The USPS has just announced the loss of some $2.8 billion over the fiscal year that ended on September 30. This loss occurred despite a decline in mail volume of some 9.5 billion pieces and substantial efforts to trim costs and operate more efficiently. To be sure, the spike in fuel costs had an impact, but somehow I don’t think that was the tipping point that led to the loss. What this all but ensures is a possibly significant postage rate increase in 2009.

Depending on its size, this increase could have a profound effect on many mailers –and their customers. A bank mailing out a million statements every month is spending over $350,000 a month on postage, so any CFO worth his country club membership is going to be looking at that as place of potential cost reductions. In fact, many if not most, banks, utilities and credit card companies are already encouraging customers to shift to electronic statements. Some banks are making electronic statements the default choice for new accounts and charging a fee if the new customer wants to get theirs in the mail. While it would be a marketing and public relations disaster to force all customers to shift to electronic delivery, I think institutions are likely to begin charging people who prefer receiving hard copies, especially given the state of banking these days. That’s one approach.

The other is to make a statement more useful as a customer touch-point and increase its relevancy to the customer beyond being merely a bill. The knee-jerk reaction is TransPromo, the idea of putting marketing offers on bills. This seems, at least for now, to work best in relatively limited ways, but give it time. The real estate on a statement, though, is every bit as effective for informing and educating customers about products and services, providing advice and information, announce changes in policies, and generally building relationships. Every organization that sends out bills and statements has plenty of other information to communicate and that monthly envelope that’s sure to be opened is one of the cheapest and most effective ways of reaching every customer. The cost of printing and sending out the statement is still there, but when it does more than just being a transactional document it can be money well spent.

There are a lot of layers to this and there is very definitely no one-size-fits-all solution. How do you see postage costs affecting the transactional market? How do you think statements can be used to be more than just a revenue collection medium? Mailers are all looking for answers, and more than a few of them read this blog. Let’s talk!