ACMA Forum Recap: Conference Provides Pick-Me-Up From ACCM

May 21, 2009 By Paul Miller, Editor-in-chief, Catalog Success

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“We tried to get on a level playing field,” she said of the 2007 rate hike, noting that flats were previously contributing less than half their weight compared to letters. The gap narrowed after the increase, but letters still contribute more.

And with more potentially damaging postage increases ahead, Cigno encouraged mailers to hire experts to look closer at their cost coverage and work with the PRC on ways to minimize the blow.

By the end of the PRC sessions, the ACMA’s Davison and attendees were working feverishly on pulling together a technical conference with the PRC, USPS and mailer reps to find ways to keep future rate hikes in check.

In a later session, Bernstock, who the USPS hired less than a year ago to bring his extensive private industry experience to the 800-lb. gorilla, held a similar open dialog with attendees on both its need and mailers’ need to design a new catalog delivery service that addresses catalogers’ needs in pricing, service, operational efficiency and operational cost containment.

“Costs are costs, but we’re willing to devote our resources to work with you,” he said. “It'll take a total systems approach to find ways. We’ll move mountains to make the Postal Service a strong and economic partner for the catalog industry.”

He broke down the USPS’s and mailers’ much-needed agenda as follows:

1. Price: to create prices that more precisely mirror catalogers’ needs and applications. The USPS, he said, will examine relaxing the piece and pound rates by expanding from the 3.3 ounce flat rate limit.

“This could lead to more pages and SKUs, better response, more sales and a minimal incremental cost to the USPS,” he noted. Beyond the much anticipated postage “summer sale,” which will offer significant discounts to high-volume catalog mailers from July 1 to Sept. 30, Bernstock said he’d like to explore other seasonal-based pricing and will address cost coverage issues.

2. Service: to examine changing service standards for catalog delivery. “We may be able to create a different set of service standards designed to meet catalogers’ needs,” Bernstock said.

He threw out the following possible scenario: Could catalogers live with longer delivery times as long as they’re consistent and predictable? Longer delivery times, he noted, create flexibility and cost reductions for the USPS; that could help fuel more favorable rates for Standard Mail flats in the future.

3. Operations: to optimize entry, mail preparation and makeup. Bernstock said the USPS could create a service for catalogers whose rules would improve the ease of use while encouraging efficiency through its flats sequencing system. “We have to work with you to have that lowest cost delivery system,” he said.

All his ideas on the table take increased catalog mail volume into account. “We want your volume, because we want to play the role of market-maker,” he said. “We want to design it to the specifications you want. We have the freedom within our cost coverage guidelines to be as creative as we choose to be.”

Treating his session as the PRC reps treated theirs, Bernstock asked the audience if they’re game for his ideas, and in all cases, mailers responded positively.

All was consistent with ACMA’s mantra, which Davison noted as being in the interest of building relationships with postal and PRC reps, as well as Congress. To date, however, “catalogers have been the single greatest under-represented” entity in postal rate setting, he said.