Why Cluster Box Only Mail Delivery Won't Save USPS Money

Your Junk Mail Is USPS' Cash Cow

Clusterboxes
Cluster Mailboxes Could Actually Hurt Postal Service’s Bottom Line. Stephanie Kennedy/Getty Images

Changing its story since 2011, the U.S. Postal Service office of inspector general (OIG) now says dropping door-to-door mail delivery in favor of neighborhood cluster box delivery might actually cost the Postal Service more money than it would save.

 

In 2011, the same Postal OIG reported that eliminating door-to-door mail delivery in favor of curbside or cluster box service could save the financially floundering USPS $5.1 billion a year.

What changed the OIG’s prediction was a survey of the Postal Service’s last good customers – direct mail advertisers – showing they might stop mailing their offers if front door delivery goes away.

That would hurt – a lot -- because postage for advertising mailed to homes accounted for 23% ($6.3 billion) of the Postal Service’s total $28.2 billion in product revenue in 2013.

According to a consultant hired by the OIG, the volume of First-Class mail will continue to decline significantly by 2020. “This inexorable change will force the Postal Service to rely increasingly on other products, including advertising mail, as well as cost-cutting to fund its operations.”

In other words, your “junk mail” is becoming one of the Postal Service’s last cash cows.

In its latest report titled Modes of Delivery and Customer Engagement with Advertising Mail, the Postal OIG concluded that the potential loss of advertising mailing revenue would only make the USPS’ already desperate financial woes even worse.

Why would advertisers stop mailing their offers if the Postal Service were to replace front door delivery with cluster box service?

Because according to the OIG, people who get mail at their front door are more likely to actually read and maybe even respond to advertisements than those who get their mail at cluster boxes.

“Door delivery customers report higher levels of engagement with advertising mail than those who receive their mail through a curb or neighborhood cluster box,” stated the report.

In a survey of 5,000 households commissioned by the Postal OIG, 10.6% of respondents with front door mail delivery said the read and responded to credit card advertisements, compared to only 3.1% of respondents served by cluster mailboxes.

Survey results for other types of mailed advertisements were “qualitatively similar to the credit card solicitation results, albeit with less dramatic differences by mode,” the report stated.

Perhaps just as significantly, 63.3% of the survey respondents with front door delivery said they would be “displeased” or “very displeased” if they were switched to cluster boxes, compared to only 17.2% who said they would be either “somewhat pleased” or “very pleased.”

“We suggest that the Postal Service work closely with advertising mailers to better understand customer attitudes, their underlying causes, and any detrimental impacts on mail demand,” said the OIG’s report.

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Your Citation
Longley, Robert. "Why Cluster Box Only Mail Delivery Won't Save USPS Money." ThoughtCo, May. 17, 2016, thoughtco.com/cluster-box-mail-delivery-wont-save-money-3321267. Longley, Robert. (2016, May 17). Why Cluster Box Only Mail Delivery Won't Save USPS Money. Retrieved from https://www.thoughtco.com/cluster-box-mail-delivery-wont-save-money-3321267 Longley, Robert. "Why Cluster Box Only Mail Delivery Won't Save USPS Money." ThoughtCo. https://www.thoughtco.com/cluster-box-mail-delivery-wont-save-money-3321267 (accessed November 17, 2017).