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USPS OIG — Issue Brief: Letter Carriers: Modern Day Milkmen?

March 9, 2015 Comments off

Issue Brief: Letter Carriers: Modern Day Milkmen?
Source: U.S. Postal Service, Office of Inspector General

Highlights

  • The Postal Service and AmazonFresh are jointly experimenting with grocery delivery — a market set to grow in the near future.
  • Because of its extensive fleet, last mile advantage, and reputation for reliability, the Postal Service could be well-placed to play a key role in this space.
  • There may be opportunities to collaborate with other retailers and producers, create an online shopping mall, or capture different areas of the value chain.
  • The Postal Service needs to continue to experiment now with different strategies if it wants to be an effective player in this growing market, as the number of new entrants is quickly growing.

USPS OIG — What Postal Services Do People Value the Most? A Quantitative Survey of the Postal Universal Service Obligation

February 24, 2015 Comments off

What Postal Services Do People Value the Most? A Quantitative Survey of the Postal Universal Service Obligation
Source: U.S. Postal Service, Office of Inspector General

The OIG has conducted a nationally representative quantitative survey on the relative value of some key services provided as part of the universal service obligation (USO). This study is the first of its kind in the United States and was done in conjunction with the market research firm Gallup and Professor Michael Bradley of George Washington University’s Department of Economics. The study, What Postal Services Do People Value the Most?, focused on four attributes of the USO: mode of delivery, access to postal services, frequency of delivery, and price. This study is a follow-up to our white paper Guiding Principles for a New Universal Service Obligation in which we discuss the need for such a study.

The survey found that both consumers and businesses still value postal services, especially door and/or curb delivery instead of delivery to a cluster box or parcel locker. Respondents also value the ability to access postal services through post offices, rather than using other alternatives such as postal counters in non-postal retail stores and self-service kiosks. In addition, while consumers and businesses are indifferent when it comes to the Saturday delivery of letters, consumers still place value on the Saturday delivery of parcels. Furthermore, consumers and businesses also value lower prices and may be willing to accept lower levels of service to keep prices from rising sharply.

USPS OIG — Window Retail Customer Service: Audit Report

February 12, 2015 Comments off

Window Retail Customer Service: Audit Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

Between FYs 2012 and 2013, an increasing number of customers expressed dissatisfaction with the service they receive at retail facilities. While the Postal Service’s goal is 90 percent customer satisfaction, in FY 2013 more than 20 percent of customers who responded to surveys stated they had been treated “worse than other retailers” at Postal Service retail counters.

Dissatisfied customers exist, in part, because procedures for improving customer service are not functioning as intended. Although management communicates with sales associates periodically via service briefings known as “stand-up” talks and provides video instructions, there is a lack of continual, formal customer service training. Further, sales associates are selected based on seniority rules, rather than suitability for the position, as suggested by best practices. In addition, the Postal Service does not have a mandatory process to ensure managers regularly observe sales associates and provide feedback. Regular observation would help sales associates recognize where they need to improve their performance.

Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail

February 10, 2015 Comments off

Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail
Source: U.S. Postal Service, Office of Inspector General

By now, it’s fairly common knowledge that digital communications has cut into First-Class Mail volumes. But does this necessarily mean people always prefer to communicate digitally? To find out, we looked at the trends and customer preferences for one particular mail segment – transactional mail, which consists primarily of household bills and payments.

We collaborated with the consulting firm InfoTrends to analyze 3 months’ worth of customer billing data from a major U.S. utility. We also jointly interviewed executives who manage bill delivery and payment processing to help determine how the utility’s delivery-and-payment costs and customer preferences compare with those at other utilities and even in other industries.

Our new white paper, Will the Check Be in the Mail? An Examination of Paper and Electronic Transactional Mail, details how we found that despite a clear preference to pay bills online, 91 percent of customers prefer receiving their bills by mail. Even among the utility’s newest customers — those expected to be more digitally savvy — an average of 89 percent opted to have their bills mailed to them, though, like the others, most preferred paying online.

People like having a physical mailpiece as a reminder to pay and as a record-keeping tool. The executives interviewed said this is consistent with what they’ve been seeing and hearing. It’s also consistent with one thing consumers almost everywhere have made clear: they want choices in just about everything, including bill delivery and payment. In addition to being good news for the near-future of transactional mail, our findings suggest that a company offering a variety of bill delivery and payment options can help keep customers happy. And as the executives noted, while costs are always a concern, including billing and payment costs, customer satisfaction is often equally important, if not more.

The Value of the U.S. Postal Service Brand

February 2, 2015 Comments off

The Value of the U.S. Postal Service Brand
Source: U.S. Postal Service, Office of Inspector General

A corporate brand is a mix of tangible and intangible elements, from a company’s name and logo to expectations and attributes that consumers associate with a particular product or service. A certain car manufacturer, for example, may make people think of luxury and reliability. A particular retailer may immediately bring to mind everyday goods at low prices.

The U.S. Postal Service has a corporate brand, too. Its attributes include reliability, convenience, value, and tradition, among other things.

Brand valuation is a management tool increasingly used by successful firms to get the most financial benefit from their brands. But unlike many other businesses and organizations, the Postal Service has never conducted a formal brand valuation, which involves measuring the brand like any other asset and monitoring it over time, using a consistent methodology. The OIG worked with Premier Quantitative Consulting (PQC), experts in brand valuation, to estimate the value of the Postal Service’s brand using an accepted methodology with conservative assumptions.

Our white paper, The Value of the U.S. Postal Service Brand, details the extensive research and analysis as well as PQC’s methodology and model that produced an estimate of the Postal Service’s brand value at $3.6 billion. That is, the Postal Service can expect to realize $3.6 billion in future cash flows as a direct result of its brand. For example, if the U.S. Postal Service were largely unknown to the public, appearing to be just a generic delivery service, the organization would not realize the $3.6 billion in cash flows attributable to the brand over its lifetime, all else being equal.

The PQC white paper asserts that there is still untapped value in the Postal Service brand and suggests ways the Postal Service can enhance some of its brand attributes.

USPS OIG — The “First and Last Mile” Strategy: A Critical Assessment

January 23, 2015 Comments off

The “First and Last Mile” Strategy: A Critical Assessment (PDF)
Source: U.S. Postal Service, Office of Inspector General
From Summary:

As the Postal Service continues to address its difficult financial situation, some have argued that overall efficiency would improve if the Postal Service were to focus exclusively on the first and last mile (collection and delivery). While the introduction of workshare discounts has led to private industry taking over a portion of the middle mile – mail processing and transportation – allowing private industry to take over the entire middle mile warrants close examination. We therefore asked Dr. John Panzar, an expert in postal economics, to look at the economic implications of the Postal Service abandoning the middle mile completely and focusing exclusively on the first and last mile for the letter and flat market.

Dr. Panzar finds that the Postal Service’s mail processing plays a vital role in ensuring the efficiency of the postal sector, even in the absence of economies of scale in mail processing. In other words, Dr. Panzar maintains that if the Postal Service abandons all mail processing and transportation of letters and flats, overall efficiency will decrease. Worse, the Postal Service would experience a loss in profits, and mailers would have to pay higher prices. In fact, the only parties benefiting would be the private providers of mail processing, but their benefit would be less than the combined loss to the Postal Service and mailers.

The parcel market, which is different and requires its own focused attention and stylized model, will be addressed in a future white paper.

Flexibility at Work: Human Resource Strategies to Help the Postal Service

January 15, 2015 Comments off

Flexibility at Work: Human Resource Strategies to Help the Postal Service (PDF)
Source: U.S. Postal Service, Office of Inspector General

Highlights

  • The Postal Service has a strategic need to attract adaptable, committed workers to compete in the future.
  • The OIG conducted primary and secondary research to discover innovative human resources practices in successful organizations.
  • Policies that improve work-life balance can attract committed employees and improve retention. Positive outcomes include a less stressed workforce, better customer service, and increased productivity.
  • The Postal Service is focused on workforce flexibility, using lower paid employees to supplement its career workforce. It should also focus on workplace flexibility policies that improve work-life balance.
  • A strategic partnership between management and the workforce throughout the organization will be needed to move toward a more flexible work culture.
  • Experimentation, feedback from employees, and better workload information and management tools all increase the likelihood that flexibility policies will succeed.
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