USPS – The Real Lesson

November 29, 2010

Business

THE HEADLINE

The U.S. Postal Service would cut Saturday mail delivery starting in the first half of 2011 under a plan the agency will give its regulator tomorrow.

The Postal Service, which forecasts a $238 billion budget deficit by 2020, says it would save about $3.3 billion in the first year from eliminating deliveries on one day and $5.1 billion a year by 2020.

“Given the fact that we’re facing such a huge deficit, we’d like to move as quickly as possible,” Postmaster General John Potter told reporters today in Washington.

Ironically I read this on Yahoo news today right after I scanned and converted all of my business and personal tax information to email to my accountant in New Jersey. Last year I priority mailed the documents for about $12 which probably was put on a cargo plane with all the other mail. No more – times are changing.

My really important communications are sent and received electronically. I get most of my personal and company bills electronically and pay them the same way. I have eliminated getting as many statements through the USPS not because I have anything against the USPS but rather I just like the convenience of electronic mail which I can get anywhere I have internet access, on my phone, or in a different state or country. Thanks to technological innovations the content is rich, clear and I can file it easily and forward it to anyone I need to. All in seconds instead of days.

Getting the “mail” has become a chore. Where we live our mailbox is centrally located in our neighborhood. This never was an issue as there was always something important I was waiting for. No more. Everything I really need gets to me electronically and every flier, sale, and catalog I receive is typically available to me electronically a few days prior to receiving it from the post office. My office monitor is a whopping 24 inches with great resolution and zoom functionality – my electronic mail is high def not to mention the added video content to more and more communications of late making the experience very rich. When all else fails if I really need to I can always print just what I need when I need it.

Last week I bought 4 new tires for my wife’s car. I received the flier for Discount Tire electronically and was alerted to a $70 rebate if I bought 4 tires. The rebate was expiring that day. I needed to act quickly! I researched and finalized what I needed in a matter of minutes and even read a few testimonials on reduced road noise and wear. I ordered the tires and made an installation appointment via the website, received my receipt via email, and even electronically submitted my rebate. 2 Days later while traveling on business out of state I received the email notice that my tires were in. Last night I received confirmation that my rebate was accepted and was given the option of having the $70 sent to my bank account which, of course, I did. All of this occurred without the need of the post office.

I am disappointed in the USPS. They misread the market, how to use technology, and their customers. They had the best opportunity to reinvent themselves. They were the incumbent. It was their business to lose.

In the end a mistake they made was that they thought they were in the business of delivering mail and spent a lot of time and money figuring out how to deliver mail better. They introduced new equipment to sort mail. They analyzed routes to make them more efficient. They trained their people on how to deliver mail better. They introduced Zip+4 to better assure delivery accuracy.

What they didn’t do was to rethink their role and opportunity. The USPS provides communication services which for many years has been in the form of hard copy print, letters and packages. Just imagine if they focused more on how to establish themselves as the premiere provider of communications services to several hundred million incumbent customers. What if the USPS invested a portion of the billions of dollars they have over the last several years in building out their services. Imagine having the option to have your mail scanned and sent electronically. Imagine their post offices being internet cafes for people without internet access. They could have sold their package business to UPS, DHL or Fedex for billions. Just imagine…

Volumes are off and will continue to decline. Their high fixed overhead and labor cost will only drive the cost per delivery higher and make the USPS even less competitive. Unfortunately it’s a downward spiral. Contrary to all the jokes the USPS does what they do extremely well. They don’t lose mail and it’s rarely damaged. Their focus on operational excellence has pay off. I wanted my email account to end in usps.com more than anyone.

I like many of you saw this coming. I am guessing that the decision to remove Saturday mail delivery will be met with little resistance and, to a large part, go unnoticed. For me it’s one less thing to do on the weekend.

History has demonstrated that industries typically get dis-intermediated by other industries. Many companies spend a lot of time or should I say too much time on internal operations- Working on getting things right, more efficient, and extracting the last penny of margin out of the engine. While this is necessary, business leaders must spend the time looking outside of the industry at technologies and business tendencies that might not apply to them today but could tomorrow. Having vision beyond the typical boundaries is essential and will help define the industries and companies that morph to the market.

About Frank Picarello

Frank is a well-respected leader in providing technology services to small and medium-sized businesses. He is currently COO for TeamLogic IT, Chairperson for CompTIA's Small Business Owner's Group, and a member of CompTIA's Unified Communication Committee.

View all posts by Frank Picarello

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