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Get ready for direct mail costs to soar, if Postal Service gets its way.

Dear Subscriber:

Standard Mail rates are likely to rise faster than the cost of living, under proposals unveiled this week by the U.S. Postal Service.

That's bad news for newsletter publishers, and for anyone who uses the mail to seek new business. Even worse: Flats mailed at the Standard Mail rate are likely to go up even faster than letter-sized direct mail, because they can't be processed on USPS's letter equipment. That's bad news for those who mail catalogs and other things as Standard Mail that don't qualify for High Density Saturation rates.

The Postal Service also proposed eliminating Saturday delivery. We think that's a bad move for a couple of reasons. First, it may impact some retailers that need to have sale flyers delivered on Saturday. It will also affect politicians, who typically time their final mailing for either the Saturday before election day or the Monday before.

But it won't affect flow of mail to you. The Postal Service will continue to process mail as it does today, and businesses that collect mail on Saturday from Post Office Boxes and caller services will be able to continue to do so.

The Postal Services proposals aren't a done deal. They have to be approved by the Postal Regulatory Commission. We talked with some associations--Direct Marketing Association and American Business Media, among others. (SIPA didn't respond to our request for its views on the matter.)

They indicated there are simply too many parts of the proposal to have a blanket position. Obviously, they oppose larger than absolutely necessary rate increases. ABM, which represents business magazine publishers, told us it "has not taken an official position on ending Saturday delivery," but it "does accept its inevitability should the Postal Service get an okay from Congress. And we cannot come up with an alternative way to save $3 billion a year."

As for increasing rates for Periodicals, ABM said it doesn't think Periodicals are as large money loser as the USPS data suggest, "in part because it continues for its own convenience to hand process a good deal of machineable mail, thus unnecessarily driving up costs."

How to Wreck Your Business: Do as the Postal Service is Doing

The U.S. Postal Service announced yet another series of moves, all intended to address a huge deficit. Like the bleeding practiced by doctors back in colonial times, they are more likely to kill the patient than to save it.

Let's be clear: The Postal Service is in a desperate situation. It's got a huge deficit, one caused by both the Great Recession and by a shift of certain types of mail--like bank statements--to the Web. It's not generating enough revenue to cover its expenses.

So how does the Postal Service plan to address this problem? Not by generating more revenue, but by reducing the opportunity for consumers to use its goods and services.

The Postal Service plans to end Saturday mail delivery. It plans to close more post offices. We think both are a huge mistake--and closing more post offices a bigger mistake than ending Saturday mail delivery.

Postal Service execs, huddled in a bunker, seem to think the way to make money is to save money. But saving money works only when the savings are reinvested in marketing, not when they are used to simply balance the bottom line.

We asked the Postal Service about a number of ways it might grow its revenue. The Postal Service didn't reply. But here are our suggestions:

1. Accept delivery of UPS and FedEx packages for PO Box customers. FedEx Office and the UPS Store will accept your mail, and put it in a postal box for you. There's no reason why USPS shouldn't do likewise. By taking packages shipped via the competition, USPS would increase contact with customers and increase the likelihood customers would ship their packages via USPS, not via UPS or FedEx.

2. Offer banking related services. If banks can operate branches in supermarkets, why can't they also operate in post offices. The rent the bank paid would help to reduce the cost of operating that post office.

3. Offer some of the services that UPS Store and FedEx offer. There's no reason why USPS couldn't provide copy services similar to what FedEx and UPS office in local offices.

How Mequoda Raised Prices for a Conference--And Cut Attendance 38%

A recent Mequoda Daily e-mail took me back to my first months as a publisher. I had bought a newsletter, and decided it would be a good deal to give our readers even more because, you know, more content justifies a higher price.

So I shared the vision of more content with a reader whom I met at a packaging industry conference.

"Good God, No!" he shrieked. "We don't want or need more. What you bring is tightness, not length ... focus, not breadth."

Mequoda group stumbled into that more-is-better trap. They decided to add more content to the Mequoda Summit "to further enhance the experience for our attendees." And they decided to increase the price by 14%. The result: A stunning 38% drop in attendance.

Mequoda deserves a tip of the hat for sharing the results of its price increase with the world.

But we have to wonder. What were they thinking? While the Obama Administration tells us the economy is looking up, and in the long run is going to be just fine, we're reminded of John Maynard Keynes' dictum: "In the long run, we're all dead."

The economy is not fine. Unemployment remains above 10%, layoffs continue and that growth in Gross National Product is the result of replenishing inventory, not the result of new demand for consumers. Not only that, but consumer prices in January was up just 0.2%. Strip out food and energy prices--energy was up a lot--and the consumer price index actually fell. On a 12 month basis, the CPI for all items was up 2.6%, but strip out food and energy (up 19%) and the CPI was up only 1.6% over 12 months.

We're told by some copywriters that they barely have time to drink a cup of coffee, demand for their services is so high.

But overall, this is not the time for dramatic price increases--especially with business uncertain as to what the Obama Administration and Congress will do on both health care and taxes, and especially not the time for a 14% price rise.

Marketers in other fields are delivering more value, even as they find ways to reduce their prices.

Reed Business Sells Library Newsletter, Other Titles

Reed Business Information sold Library Hotline newsletter along with Library Journal and School Library Journal to Media Source Inc.

Media Source's CEO, Randall Asmo, said the two magazines are "valuable" and added that they each "deserve a corporate home focused on libraries." Media Source already owns library and book-focused titles Junior Library Guild and The Horn Book.

Asmo added that both newly-acquired titles' editorial and advertising teams would remain operating out of New York City.

Media Source, part of Riverside Co., as private equity firm, has three businesses focused on promoting and selling children's books. Its main business line, Junior Library Guild, provides book subscriptions to libraries. Its other businesses include a catalog-based book order service and a publishing house. Riverside also own HC Pro.

Bob Bly: Design Your Business to Deliver the Lifestyle You Seek

Bob Bly, the copywriter and marketing consultant, has written his 77th book, and it's one to which every marketer--but especially every entrepreneurial marketer--should pay attention. We're going to interview Bob Monday, March 22 at 4 p.m. Eastern. It's a free, no-charge call--but we have only 150 phone lines available. To participate in the call, dial 1-218-936-7999 and enter access code: 251837.

Bob's book begins from what we find is an unusual approach. He tosses aside the usual advice to build the biggest business you can, and to rake in the most money you can. That's not to say Bly advocates not reaching for the stars--he's successful, and he thinks you should be successful. But Bly thinks you should design your business to get the lifestyle you seek.

If you want to build an empire to rival Donald Trump, go for it, Bly says. But if you would rather spend time at the beach, build your business to do just that. That's what Dan Capell, the consumer magazine circulation executive and consultant who died recently, did when he created Capell's Circulation Report newsletter a quarter century ago.

Dan's passion was softball, and he set the CCR publication schedule to twice a month--except in June, July and August, when publishing would interfere with softball, and in December, when publishing would interfere with office parties. In those four months, CCR came out just once a month.

During our call with Bob Bly, you'll learn:

* How your vision can protect you from bad decisions

* How you can micro-niche your way to success

* What you want to know to find your ideal customer

* How to analyze your competition

* How to build a stronger USP

* Why you should sell a lifestyle, not a product

* What's the silver rule of marketing

* How to integrate your online and offline marketing

* What's the single most important thing you should do in crafting your marketing plan.

* Why non-marketing factors can cause your plan to fail

To access our free call on Monday, March 22 at 4 p.m. Eastern, dial 1-218-936-7999 and enter access code: 251837. There are only 150 lines available.

NY Times Links Newsletters to Washington's Toxic Culture

The Washington Post dumped a column on social graces written by Sally Quinn, the wife of the Post's former executive editor, Ben Bradlee.

It had to go, Quinn said, because the gentrified society it was aimed at--the Washington of 1975 in which elites gathered in "salons" at Katherine Graham's home and elsewhere--has gone with the wind.

"Now the butter knife has been replaced by a machete," The Times reported. "People with opposing political points of view are less likely to eat with the loyal opposition at night than to try to dine on them in a quick hit on MSNBC or Fox News. And even once that is accomplished, there is the endless peering into the BlackBerry to observe the day trading in political capital that goes on in blogs, on Twitter and in e-mail newsletters."


Joel Whitaker

Editor and Publisher
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Author:Whitaker, Joel
Publication:The Newsletter on Newsletters
Date:Mar 1, 2010
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