COVID-19's Effect on the USPS and Direct Mail Marketing

What strange times we are living in right now as individuals and businesses. In 29 years of working with direct mail, I have never seen anything like this. We've heard a lot on the news about essential businesses during COVID-19, but one we all count on that is not mentioned much is the USPS. The Postal Service, like many of us, have been greatly impacted by this crisis, and so has direct mail marketing in general.

First there has been a dramatic drop in marketing mail with numerous events canceled and businesses shuttered, causing a need to send fewer mail pieces. Second, the USPS must maintain facilities and personnel based on CDC guidelines, which can be very difficult in a processing facility. For more details on that, you can read the statement that was issued to address this. And third, the USPS was already having financial troubles before the crisis without congressional action.

To address the drop in marketing mail, Mailers Hub along with several other industry associations have sent a letter to Postmaster General Megan Brennan and Robert Taub, chairman of the Postal Regulatory Commission (PRC) to express concern about marketing mail volumes.

They offered suggestions like a per-piece discount, deferring collections, extending or adding promotions and incentives, and deferring planned price changes for international mail.

As the letter stated, “Now is the time for action from the Postal Service and the PRC to keep businesses using the mail.” While the USPS may understand this, the challenge will be to find a "stimulus" for mailers that is within the limitations of the CPI cap and the rate setting process that the PRC is charged with enforcing. What the USPS may want to do to help mailers and what the law allows them to do may be very different.

So, one would think that when Congress is working on legislation to help businesses and individuals through this crisis that there would be some help for the post office as well. Check out what Leo Raymond, Managing Director of Mailers Hub wrote in the last newsletter issue:

“By voice votes in the Senate on March 26 and the House on March 27, Congress last week passed HR 748, the Middle-Class Health Benefits Tax Repeal Act of 2019, a $2.2 trillion program to help the nation’s economy and citizens deal with, and recover from the consequences of the ongoing virus-related crisis. Conspicuously missing was any aid for the Postal Service.

Instead, the bill only allowed it to borrow another $10 billion from the Treasury, going even deeper in debt. The final version of the bill was a dark disappointment for many in the mailing industry as well as the postal unions and their allies, who’d hoped Congress would use the occasion to lift some of the Postal Service’s burden of debt – not make it worse.”

From Target Marketing's sister brand, Printing Impressions, Lisbeth A. Lyons VP, Government and External Affairs of the Printing Industries of America (PIA) shared additional thoughts about the $10 billion line of credit, and what PIA is looking to do in regard to the situation:

"This is a short-term victory as it throws a lifeline to USPS, which is reporting an 18-percent drop in entered mail this week as compared to the same week last year. However, simply extending more credit is not the best solution to what could be an impact to USPS greater than that of lost volume and revenue post-9/11 or post-2008 financial crisis. PIA is redoubling efforts to achieve more structural changes and financial stabilization such as full repeal of the onerous pre-funding of retiree health benefits requirement in the next phase of Congressional response to COVID-19."

This crisis is going to go on for a while and those of us that send direct mail could use some relief in order to get marketing mail numbers back up. We have seen movement in the B2C mail stream as many people are now stuck at home; well-designed and executed direct mail is something they look forward to getting.

Sending Direct Mail During COVID-19

If you are a B2C marketer, you should take advantage of this situation and provide good quality direct mail offers that your customers can use. On the other hand, the B2B market is a whole other story. With many companies closed and employees working from home, your direct mail may not get to the right person. For now, you should plan to hold your mail pieces until your customers return to the office, and consider other channels that may be more appropriate for reaching your B2B customers.

As we continue to navigate the coronavirus pandemic and get closer to reopening the country fully, you can expect marketers to be planning and executing as many relevant marketing campaigns as possible to help get our economy moving again. What has been happening in your area? Do you have any bright spots to share? Let us know in the comments!