October 15, 2015

There is no doubt that the U.S. Postal Service has a lot going on, but we want to emphasize that retaining its existing customers should not be lost or diminished in the business of everything else. In fact, we believe that customer retention is one of the most cost-effective and strategically important things it can do.

Retention is critical primarily because the USPS is a network operation that relies on volume to cover high fixed costs and rich content to keep the recipients of mail interested. It also is a government-owned public service agency that relies on public and political support to thrive. And it is being disrupted by new technologies.

Lately, it appears, to many existing mail customers, that USPS leadership is focused elsewhere. Their focus seems to be on two things—growing the competitive package business and obtaining breakthrough reform legislation. While it pursues these ambitious goals, the U.S. Postal Service seems to be falling down on the basics that matter most to its $54 billion mailing customers—reliable delivery service and rational, affordable, predictable pricing of that service.

Customer retention is not enabled by implementing simultaneous reductions in planned delivery times and nationwide scheduling and staffing in early January, resulting in unpredictable service that does not meet the lengthier targets.

Customer retention is not enhanced by filing an aggressive rate case with errors and unintended large price increases while also litigating and lobbying to keep a temporary exigent surcharge forever.

Inexplicably, as actions speak louder than words, retention of mailing customers does not seem to have been a USPS priority in 2015.