The US Postal Service is looking for a partner to help it offer “an end-to-end Online Direct Mail Solution targeted at the Small / Medium Enterprise segment”. Here’s the summary of the solicitation:

The USPS is conducting market information research to identify interested organizations with the capability to partner with the USPS to develop; host; and market a go-to-market strategy.

The Postal Service is requesting industry comments and capability information from organizations with the experience, qualifications, proven approaches, solutions, and industry best practices necessary to deliver and operate an end-to-end Online Direct Mail Solution targeted at the Small / Medium Enterprise segment.

As part of this initiative, the Postal Service is exploring different relationship structures involving third parties. The USPS will provide a trusted brand name, trusted delivery, a marketing channel (including cost effective direct mail and USPS.com) and sales lead generation while leveraging the core capabilities of potential alliance partners, affiliates and/or suppliers. USPS is requesting industry perspectives on relationship structure options, the division of responsibilities, revenue share arrangements, and the working relationship.

USPS is requesting feedback on a broad range of capabilities from the potential partner in order to assess the most effective business relationship and division of responsibilities based on core capabilities.

The attached “Request for Information” gives more details on the rationale for introducing the service:

Research indicates that 35% of the more than 5.7 million small businesses in America use direct mail as one of the ways they advertise to their customers. Those that use direct mail allocate, on average, 29% ($3,780) of their annual budget ($13,260) for this purpose. It is safe to assume that approximately 35% of the cost of executing direct mail is postage (over $4.3 billion).

The polar dynamic of businesses either making no investment in direct mail or a relatively large investment can be explained by the mail’s scale economies. The out of pocket investment required to obtain a list, produce creative, print and pay for postage and deliver to the Post Office are usually substantially higher than the investment required for other media choices. Worse, the number of customers these small business advertisers are able to reach when they advertise by mail is much smaller than other media are able to deliver for a smaller investment. Nonetheless, advertising industry research suggests that, on average, direct mail has the highest return on investment (ROI) of any traditional advertising medium.

The proposed service would allow businesses to create their mail pieces online:

The creative design and format process will allow users to create postcards and letters in a few clicks. SMEs will be able to choose from available templates and images based on their industry, or create their own customized templates and upload their own images. In addition, users will be provided with guidance (either via wizards or educational pieces) on the development of impactful messaging given their goals for the direct mail piece (e.g., reach new customers, promote a sale, introduce new services/products).

The USPS also envisions providing links to third party list providers, an online payment feature, local or regional printing and induction service, and analytics to help small businesses track and analyze their return on investment.

Proposals and comments are due by April 23.

This entry was posted on Tuesday, April 6th, 2010 at 5:46 am and is filed under postal. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.