Posts Tagged ‘US postal service’

It’s the Market, Stupid!

Thursday, April 2nd, 2009

It’s not “the economy, stupid” it’s the market. Maybe the phrase should be it’s the market, stupid. Printing companies have been dropping like autumn leaves with no immediate end in sight. According to the NAPL, the future is looking “dim” (my word, not theirs). They expect that a minimum of 4,000 printers to as many as 10,000 will shut down over the next 10 years. Over the last 4 years we saw a decline of 4,800 plants with approximately 150,000 employees. Since 1994 we experienced a loss of over 11,000 plants.

What does all of this mean? It means that the current state of the economy, while rough, isn’t the real reason for the decline in the industry. That’s why I say it’s the market, stupid! Thanks to the Internet,the methods we have used in the past to communicate with one another are withering away. For example:

Newspapers: Major metropolitan newspapers have hit very hard times. Some have already closed shop and many more are about to. It doesn’t take a very clear crystal ball to see that those that continue to exist will be very different from the newspapers of yesteryear. Why? Craig’s List, and other free online classified services eroded the base revenues for the papers. Who would pay for something they can get free, and that has larger reach? Also, every newspaper now publishes their content online. You can do more on a web page than a print page–it’s more flexible. For example you can beef up your story with graphics and movies  on a web page. It’s also timely. Hot news can be displayed on the website within minutes, instead of waiting hours for the next edition to hit the streets. We have no patience.

Magazines: Reuters reports that, “Newsstand and retail sales of U.S. magazines fell 11 percent in the second half of 2008, with celebrity and women’s titles taking a hit as supermarket and drugstore shoppers cut back on spending.” Furthermore, “Fifty percent of all magazines are sold in supermarkets, and obviously those types of places took a major hit.” If the decline in single copy magazine sales is because of the economy, will we see a rebound when the recession ends? And more importantly, when will it end? Again looking through my rather murky crystal ball, I predict many titles disappearing, and those standing will see sharp decreases in readership. Printers relying on magazine printing will be hard hit.

Books: Booksellers report decreases, with the exception of Amazon Media who appears to be up. Amazon is invested deeply in electronics. The Kindle reader entirely eliminates the need for printing. Amazon has also benefited from third party sales (see my For Your Consideration Page on this blog). It is estimated that 1 in 3 books sold at Amazon is actually sold by a third party. Smarter marketing is bringing them more business. Borders reported a loss and announced they are trying to sell their international operations and may sell the whole chain.

Direct Mail Marketing: I was once told by Peter Harrison, a direct marketing expert who is now running Affiliate Crew an internet company, that “Everything that goes in the mail must be printed.” What happens when mail volume goes down? Think about it, banks and other financial organizations have gone paperless. You don’t mail in your bills anymore, you authorize payment on-line. Envelope printers have suffered because of this. Forms printers have also felt the effects. What about other direct mail campaigns? The US Postal Service keeps increasing rates as more and more direct mail companies discover other marketing avenues. The ones left in the game will  bear ever heavier a postage burdens. Once the cost of postage reaches the proverbial camel’s back, the direct mail business will be through. Kaput. What will the post office have to do then, personal letters? Even with my cloudy crystal ball it’s as easy as seeing the housing boom collapse. Really, who didn’t see it coming with overinflated prices, and interest rates at 1%?

Catalogs: I had trouble finding some figures for catalog printing, but I can tell you that the catalogs are pushing web sales more and more. If you think about it they face similar challenges to newspapers. You can just do more on-line to show off your product than you can in print. Why not video the item, particularly clothing, so you can see front, back, and side? Once holographic technology is here the public will insist on 3 dimensional views. It’s just around the corner.

Wedding Invitations & Announcements: I’ll admit that invitations and announcements have never accounted for a big slice of the printing pie, but those printers specializing in them have been hit hard. Why? It’s because people have access to paper options, graphic design programs, and digital printing. They create their own invitations with their own style and creativity.

NAPL also reports that only [are the] larger plants growing in number. Those printers without deep pockets will be swallowed by the others. It’s the law of the jungle. The downside is that more print industry employees will find themselves unemployed. What are their options in the new economy?

Like the dawning of the Industrial Age big changes are happening, but at a much faster pace. What will it be like when clouds in my dirty crystal ball clear? I just don’t know–do you?

How a 1/2″ Could Double Your Postage Cost

Wednesday, February 11th, 2009

I know I said I was going to continue the printing plant tour and I will, but not today. I’m thinking of envelopes at the moment. One client  is anxious to test a mailing using an extra large window envelope. He envisions the window big enough to contain the customer’s address and display a bold personalized laser printed message. It’s probably a good idea. One secret to direct mail success is to vary your presentation so your customers can’t anticipate what is inside the envelope. Otherwise they might discard your message without even looking at it. Horrors.

The problem with getting too creative is the US postal service. They don’t like anything that doesn’t fit their narrow parameters. In their perfect world every piece of mail would be exactly the same size, use exactly the same paper, and be addressed exactly the same way. Then nothing would jam their equipment and everything would  fly through their systems with very little trouble.

How can we reconcile what the post office wants with the need of the advertisers to attract attention? How can you make your sales message heard in the babble of other direct mail messages? Don’t get me wrong the post office will mail envelopes that don’t conform to their specifications, but the extra postage required to do this usually makes it economically unfeasible.

Try different paper, try colored paper, try window variations, try no window, try matching the salutation on the letter inside with the address on the outside, but before you do all of that learn what the post office requirements really are. For example did you know you could mail a 6X9 envelope for the same postage as an ordinary No.10 business envelope? But if you mail a 6 1/2X9 1/2 size (the size you’d need to mail a 6X9 brochure) it could double your postage? That extra half-inch makes all of the difference in the world.

It’s not just extra postage either. There aren’t stacks of special window envelopes available at the special window store. There is a whole industry dedicated to what we call in the trade, envelope converting. If you want something unique, and different to capture attention, you will have to custom make your envelope. Custom envelopes, like custom anything, cost more, but the bottom line question is, will you attract more buyers by spending more, and will you get enough new buyers to make it worthwhile? There is only one way to find out–test, test, test. Try it this way, then try it that way, and keep accurate records of what pulls better.

The problem is once again, cost. The longer you can keep the press running without having to change plates or ink the better the unit cost, so running two different  5,000 piece jobs will cost more than running one 10,000 piece order. Testing will cost more than not testing, but how much will flying blind cost you in the long run? There is no way to know because you didn’t test.

It seems like a no brainer to me, but it isn’t my money I’m spending. The only thing I can do as a print broker is help the customer know what their options are, find the best ways to get their stuff printed, and always keep looking for better solutions.

The Easy Way To Reach Bill Ruesch
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