When All Else Fails Eliminate the Value

It is no secret that the U.S. Postal service is in dire straits and getting pressure to improve it’s financial position.  I thought I had seen it all until I saw this article last week in the USA Today.

The U.S. Postal Service’s plan to save $2.1 billion a year and fend off possible bankruptcy threatens to end almost all overnight delivery of first-class letters and postcards next year.

Isn’t the way the U.S. Postal Service adding value by delivering letters and packages as quick as possible from Point A to Point B?  So instead of addressing waste in the process, they are going to eliminate a value added feature.

This will surely affect businesses.

“Everyone from Netflix to timely magazines to the greeting card industry to political campaigns who still rely massively on traditional mail deliveries will be negatively impacted,” says Adam Hanft, a consumer-marketing specialist who heads Hanft Projects.

Online retailers — not to mention small and midsize businesses — that are dependent on timely shipping could feel the pinch. Nearly one-fourth of local merchants use direct mail as a crucial marketing strategy, according to MerchantCircle, the largest social network of local business owners in the U.S.

This just is just backwards.  If you are going to cut something, cut something that is adding little to no value.  That would be something that is not being used by your customers.  Would an automaker stop putting radios in cars to save money?  No.  They add value for the customer so it would stay.

Plus, stamps are going up next year again.  I’m sure another raise in package rates is right behind it.  If a normal, business cuts an item that adds a lot of value for its customers and raised it’s prices at the same time it would not survive.

These moves aren’t going to save the Postal Service.  They are going to squash it.  What a chance for UPS and FedEx to jump in and increase it’s business.

If the U.S. Postal Service wants to survive, it should focus on the customer needs and eliminate what does not add value.  Not what does.

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Posted on December 16, 2011, in Customer Focus, Government and tagged , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. Seriously, what are UPS and FedEx doing this holiday? Securing good contracts from online retailers and giving them a price break, adding temps, adding trucks(?) or circling routes more than once? If you want something to get somewhere, do you go to UPS or the Post Office?

    I agree, there has to be another way. Even though there are spotty and sporadic uses of lean in facilities, I’d bet a dollar that the office processes are a mess. Is all that automation effective or overkill?

    Don’t get me started on direct mail. It hasn’t been demolished by email but by exorbitant postage rates. If you did the math, you couldn’t market anything with a price of less that $50 to $100. No postcards to remind people of meetings, no opportunities for small companies to get into the game like LandsEnd and Talbots.

    But if the Post Office went away, who would we pick on? They are such an easy target.

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