Disqus - Latest Comments for Hamilton_Davison

Re: USPS Pitches Summer Sale 2010

Hamilton_Davison — Wed, 24 Feb 2010 18:43:55 -0000

Just to clarify: I won't presume to speak for the Postal Regulatory Commission which has its own rules, procedure and requirements. What is more, the USPS has NOT officially filed anything with the PRC for a Summer Sale 2010. Based on the information at hand now, I was asked to handicap the likelihood a sale event might be held again this year. I world say it is more likely than not but the USPS must make an official filing then the PRC must approve it and either may modify the program before it is a go for marketers. We should know more in the coming few weeks. Hope that helps. Hamilton Davison, American Catalog Mailers Assn.

Re: Catalog Prospecting Rate? Not This Year

Hamilton_Davison — Sat, 21 Feb 2009 13:30:15 -0000

NOT THIS YEAR? Not necessarily.

The headline suggests catalogers must wait until next year to achieve any meaningful incentive that promotes the use of mail in the marketing mix for catalogers. Not so. I want to provide a clear picture on what is happening with the USPS on a prospecting rate and the time frame that such an incentive might occur.

The American Catalog Mailers Assn has been working for months with the USPS to devise a workable incentive structure that encourages greater mail use for new customer prospecting. As part of that effort, ACMA has organized a variety of meetings between catalog members and USPS managers to discuss how incentives can be constructed to define a win-win for both sides (an incentive that is not also beneficial for the USPS, if approved at all, would be short lived).

Leading up to this latest rate adjustment notice, ACMA and the USPS worked aggressively to include an incentive for catalogers in the recent filing. Despite enormous work on all sides, it was impossible to complete this in time for the announcement of new rates effective May 11, 2009. THIS DOES NOT MEAN THAT IT WILL BE A YEAR BEFORE SUCH AN INCENTIVE IS AVAILABLE. Assuming we can figure out a workable structure, it could become effective shortly after approval (by the USPS Board of Governors and the Postal Regulatory Commission). While the USPS is using an annual rate adjustment schedule, there is no legal requirement that any incentive be held until a subsequent year's rate adjustment. First, we must devise an incentive that works. The earliest possible implementation date can then be defined.

ACMA continues to pursue a variety of solutions aimed at restoring the economics of mail use by catalogers. With catalog volumes down appallingly following the 2007 rate hike, and the USPS now acknowledging publicly their intention to fix the catalog industry, it is critical that a workable solution be found to address mail’s marketing effectiveness for catalogers. ACMA would welcome your help in this important work.

Hamilton Davison
Executive Director
American Catalog Mailers Association
hdavison@catalogmailers.org
800-509-9514

Re: ACMA Head Happy with Slim-Jim Updates

Hamilton_Davison — Fri, 02 Jan 2009 18:16:20 -0000

I did not chose the headline nor does it accurately characterize our position but it clearly grabs attention.

I tried to get an email to you earlier today. Please get in touch so we can compare notes more directly and sort out the best way to respond in unison as that is a much stronger approach.

Hamilton Davison
ACMA Executive Director
hdavison@catalogmailers.org

Re: ACMA Head Happy with Slim-Jim Updates

Hamilton_Davison — Thu, 01 Jan 2009 16:41:54 -0000

Davison responds….

Whoa. This was not meant to be controversial. I try that at the end of this posting. First, please re-read the piece. I indicated the process was improving, not pleasure with the outcome. More, if one reads the variety of articles, formal comments and newsletters written by ACMA, it is clear ACMA continues to stress the utter disarray of the catalog industry as a result of ill considered decisions. The American Catalog Mailers Association is actively working with USPS and PRC decision makers to find a solution to keep the catalog industry from migrating away from mail due to a fundamental change in cataloger economics from unchecked cost escalations in postage and elsewhere. Let’s examine each.

First, the process: In the past the USPS developed new regulations without input from industry. They then threw these “over the transom” expecting all mailers to simply adjust to new regulations that mailers did not help develop, had little advance warning of nor enough time to adjust to, and that didn’t reflect the realities of how customers use the mail. With the slim jim debacle (and yes, it is a debacle—see below), at least industry has worked side-by-side with USPS ops personnel. The process has improved. While catalogers certainly not gotten what they need to be successful, there has been more dialogue and more willingness to work together than in the past. Gone is the “take it or leave it” attitude of a monopoly indifferent to customer concerns. No, we have not solved the problem but at least we are now having productive discussions on how this might be accomplished. Work continues at a feverish pace.

Second, the outcome: As is noted, this issue for catalogers arose due to a rate decision increasing postage 20% to 40% for catalogers, combined with an ill-informed suggestion catalogers could simply migrate to slim jim formats and get lower automation letter rates. Leaving aside the significant cost and risk of redesigning mail formats or the lack of time to test the impact on response, brand or production, this “solution” was out of touch with what was really happening in USPS processing plants. Because slim jims are a slim part of the total, nobody focused on the fact that plant managers were not running slim jims on automated sorting equipment. When catalogers and others started to migrate to slim jims and the volume increased, the problem became more visible. Since each format must cover its cost, once the true manual cost of processing is applied, slim jims would be closed entirely as a viable alternative. Better we work to figure out what is possible within existing infrastructure while continuing to work to solve the root of the problem: uneconomic catalog postage costs (slim jims are marginal or ineffective anyway to some catalogers). Expecting the USPS to retrofit billions of dollars of letter handling equipment to accommodate a very small percentage of total letter volume is not realistic.

There is clearly much more work to do to solve the problems—both with slim jims and the economics for full size catalogs, a format proven effective for decades and on which a $270 billion industry is built on. At the end of the day, it is the marketing effectiveness of each channel or format that matters.

Now for the controversy: These issues are far to complex to be resolved here. Absent an organized industry-wide effort to engage in a constructive dialog with the USPS and its Regulator, we will have more of the same—decreased effectiveness of what remains a primary communication channel with customers. Today’s crisis is a direct result of lack of attention on the part of catalogers combined with monopolistic attitudes and a lack of understanding on the part of policy makers. The USPS is exhibiting real change—are catalogers? (Read the recently published introduction in Libey and Pickering on RFM and Beyond, 2nd edition, for the entire sordid story on how catalogers got to where they are today, ISBN 0976517205.)

Comments posted here raise legitimate concerns but this venue will not get the results we all seek. Instead, they must be addressed through direct dialogue via official channels. ACMA has formally responded to both Federal Register Notices on slim jims and will respond again to this latest one. The second Notice drew only five responses, with one of these being ACMA’s and another from a broad-based group that included ACMA. Interestingly, in only a few days, there have been as many responses to this piece.

There are well over 15,000 catalog companies in the US and thousands of suppliers but only sixty visionary companies give generously of their time and resources to make a difference. ACMA is a fledgling start up with a staff of one that clearly needs more support to address complex problems of an industry in turmoil. Our membership is a fraction of what it must be effective long term.

If you care about these issues, please join us and help. We cannot expect the few to carry the load. Right this very moment, we have 27 days to craft our next FORMAL response on slim jims. Will you help? I hope so. We need your input so it reflects the wants of the entire catalog industry and its suppliers. Please email me right now and I will be happy to tell you how. Together, we can make a difference in the future. I hope you will be a part of it.

Hamilton Davison
Executive Director
American Catalog Mailers Association
hdavison@catalogmailers.org