, do so for the absolute wrong reasons.  From what I have seen, most companies downsize before all other expense reductions measures have been exhausted. 

Two weeks ago, I discussed the two largest areas of revenue bleeding for most companies; their call center and their website.

To read that article click here:

I’m willing to bet that if you just fix the gaping holes in those two areas, you can win back enough revenue to get you through tough times without affecting headcount.

Unfortunately that’s the road less traveled.  The easy way out is to cut staff. 

I’ve been faced with that issue before.  To me it’s a clear choice.  Layoffs are not an option.  As a manager they’re not even on the table.  So to put my money where my mouth is, here are two short stories of how I have handled such crises.

Crisis one, how it was resolved:

Years ago, I was hired to do a turnaround for a direct marketing company that wasn’t profitable.  In fact they were losing a ton of money and had been for quite a while.  So what did I do:

1.     I trained our customer reps constantly and consistently how to convert more inquiries to sales, cross sell more effectively, recommend exchanges rather than returns, and handle all complaints as an opportunity the build customer loyalty.  The training process was simple and the reps even had fun with it.  For more on how to do it see my article series: Click here

2.      I looked very carefully at metrics, most notably LTV (lifetime value), and ROI payback (this was a catalog company) over time.  I ruthlessly got rid of anything that didn’t work.  And believe me when I tell you this, there was a ton of media that was not performing even on the front end, much less on a LTV basis.  Our major point of entry for prospecting was lead generation.  I dumped a great deal of two step lead gen programs and added in much more list rental names.

3.     I had one of the major catalog coops build inquiry and retention models, cutting out waste by only mailing to names of old customers and prospects that were in a buying frame of mind. 

4.     I set up new small scale tests of other direct marketing media, print, package inserts, card decks, and tested new internet media (it was early in the game) adding in affiliate programs, search and email.  The point of this is simple.  Just because you have to cut, it doesn’t mean you can’t or shouldn’t test. 

5.     And I renegotiated everything.  I cut our marketing expenses just for catalog printing and mailing by 20%. 

I hope this helps.  At the very least let this show you that there are other area’s to cut costs rather than knee-jerk your way to laying off employees that work hard for you.

I was able to cut enough expenses so I didn’t have to let go of even one person. 

Bottom line.  Make the decision not to cut, draw a line in the sand and start reviewing everything.  Next week, I’ll tell you the second story about the start up that ran out of money (and provide you more tips within the story).

Jim Gilbert is the President of Gilbert Direct Marketing, Inc., a full service catalog and direct marketing agency.  His linkedin profile can be viewed at http://www.linkedin.com/in/jimwgilbert., or email him: jimdirect@aol.com.

 

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