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I. Generate Revenue

The Postal Service's strategic goal for revenue is to increase mail volume and revenue sufficient to cover the cost of universal service to an ever-expanding delivery network. A record $72.8 billion was achieved in total revenue in 2006, exceeding plan by $477 million. Record-breaking mail volume of 213 billion pieces was also reported, increasing 1.4 billion pieces from last year. Despite a planned decline in First-Class Mail, overall performance remained positive due to successful sales approaches in the commercial market, outreach efforts with households and small businesses, and product enhancements. Overall, growth in Standard and Priority Mail volume was the key driver in exceeding the 2006 revenue plan.

2006 Revenue and Volume Growth

	2006 Revenue ($ millions)	% Change	2006 Volume (millions)	% Change
First-Class Mail	37,039	+2.7	97,617	-0.5
Standard	19,877	+4.9	102,460	+1.5
Priority Mail	5,042	+8.8	924	+4.1
Package Services	2,259	+2.6	1,175	+0.8
Express Mail	918	+5.3	56	+0.9
Total*	72,817	+4.0	213,138	+0.1
*Total for all products and services, including Periodicals, International, Special Services, and Other Revenue.

A decline of 2.8 percent in First-Class Mail volume is forecast for 2007, the expected result of Internet competition and a planned rate increase. Opportunity for growth exists in multiple product categories. No delivery company is as effective at connecting business with American homes as the Postal Service. With its unique ability to deliver customized messages to select audiences and produce measurable results, mail is positioned to grow even as new forms of media emerge. Today more and more customers use mail as an integral part of multi-channel efforts that combine the Internet with other media. Priority Mail and Package Services continue to add convenient new features in tandem with the growth of online retailing and gain new customers among small businesses who require affordable local shipping solutions.

The revenue generation strategies in the Plan are unchanged: The Postal Service will keep businesses and households "in the mail" by improving the utility and performance of its core services, and continuing to build awareness of the value of mail in meeting customer needs.

1. Create Customer Value with Products and Services
The Postal Service's revenue strategies are grounded in a commitment to strengthen core products by adding value in ways that make a difference to customers. There were several product initiatives introduced or expanded in 2006, especially for small businesses. Each was designed to make the mail even more useful, convenient, and accessible.

Priority Mail Flat-Rate Boxes and Envelopes
Customers are responding to the added convenience of flat-rate pricing with two available box shapes and an envelope with no surcharges, weight restrictions, or zone pricing. The Priority Mail Flat-Rate Box boosted revenue performance by providing customers with a quick, easy, and convenient way to mail. Customers get the core benefits of Priority Mail including nationwide 2–3 day delivery, free packaging, free Carrier Pickup, Saturday delivery, and, when purchased online, electronic delivery confirmation at no additional cost. Industry research indicates that convenience, reliability, and a good price are key considerations in choosing a shipper. The Priority Mail Flat-Rate products hit the mark in all of these areas.