NNA urges PRC to examine USPS' direct mail program

Jul 31, 2012

The National Newspaper Association today urged the Postal Regulatory Commission to deeply examine the implications and consequences of the U.S. Postal Service’s Every Door Direct Mail program, begun in 2011 to entice small businesses to use the mail. The Postal Service has requested authority to turn the experiment into a permanent program, pricing direct mail pieces at 16 cents (up from 14.5 cents now) and permitting up to 5,000 pieces per ZIP code to be mailed each day by a business.

The program began with the Postal Service’s determination to relax the addressing requirements for Standard mail entered on city carrier routes. In addition to permitting a simplified addressing regimen with no permit fee required that eliminated the need for costly mailing lists, USPS at the same time rolled out what it then called Mail Marketing Made Easy, later named Every Door Direct Mail. Since then, it has promoted the program widely, even using its TV advertising character to urge businesses to use EDDM. Though the stated goal was to get non-mailing businesses to try direct mail, NNA and others have argued that it is simply diverting mail from one USPS classification to another.

NNA asked the PRC to pose detailed questions about the program before considering a permanent EDDM product:

Whether EDDM is simply diverting mail from existing postal products, primarily from shared mail and newspaper mailing programs.
Whether costs incurred by the program are accurately charged to EDDM, including the time it takes postmasters and other executives to sell advertising, the TV promotion cost and the postage spent on USPS’ own direct mail promotions.
Whether the Postal Service has demonstrated that the EDDM has not created unfair competition, particularly against smaller business in the advertising and mail service provider sectors. Because EDDM does put the Postal Service into a direct advertising sales position with favorable conditions that it does not extend to other mailers, NNA believes it should have a heavy burden to prove the fairness of the program.
NNA President Reed Anfinson said EDDM was less likely to create new direct mail volumes than simply to divert existing newspaper and shared-mail advertisers into lower-priced options, while costing newspapers and other USPS customers their business. NNA is also awaiting the PRC’s decision on whether deeply discounted postage will be extended to newspaper insert customers and direct mailer Valassis Inc.

“NNA supports the Postal Service’s initiatives to cut its costs and get ready for a new, smaller mailing network, but some of its recent programs allegedly designed to create new mail volumes are much more likely to cost it business and make its survival even tougher,”Anfinson said.

“Post offices should not be in the direct mail business,” he said. “USPS should focus on cost-effectively delivering the mail it has and provide a low-cost, reliable system for businesses and individuals who want to use its services. If it is going to try to become an advertising sales force, it is going to sacrifice some of the high degree of trust it enjoys from the general public. And it certainly will make newspaper people more skeptical of its value.”

NNA Postal Committee Chair Max Heath, who expressed early doubts about EDDM, said he hopes the PRC will not give the program an easy pass.

“I know it is tempting, as concerned as all of us are about the financial footing of the Postal Service, to turn a blind eye to about anything it wants to try that might improve things. But sometimes when you’re in a ditch the thing to do is to stop shoveling. EDDM isn’t where USPS should put its efforts. It will never be an advertising seller of consequence. What it can do, and what I’m afraid of, is that it will use its market power to disrupt a lot of small businesses that are sellers of consequence and in the process divert itself from its core competency of distribution,” he said.