Memo to Mailers January 2003 (Text)
UNITED STATES POSTAL SERVICE
VOLUME 38 NUMBER 1
JANUARY 2003

REAL PEOPLE, REAL SUCCESS: ENTREPRENEURS USE THE MAIL TO GROW THEIR BUSINESSES
Mail is a vital tool in growing a business from the ground up. Just ask the 5,000 small business owners and entrepreneurs who entered the "Real People, Real Success" contest sponsored by the United States Postal Service.
"When I decided to return to teaching piano in 1997, I did a direct mail campaign using postcards. In little more than a month, I had over 40 students," wrote grand prize winner Barbara Granneman of Indianapolis, IN. She received so many responses she had to hire another teacher.
In five years, her business has grown dramatically, thanks to direct mail. "I have continued the mailings, and now have 32 teachers and over 300 students. We have opened a branch in Chicago," said Granneman.
First-prize winner Geoffrey Ellis of McKinleyville, CA, who makes and sells Native American flutes, says "I only have one employee: Priority Mail service with Delivery Confirmation."
Scott Mooney and his wife run Country Supply - a retail and catalog company. They are big fans of direct mail and are also first-prize winners. "We used the Postal Service's power and frequent interaction with our existing and potential customers to economically deliver our catalog via direct mail," said Mooney.
"Our sales doubled within two years and increased by over 500 percent within five years. We now serve over 400,000 customers nationwide, with annual sales exceeding $17 million. We could never have done this without Direct Mail," he said.
The youthful co-founders of The Chocolate Farm - teenagers Elise and Evan Macmillan - turned to USPS to deliver their custom-made chocolates via Express Mail
and Priority Mail , and credit the Postal Service's instrumental role in their "amazing journey." They've even been featured on Oprah!
Cathy Cousins, CEO of Lock Your Leather, Inc., says her motorcycle accessory business, based in Warren, OH, was attracting the interest of customers outside the United States and she needed an economical international shipping solution. She turned to www.usps.com and USPS's global package services. And she keeps turning to USPS as her business continues to grow.
Dartmouth Pharmaceuticals, Inc., of Wareham, MA, asks: "How do you take a product from $5,000 a year to $1.5 million in just a few years? Priority Mail." Nothing is more effective, says this firm.
From 5,000 entries, 21 winners were chosen. Some of their stories will be featured in post offices across the country. Other prizes include: a guest appearance on the national PBS show, Small Business School; an online learning subscription to the Small Business School website and a computer equipment office package from IBM.
Additional prizes include a 4,000-piece direct mailing from Zairmail, one-year mailing list subscription from ThinkDirectMarketing.com and gift card provided by OPEN: The Small Business Network from American Express.
Congratulations to all the winners!
Learn more about the winning entries at http://www.usps.com/realsuccess.

Here are the stories behind the top winning entries:
GRAND PRIZE WINNER:
MIDWEST SCHOOL OF MUSIC, INC.
Number of employees: 32
Number of years in business: 5
Barbara Granneman
Indianapolis, IN
When I decided to return to teaching piano in 1997 I did a direct mail campaign using postcards. In little more than a month I had over 40 students. That was too many so I hired another teacher. I have continued the mailings, and now have 32 teachers and over 300 students. We have opened a branch in Chicago. I have consistently enrolled at least one student for every 100 postcards sent, giving me a 1 percent return. My costs per enrolled student using the post office is $38. We have stopped all other advertising, except for the Yellow Pages because our best return on other advertising is 1/12 of 1 percent, and the best cost is $113 per enrollment. Thanks.
1ST PRIZE WINNERS
EARTH TONE FLUTES
Number of employees: 1
Number of years in business: 5
Geoffrey Ellis
McKinleyville, CA
I only have one employee: Priority Mail with Delivery Confirmation. That is how small my business is, so you can imagine how much I value my only employee! I make Native American wooden flutes in a small shop on the land where I live in the California redwoods. These are precious instruments - sacred to many of the players - and Priority Mail service is how nearly a thousand of these delicate creations have traveled from my humble workshop to the homes of the excited (and often impatient!) enthusiasts. Never a single flute lost or damaged! And with Delivery Confirmation, when they ask, "Where's my flute right now?" I say, "Look out your window, my employee is coming up the drive!"
THE CHOCOLATE FARM
Number of employees: 45
Number of years in business: 4
Kathleen Macmillan
Denver, CO
Delivering fresh, custom-made chocolates on time directly to our customer's door, even during summer heat, is critical to The Chocolate Farm's success. USPS Express Mail and Priority Mail provide fast, reliable service at great value. USPS earned our trust by consistently racing the clock to deliver our chocolates, in insulated containers with cold packs, to customers who give us credit for speedy delivery and no chocolate meltdown. USPS has been instrumental in our amazing journey. We were named the Number One Youth Food Business in the United States (YoungBiz Magazine), invited by the State Department to be the youngest Delegates to the 2002 Asia Pacific Economic Cooperation Young Leaders Forum and recently featured on the Oprah Winfrey Show.
DARTMOUTH PHARMACEUTICALS, INC.
Number of employees: 4
Number of years in business: 10
Michael Greco
Wareham, MA
How do you take a product from $5,000/yr to $1.5 million in just a few years? Priority Mail. Problem: A great product which rebuilds finger nails naturally but how to market? Mail samples to Dermatologists. Problem: Mailing samples to dermatologists will get lost in the shuffle. How to get noticed? Priority Mail. Dermatologists not only noticed, they began using. And once that happened, the flood gates opened. In just a few short years, sales zoomed to $1.5 million and continue to grow. The product line has expanded, new innovate products have been developed, and a nationwide sales force is being planned. All because of the awareness created by Priority Mail. Nothing we have done has been more effective - at any cost!
COUNTRY SUPPLY, INC.
Number of employees: 7
Number of years in business: 20
Scott Mooney
Ottumwa, IA
My wife and I built this family business and never even considered having a partner. Our sales grew to just under $200,000 annually, but we still wanted to grow. Limited to potential customers in our small town, we decided to expand through catalog sales. We designed and printed a catalog featuring our products. In essence, we then "partnered" with the USPS. We used their power and frequent interaction with our existing and potential customers, to economically deliver our catalog via direct mail. Our sales doubled within 2 years and increased by over 500 percent within 5 years. We now serve over 400,000 customers nationwide, with annual sales exceeding $17 million. We could never have done this without direct mail from the USPS. Thanks.
LOCK YOUR LEATHERS, INC.
Number of employees: 3
Number of years in business: 3
Cathy Cousins
Warren, OH
I am the CEO of a motorcycle accessory business. Our business has always had a good nationwide and Internet customer base. We were very weak internationally until we were contacted by a customer in Belgium.
This customer wanted a quote for our product and shipping. I grew dependent on another company whose prices have become noncompetitive. I realized I left a great resource untapped, www.usps.com. I went to the website and was able to quote Global Priority Mail and Global Express Mail™ prices to the customer. I not only doubled that sale but have since increased sales internationally by 200 percent. I also turn to the easy to use website to quote shipping and found that we save almost $2.00 on each sale.
2ND PRIZE WINNERS
Rocket Sportbike Sales & Accessories
Granite City, IL
Sabah & Company
Denver, CO
Head Country Food Products, Inc.
Ponca City, OK
Old World Butcher Block Furniture, Inc.
Ellensburg, WA
Specialty Baskets
Decatur, GA
Childs Capital, LLC
New York, NY
HSN Athletic Prep Academy
Honolulu, HI
Cyclotour Guide Books
Rochester, NY
Onemanfactory
Waterford, PA
Hawaiian XTreme Sports TV
Honolulu, HI
Pace, Inc.
Plymouth, MI
Eckert, Inc. dba Jophiel
Fort Wayne, IN
The Daily Bread, Inc.
St. Louis, MO
The Hunger Site Network
Seattle, WA
Freebears.com
Beaverton, OR
CONFIRM - GETTING BETTER FLAT SCAN RATES
Customers report they typically receive scan records for less than 60 percent of their PLANET-coded flat mailpieces. USPS analysis largely attributes this to the following reasons:
1. A notable amount of flat mail bypasses processing equipment and does not get scanned. USPS does not process flat-size mail on automated equipment for five-digit ZIP Codes that have less than 10 carrier routes, or that do not have sufficient densities to meet automation processing thresholds, or that cannot be processed with automation to meet delivery schedule windows. In these situations, the standard operating procedure in the field is to send five-digit bundles directly to the delivery units. It should be noted that all carrier route bundles always bypass automation and therefore would not receive scans.
2. A number of smaller plants do not have automated flats equipment. Three-digit and five-digit presorted mail for their service areas will not be scanned. Most basic presorted mail for these areas will receive an upstream scan.
The Confirm service is only relevant for automation-rate flat mailings. The table below uses national average data and arrives at an expected scan rate for automation flats that is close to the 60 percent rate reported by mailers.
For individual mailings, however, the expected scan rate will depend on the destination area and on the percentage of the mailing that is five-digit presorted. For some mailings the expected scan rate could be 80 percent or more, while for others it could be substantially below 60 percent.
To enable mailers to predict and evaluate scan rates for their individual mailings (or for ZIP Code areas), USPS is providing location-specific information on the Confirm website www.planetcodes.com. These are the most current lists developed, based upon equipment placement and sort plans. These lists will be updated periodically, so please log on to the Confirm website for the latest lists:
A list of five-digit ZIP Codes for which five-digit presorted mail is typically not processed on automated flat sorting equipment. This list is available under hyperlink Non-automation 5-Digit. A list of sectional center facilities (SCFs) that do not have automated flat sorting equipment. This list is available under hyperlink Non-automated SCF. The automation equipment inventory list describing the inventory of AFSM-100, FSM-1000, and FSM-881 machines across the nation.

This list is available under hyperlink Flat Automation Equipment Inventory.
With this information, both mailers and the USPS will be better able to evaluate whether the scan rate for a particular mailing or area is about what would be expected or sufficiently below expectations to indicate a need for further investigation.
To ensure accuracy, please report any anomalies noted in the lists to the National Customer Support Center at 800-238-3150.
PMG SAYS COMMISSION HAS HISTORIC OPPORTUNITY
Postmaster General John E. Potter says the key question for the newly formed presidential commission on the Postal Service is how USPS can continue to provide universal service at affordable rates in the face of potentially declining mail volume.
"The issues related to postal services in this country are complex," said Potter, addressing the first meeting of the President's Commission on the U.S. Postal Service Jan. 8 in Washington, DC. He said the mailing industry is made up of a wide spectrum of varied interests, and noted that conflicting opinions abound about Postal Service reform and transformation. "And everybody in this country," he said, "is a customer of the Postal Service."
Potter told the commission's members "you … have an historic opportunity to offer your findings and recommendations to make the postal system a viable, efficient and affordable service to all Americans well into the future."
The nine-member bipartisan commission, created by the Bush administration last December, is charged with identifying the operational, structural and financial challenges facing USPS. It will examine potential solutions and recommend legislative and administrative steps to ensure the long-term viability of postal service in the United States.
Speaking for the administration, Treasury Undersecretary Peter Fisher urged the commission members to "identify a new business model that will create the Postal Service for the 21st century." USPS faces problems similar to many large businesses, said commission co-chairman Harry Pearce. James Johnson is the other co-chair.
Potter told the panel members that while service performance and customer satisfaction are at record levels, USPS is challenged by changes in the marketplace - primarily electronic communication. "The potential significant diversion of letters to electronic medium challenges our basic business model," he said.
In the past year, "we seized the initiative to transform the Postal Service," Potter said, referring to the USPS Transformation Plan and its strategies to improve service and operational efficiency, grow business and enhance the performance-based culture.
"The question now before us, however, is how to define the needs of our customers, the American people, in the decades ahead," Potter said.
Congress and the entire mailing industry have debated a wide range of public policy issues involving the Postal Service - from strict pricing regulation to pricing flexibility, from a stricter monopoly to no monopoly, and others.
In the end, said Potter, "It's about universal service to the American people."
IT'S ON THE WEB
The President's Commission on the U.S. Postal Service has a website at www.treas.gov/offices/domestic-finance/usps.
NEW USPS CD HELPS IMPROVE ADDRESS QUALITY
Responding to input from the Mailing Industry Task Force, the Postal Service made change-of-address information available on a CD-ROM, effective January 1.
"Small- and medium-sized mailers have been looking for an easy, cost-effective way to receive change-of-address information," says USPS Senior Vice President of Intelligent Mail and Address Quality, Charles Bravo, the Postal Service's Task Force representative on address quality, "but most mailers in this group do not have capability to receive electronically transmitted data to update their address files."
"By continuing to improve address quality, there is the potential for significant savings for the Postal Service, and significantly better results for direct mailers," said Charles Morgan, Company Leader of Acxiom, and the industry chairman for the address quality subcommittee of the task force.
To take advantage of the new CD-ROM product, mailers will need to participate in the Address Change Service (ACS) program managed at the Postal Service's National Customer Support Center (NCSC) in Memphis, TN. There is no fee for signing up or participating in ACS. Mailers will pay a reduced fee of 20 cents - rather than the current manual rate of 70 cents - when a change-of-address record is provided through the ACS program. With the CD-ROM product, mailers will be able to view, search and print their change-of-address records for manual update to their address files.
"Programs like this," said Deputy Postmaster General John Nolan, who co-chairs the Mailing Industry Task Force, "are part of our continuing effort to work with the industry to make mail more responsive to customer needs, and to keep the mail channel competitive with our communications channels."
To participate in the ACS program, mailers will need to make a minor change to either their preprinted envelopes or their address block. Take a look at the example of an envelope displaying the newest option allowing the participant code to be printed on the envelope; the same format can also be used on flat size mailpieces. A unique participant code (example #BXBJDCK) will be assigned to each mailer to identify their mail.
Customers who are interested in this new product should request a free Publication 8, Address Change Service, which details all the necessary steps to get started with this service. For this and more information, call the NCSC Address Change Service Department at 800-331-5746.
FASHION FORWARD WITH USPS
Here's a runway hit. Exclusive European fashions delivered directly from France to the United States via the U.S. Postal Service. C'est formidable!
The label is Chantal B, women's wear sold through a network of independent professionals who provide fittings and fashion selections in the privacy of a client's home or office, or who present collections at events such as fundraisers.
"The clothing is imported from France and delivered directly to our affiliates for delivery to their clients," says Katharine Gardner, chief executive officer and president of Chantal B, based near Dallas, TX. "We needed timely delivery to many locations. We also were looking for someone who could offer us savings over the shipping company we had been using."
The Postal Service's Southwest Area sales group teamed up with the Global Package Services group at Headquarters in Washington to offer a solution.
"We already have in place a business model for just this type of international customer," says Jane Dyer, manager of USPS Global Package Services. "The Postal Service's International Business group has built a global network that offers shipping service from locations around the world to the United States, using customs brokers and other business partners."
Chantal B's packages are picked up from the manufacturer in Strasbourg, France, and transported to Charles De Gaulle Airport in Paris by USPS's overseas partner, Lynx Express. After arriving in New York, Barthco International, a logistics company based in Philadelphia, PA, is responsible for clearing the packages through commercial U.S. Customs and presenting them to USPS for distribution and delivery, using Priority Mail.
"Throughout the entire process, USPS is in frequent contact with the Chantal B team, both in Strasbourg and Dallas, making sure we understand their requirements and keeping them updated on the status of their products," says USPS Southwest Area Sales Specialist Rick Routt.
Not only does Chantal B clothing get timely delivery, the company has saved 35 percent in shipping costs by switching to USPS, says Gardner. "We are especially pleased with the customer service we are getting from the Postal Service and its international team," she says. "It's nice to know that when we have an issue, the Postal Service is responsive. It shows they care about keeping us as a customer."
You don't have to be in fashion to recognize a good fit when you see it.
For more information on
Global Package Services, call
703-292-3624.
INFO @ USPS
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POSTAL NEWS BRIEFS
CUSTOMER PRIVACY PROTECTION
To increase the privacy protections it offers customers, the U.S. Postal Service has completely revised its customer-related Privacy Act systems of records. The Privacy Act requires agencies to publish notices which describe privacy practices and safeguards for programs and systems containing personal information. A notice describing the new customer systems was published in the December 16, 2002, issue of the Federal Register.
The new systems are designed to provide customers with a comprehensive view of Postal Service privacy and data management practices, according to Zoe Strickland, USPS chief privacy officer. The new systems have been updated for accuracy, clarity, inclusion of more programs and all customers, more standardized data practices and incorporation of trends in marketing, and privacy. The systems are also organized into more useful categories and are easier to read.
"It was a year-long process that illustrates the high standards for privacy the Postal Service sets for its customers," said Strickland.
If you have questions regarding the Privacy Act revised systems of records, e-mail Privacy@email.usps.gov.
COST-CUTTING REDUCES SHORTFALL
Despite a significant decline in mail volume during Fiscal Year (FY) 2002, the U.S. Postal Service was able to cut a budgeted loss of $1.35 billion in half to $676 million. Postmaster General John E. Potter attributed the Postal Service's aggressive program to hold the line on expenses.
Chief Financial Officer and Executive Vice President Richard Strasser noted that USPS achieved cost reductions totaling $1.45 billion during the fiscal year. Total expenses were held to $67.4 billion, which was $185 million below FY 2001 expenses.
"This aggressive expense management came despite the fact that our delivery network grew by 1.77 million addresses," Strasser said. "Total revenues for the year came to $66.7 billion, an increase of $819 million over 2001. This is primarily attributable to the settlement of the postal rate case and the early implementation of the new rates."
RETIREMENT LEGISLATION COULD HOLD RATES STEADY
Postmaster General John E. Potter says legislation is needed to change the amount the Postal Service pays into the Civil Service Retirement System (CSRS) or ratepayers will be overpaying into the fund by $71 billion. With legislative change, rates could remain stable until at least 2006.
The Civil Service Retirement System Funding Reform Act was drafted by the administration to correct USPS funding of its CSRS obligations. Recently, the Office of Personnel Management (OPM) completed a review of USPS pension obligations for employees covered under CSRS. OPM concluded USPS would be overpaying into the system if it were to continue payments on the current schedule.
If enacted, the legislation would reduce the Postal Service's annual payments to the CSRS fund by some $2.9 billion in 2003.
"The combination of management's efforts to improve productivity, coupled with a change in pension legislation, could enable us to hold rates stable until at least 2006," Potter says. A change would also result in debt reduction by USPS.
MAKE PLANS FOR NPF
The presidential commission on the Postal Service, mail security, postal transformation, USPS rates and services and industry leadership will be on the agenda when mailers gather in New Orleans for the next National Postal Forum (NPF).
The NPF, scheduled for April 13-15, provides business mailers with ongoing training and education in everything related to mail, and helps industry professionals keep pace with new developments in the industry.
In addition to addresses by the Postmaster General and other postal officials, the NPF offers dozens of educational workshops led by USPS and industry experts.
For more information, go to www.npf.org.

Volume 38 Number 1
Ilze Sella, Editorial Services
Frank Papandrea, Art Director
David Ostroff, Designer
Alan Valsi, Purchasing Specialist
John E. Potter, Postmaster General and CEO
Azeezaly S. Jaffer, Vice President, Public Affairs and Communications
MEMO TO MAILERS is published by U.S. Postal Service Public Affairs and Communications.
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HATS OFF TO CAPS; BREAKING THE BILLION-DOLLAR BARRIER
Reaching the billion mark is a significant event, whether you're counting hamburgers sold or payments from business mailers. The Postal Service's Centralized Account Processing System (CAPS) achieved this major milestone during postal accounting period (AP) 2, which ran Oct. 5 through Nov. 1. For the first time, CAPS recorded more than a billion dollars of payment activity in a single AP. This highlights the need of Postal Service customers for flexible postage payment solutions - and highlights the important role PostalOne! will play in meeting that need. CAPS is an electronic postage payment system that provides business mailers with a centralized, convenient and cost-effective way to make postage payments. The system provides electronic payment alternatives for customers and eliminates the need for them to pay in person at each local post office using traditional checks or cash. In addition, the customer's national CAPS account can be used to pay for mailings at multiple locations, thereby eliminating the need for maintaining trust accounts at numerous local post offices.
CAPS can be used to pay postage for the following account types: Permit Imprint, Business Reply Mail (BRM), Merchandise Return Service (MRS), Postage Due, Express Mail Corporate Account and Address Element Correction. (The availability of CAPS for BRM, MRS and Postage Due is currently limited.)
PostalOne! will consolidate and integrate the CAPS functionality that customers currently enjoy. The new PostalOne! system will offer even greater convenience by enabling customers to have a single point of access and log-in to view more of their mailing information. By leveraging the development of PostalOne! the Postal Service will be able to expand these electronic payment options to an even greater number of customers.
The current plan is to transition CAPS customers and system functionality by consolidating and integrating CAPS into the PostalOne! environment during calendar year 2003. PostalOne! will enhance and expand these electronic payment options to meet the ease of use and more flexible payment option needs identified by the Mailing Industry Task Force.
Organizationally, the program is managed within the Marketing Technology and Channel Management group led by Michele Denny with Larry Goodman, manager, Business Customer Support Systems, having direct program responsibility.
Visit http://caps.usps.gov for more information about CAPS.