Does changing postal services lead us to a digital fast track?

Faced with some major strategic challenges, as are most western mail services, little wonder NZ Post have requested a change in their Deed of Understanding with the government. But it’s timely to ask where the use of 1-1 channels might go and the possible impact of what NZ Post are suggesting.

This isn’t the place to get into the potential change to NZ Post’s retail footprint. But in terms of their delivery services, it is timely to make some comments as changes to the Deed of Understanding may lead to an impact on how marketers view the role of mail going forward, as part of their marketing mix.

The current proposal to revise the Deed, as it stands, means that an opportunity to make some gains in terms of volumes and potential profitability from the marketing industry is being spurned. And it’s ironic, at a time when the NZ Post teams that have been working with the marketing industry have been innovative and, responding to much debate, are in the process of finding ways for us to post more for less. And lets not forget that pretty much any direct marketer you talk to at the moment will tell you about the improved response rates of mail (thanks not least to less clutter).

There are two key issues at stake, one addressed by the proposal (delivery days), and one avoided (pricing and how it is managed viz competition).

Firstly, cutting delivery days simply reduces options and risks making time sensitive campaigns unworkable. How NZ Post address this once they have the Deed revised will be interesting.

Secondly, the pricing issue is frustrating. There are so many inconsistencies in NZ Post’s pricing structure, a revised Deed represents an opportunity for marketing mail to be handled differently than other mail from a pricing point of view. I mean, why not? For as long as I’ve been working with direct mail in New Zealand, the price influence on size of format (small = cheap) has handicapped creativity and mailbox impact. And there is no volume discount, which handicaps volume mailings compared to using less intimate but more cost effective wide reach media like TV. Companies spending significant amounts on broadcast media expect better discounts, not unreasonably. NZ Post have sidestepped this in their proposal.

There IS growth potential in the system – marketers could post a lot more, production is getting cheaper, digital personalization driven by big data all the smarter, and response rates are great. But the amount of times I’ve seen Heads of Marketing wince when I tell them the costs to post over 500,000 items….

Our alternative channels for 1-1 are still not perfect; email has challenges across so many platforms and the issue of engagement and open rates which means that it is a great channel but you need to email more regularly to increase the chance of response; mobile is still evolving and the formats mean that you have to be QUICK to get people’s attention on detail. Mail is currently by far the best way to deliver a CRM programme, or even just a regular contact programme – people spend time looking at printed materials, they tend to keep some elements, and can keep returning to them. The digital age has bred a generation of deleters!

Our challenge as marketers is to stop worrying about what NZ Post will do as it would seem our influence is pretty small, and look at what we can influence, whether it be better ways of engaging people across digital platforms, instore engagement and entertainment, and particularly email, mobile and tablet. This is very exciting space and it is heartening that as broadband penetration and bandwidth increases, we can think in terms of quite different engagement elements to deliver timely, relevant messages to encourage brand engagement and sales.

As Douglas Adams said “First we thought the PC was a calculator. Then we found out how to turn numbers into letters with ASCII — and we thought it was a typewriter. Then we discovered graphics, and we thought it was a television. With the World Wide Web, we’ve realized it’s a brochure.”

Author: Ben Goodale