The 21st Century U.S. Postal Service has not yet arrived

Managing complex print and mail projects was something I did for nearly thirty years. A large aspect of those thirty years was spent figuring out how to minimize the cost of postal mail. On a project-by-project basis postage often was more than half of the entire print production and mailing expense.

This past Monday’s article in the New York Times was more about Fedex and UPS than it was the U.S. Postal Service (USPS). This is the same Postal Service – by far the largest on the planet, which continues to lose money, (more due to pension obligations than operating revenue) yet attempts to make it up in volume. The more recent focus of the USPS is delivery of packages and it’s about time.

If you haven’t noticed the USPS has been delivering packages on Sundays for quite a while. Clearly the delivery of packages is the only viable future for the USPS. Currently First Class mail contributes less than 50% of the revenue for the USPS. Yet even as recently as 2015 the USPS delivered 47% of all the mail in the WORLD. Advertising mail and periodicals combined with delivering packages directly for clients as well as other shipping services (Fedex, UPS, and DHL for example) already provide the lion’s share of revenue. That trend is just continuing and the percentage of first class mail versus other mail will continue its decline.

Several years ago (as the article states) the USPS attempted to forgo the delivery of Saturday mail. Outrage followed – primarily from advertising and periodical mailers. And the whole idea was scrapped. It’s time to reconsider that now. Would mailers be ok with NOT delivering on Saturday at all? Or might they pay a premium to be delivered ON Saturday when more people are home?

Why are things being done the way they were twenty years ago or fifty years ago or…? The Pony Express was a really long time ago. So were the 1990’s.  It can’t all be bureaucracy right? Does the recipient really care if they get their mailed statement, invoice or monthly bill on Monday instead of the prior Saturday? If it’s important to the mailer then the mailer can pay for that specificity.

How about paid fast lanes for delivering faster? For the USPS while that already exists (think Express Mail and Priority Mail), when it comes to the U.S. Postal Service ‘Net Neutrality’ has no meaning. Or does it? Should it? Advertising mailers have had the ability to pay for faster service (first class mail or overnight service from Fedex and UPS), but the costs of acquiring customers via first class mail has never been a successful mass marketing technique. The weight and dimensions of packages and other mail pieces have always impacted costs. There’s no expectation that the USPS should deliver a heavy package at the same cost as a lighter one. Data streams are about speed and volume not weight.

Given its history as a civil service workplace (there are nearly 7 million USPS employees), the USPS HAS modernized its services and practices to more effectively process the way mail is used today. Yet most of the moves are reactionary and ultimately protective of the status quo. I doubt Jeff Bezos or Elon Musk would design today’s USPS in such a way that people would recognize it compared to what currently exists.

It’s long past the time for USPS to get out from under the oppression of the pension obligation that has stifled its ability to change. I feel there’s a viable future for the

USPS if the focus is on doing what the USPS does that nobody else does every day – Deliver to each and every household and business.

At least as long as there’s mail to deliver

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CVS/Aetna deal – would it be better for overall patient health?

What apparently started as a defensive maneuver against the portent of Amazon.com entering the health and wellness marketplace is now to be ruled upon as to whether or not the purchase of Aetna by CVS is anti-competitive and will be quashed by anti-trust regulators. But before evaluating the fairness aspect of this proposed sale, is there any chance CVS/Aetna could be a net positive for the health of many Americans? Today’s article in The New York Times noted that the deal could reshape the health industry.

In attempting to imagine the future of health care I frequently think about things like telemedicine having the potential to dramatically improve the patient experience AND results. Telemedicine is only in its nascent stage, but its adoption and growth will be key factors in delivering better care at lower costs. Simply stated, it has to and will be part of the future of the delivery of patient care. For what it’s worth I feel the next health frontier is a subcutaneous implanted chip that will record and provide data regarding changes in your moment-to-moment health condition. That future world will have no more Fitbits or portable trackers that you wear. The tracker of the future is implanted under your skin.

At the same time when I think of the multitude of CVS locations (nearly 10,000) and the utility of being quite close to where many people live (in a 2016 report 76% of Americans live within five miles of a CVS location), a CVS/Aetna merger has the potential to create a very different relationship between the patient, health insurer, and point of care delivery.

Keep in mind that Americans are living longer and there are more and more people living actively (and not so actively) beyond age 70 each year. The relationship between baby boomers and those even older and their doctors and insurance companies has been in a constant state of flux for more than thirty years. What I think is important to keep in mind is that people over 50 are accustomed to going to SEE the doctor and won’t nearly be as good candidates for telemedicine as Gen Xers and all those younger than them. Yes it’s about technology to a degree but more about behavior and what’s comfortable and understandable. I admit that not everyone will be as willing and interested as am I about new technologies as they apply to our health.

Most Americans know where the local CVS is located. That CVS and Walgreens are principally responsible for the demise of locally owned pharmacies is both true and well documented, but the horse is long out of that barn and things are not going to back to the kindly old pharmacist who knows you and your entire family’s health history.

Having doctors on the premises at the pharmacy is a bigger deal than one might think at first. Saving a trip, making things more convenient AND delivering professional care for patients is a smart idea and could revolutionize care and in particular elder care in the United States.

Should it be approved, I am concerned that I am being naïve to ignore that without sufficient competition the CVS/Aetna combination will ultimately be able to charge whatever it wants and be less motivated to provide high quality service. But as yet I am not willing to throw the baby out with the bath water and I am truly interested in the deeper exploration of how the combination of CVS and Aetna might be beneficial to the health of Americans.

 

 

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Set Phasers to Stun

I didn’t watch the original run of Star Trek with William Shatner, Leonard Nimoy and crew, as I was just a bit too young. But in those days there were plenty of reruns and I watched each and every episode. Like so many people, it was clear that while the show was a bit campy, silly, and preachy, creator Gene Roddenberry was presenting his preferred vision of the future. While the characters were multi-racial and multi-ethnic (not to mention what Earthlings would call aliens in the crew), there was a decidedly American viewpoint to the entire series. See above for campy, silly and preachy.

The world of Star Trek was set in the year 2364 “and beyond”. The series depictions included a universe that was both at times beautiful and terrible. One of the things that always struck me as interesting was the choice that Captain Kirk made frequently to have his crew “Set Phasers to Stun” as opposed to kill. The characters had the choice to disobey but as far as I recall that NEVER happened. Talk about restraint!

What I also found interesting was that humans that were ‘stunned’ by Star Trek Phasers (yes I always wanted one of my own), never came back for vengeance against he (or she) who ‘stunned’ them. Clearly Mr. Roddenberry had a thing for creative license. And a more genteel future than what was going on in 1966 when the series was made. There was a whole lot of moralizing going on in Star Trek. And I loved it.

The year 2364 is 347 years from now. Putting on the rose-colored glasses for a moment, wouldn’t it be great to live in a world where people could defend themselves and immobilize personal threats, without ending someone else’s life? Unrealistic you say? Vengeance is a very strong emotion and restraint (in general) is something we human beings struggle with every day.

It disturbs me to think that somehow 347 years from now people will have available to them more powerful and capable weapons to carry around under the auspice of protecting themselves. Vaporizers are so clean and efficient. Aim, fire and poof – the threat is removed. No mess, no fuss. Impossible?

Could that really be our future?

 

 

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Why it’s more important now than ever to help build trust between U.S. and Chinese businesses

It’s not only because the leaders of the two countries are promoting Nationalist agendas. In the 3 years since I last visited China, Chinese President Xi Jinping has consolidated his power, which was further enhanced by his actions at the recent CCP Five Year Conference. Prior to Mr. Xi’s ascension there were indications of greater understanding between the United States and Chinese citizens. I don’t think that the citizens of both countries are more distrustful of one another. The same cannot be said of the two governments.

One cannot ignore that China is not only one of the oldest nations but also the most populated with something close to 1.4 billion people. I’d welcome the chance to return and see the people I have met and spent time with in China. I think they are not very different today from when I last saw them. Since currently the U.S and Chinese governments are less closely aligned, building cross-cultural trust and understanding through doing business between Americans and Chinese is probably just more difficult but also more important.

Chinese culture is still vastly different from U.S. culture. I am completely in favor of people interacting with one another in order to foster a better overall understanding. Doing business is one way to learn the ins and outs of another culture. Having traveled to China nearly a dozen times I’ve not seen enough of the country to form an opinion outside of the major cities I’ve visited. While some generalizations can be made for an American in doing business with Chinese, it’s important to judge each relationship on its own merit. That too can be more difficult to do than it is to say after you’ve consumed your 15th cup of tea of the day.

Our team has worked with a few Chinese companies over the years All the engagements were interesting in their own right and I think both sides learned in the process. None of the engagements were perfect. None were disasters. So why do I want to keep trying? After all there are not legions of Chinese companies looking to do business in the United States. But there are some with more to surely follow and I want to be there to help those that need a partner to represent their vision here in the U.S.

At the government level, trust between the U.S. and China is in scarce supply these days. There are reasons for this on both sides of the equation. I feel that citizens of one nation should not be lumped together in terms of behaving toward citizens of another nation on the basis of how their governments interact.

Learn, talk, do business, repeat the process. That’s how trust can be gained between Chinese and U.S. business partners.

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A lack of marketing is not helping digital editions

I ride a train to and from New York City most of the days of the month. It takes over an hour on the train itself. I make an effort to pass the time reading all sorts of things. I read newspapers in the morning, magazines and books on the way home. These days I read most everything on my iPad Mini. Actually I’ve used just about every tablet there is starting with the Amazon Original Kindle, to the Kindle Fire to a Samsung Galaxy Tab and more recently the iPad.

I thought about it this morning when I had a physical copies of two printed newspapers and went back in time folding and reading it in the special ways I learned having read newspapers riding crowded NYC subway cars for many years. Digital editions of newspapers are SO much better than the printed version. So why don’t publishers (and tablet manufacturers) promote the incredible utility and enhanced experience of reading content on a tablet?

It’s not that long ago that what was available in terms of a printed newspaper was outdated by the time you opened it, transferred printing ink all over your fingers (printing methods did improve and that problem mostly has gone away), and left out news that you may have heard about but occurred too late to be included in the printed edition.

Don’t mistake my championing digital editions as hating on newspapers. I wrote about the love I have for the Sunday New York Times. But on the train the actual printed paper, – well let’s just say it’s not user friendly.   Newspapers in general have been slow to figure out how to incorporate digital subscriptions and advertising into their businesses. However digital editions for The New York Times showed the growth of digital subscriptions. Digital revenues continue to rise and I’ve accepted that both the Times and Wall Street Journal will eventually cease to print a daily paper. Another interesting and well written article in FIPP https://www.fipp.com/news/opinion/are-digital-editions-dead offered its own view.

Nostalgic people will lament the end of a long era with the printed newspaper. Frankly I am surprised it has taken this long. The lack of marketing the advantages of digital editions has contributed to the slower adoption of tablet reading. Have you EVER seen anything that promotes reading on a tablet? There are plenty of promotions for Amazon and Netflix shows and subscriptions for a tablet.

In the recent past it might be said that it’s obvious that since newspapers (and magazines to a degree) still make more money from the printed editions than they do digital, why would they make the ‘sacrifice’? It turned out to be one word. Survival.

Yet publishers continue to eschew marketing the attributes of digital publications. It’s hard to believe that there aren’t more cooperative opportunities between say Amazon and various publishers. Or Apple. Or Samsung. Or Google. Or Microsoft.

The daily printed edition is nearing the end of its useful life. It’s a slow, sometimes painful death but doesn’t mean printed editions will go away. There will just be fewer of them and they will be more expensive. But you knew that already. Why don’t publishers do more to acknowledge this?

 

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Restaurants and dynamic pricing

Most people are quite familiar with the concept of dynamic pricing.  If you’ve ever bought a plane ticket or rented a car you know exactly the meaning of dynamic pricing, more demand, the higher the price, lower demand, a lower price. Sports teams have also embraced dynamic pricing by charging more for ‘premium games’ against top competition and for games played on the most popular days of the week.  Monday would not be one of those days for all but NFL football.  Broadway shows also engage in dynamic pricing for a good reason – they often have the data to help drive their pricing decisions.  

So why in general haven’t restaurants adopted dynamic pricing?  There are a number of possible reasons.  

  • Data is not available to accurately track and predict traffic.  Mom and Pop restaurants in particular.
  • Margins are so small already for most that offering a lower price simply eats up profit .
  • A few restaurants are so busy already there’s no need to consider this type of marketing.
  • The concept of lose money but make it up in volume is tricky at best.

‘Happy Hours’ are a type of dynamic pricing.  The idea of being able to drive business in slower times in the afternoon and late nights has been around for a long time.  My guess is that most restaurants continue to use ‘Happy Hour’ marketing is that they have a feeling that it is working.  But they don’t really know.  

‘Early Bird’ specials (in some places still known as ‘Blue Plate’ specials) are another form of restaurant marketing.  It makes sense in theory.  Restaurants can be successful through an:

  • Increase in customers paying checks.  i.e. fannies in the seats
  • Higher average check per customer
  • Increase in visits per individual customer
  • Increase in higher margin items

Are people really ready for a sandwich to cost less at 3PM than it does at Noon? It may seem obvious but A Forbes Magazine article from earlier this year offered this about dynamic pricing in general not limited to restaurants:

Despite these practices, the use of dynamic pricing appears to be on the decline overall. In RSR’s survey, in 2016, 28% of respondents saw dynamic pricing as an opportunity to drive margin, but in 2017 that number fell to 22%.

What gives? Well, one explanation is that consumers don’t seem to much care for it. We floated a small consumer survey alongside our pricing research, and we found that 71% of U.S. consumers surveyed didn’t like the practice, and another 23% thought it was merely “okay.”

So apparently consumers do not like dynamic pricing or at least are not yet ready for it.  Enter Big Data to the picture and, at the very least, there will be empirical data points to drive decisions.  

 

 

Another chart I found from the Forbes article:

 

 

 

 

 

Even with that small group’s enthusiasm, a majority of younger millennials still don’t care for the practice – 61% don’t like it, and almost half of those actually hate it. Older generations are even more against the practice, with 80% of Boomers showing no enthusiasm for it.

Given the way millennials tend to view other pricing practices, like an enthusiasm for deals well beyond other generations, it may be that millennials are just confident in their ability to game retailers’ dynamic pricing practices. They tend to be more tech-savvy and more willing to devote time to scouring the internet for the best prices, so they may approach dynamic pricing more informed about whether a price drop is worth acting on or not, and with more of a sense of whether their behavior or the actions of other retailers might trigger a price drop at another retailer as well.

Gaming retail dynamic pricing practices may be ok to millennials but it does seem like an awful lot of work.  

The restaurant industry in the U.S. has been in part responsible for the job recovery as people’s habits have changed and we eat out more than we ever have before.  At the same time it’s never been more challenging to be in the restaurant industry particularly if the restaurant is not part of a larger group that offers economies and efficiencies of scale.  Restaurants will always be looking to reduce costs while maintaining what they consider to be their raison d’etre offering either good food at low prices, luxury/high class dining experience, or a hot scene.  Serve yourself restaurants are also a way to reduce labor costs but still deliver a premium food experience at a lower cost.  

I don’t know that I am ready for true dynamic restaurant pricing but I do expect more restaurants now that they have more data to give it a try.  

An article from Neil Irwin of the NY Times this past Sunday delved into the practices of surge and dynamic pricing.  

What do you think about dynamic pricing for restaurants?

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To protest is something to champion

Boomers got to where they are today in their own unique way. From reciting the Pledge of Allegiance each morning in school, to singing My country Tis of Thee also in school, to watching Superman reruns starring George Reeves where the Man of Steel fought for ‘Truth, Justice, and the American Way’, we all had reason to believe that the U.S. and the Allies having recently won (from the perspective of the mid 1960’s) WWII, was inexorably on the side doing the right thing. Yet fear of the Red Menace was alive and well in the 1960’s and 1970’s and as any Boomer can tell you, doing drills where you had to get underneath your desk in the classroom, and signs for Fallout Shelters were unnerving to say the least.

The Korean War ended in 1953. I was a kid in the 1960’s and the TV show M*A*S*H* (an outgrowth of the protests and dissension of the 1960’s) in the 1970’s did not paint a pretty picture. The show was about doctors in a mobile hospital (that never moved) during the Korean War. But I am betting that many people like me were not sure if the U.S. won or lost. Bill Murray’s character in the 1980 movie Stripes has a line where he notes that the U.S. was 10-1-1 in wars. This was five years after the end of the Vietnam War and while I had little trouble figuring out which was the tie and which was the loss, it still was a pretty impressive record. Our parents came from the ‘Greatest generation’ and I guess the perception was that the U.S. was ‘undefeated’. Talk about a high perch to maintain!

The protests of the 1960’s are often thought of as the dawning of an awareness that not everything the U.S. did was right or ‘worked out’. Then, like today, protests were seen by many as being disrespectful to those that serve in our country’s military.   It was as if questioning policy, motives or actions of the government of a free country should never occur. Of course nobody actually feels it should never occur since that’s un-American. But the misguided notion that protesting by kneeling or sitting during the playing of our national anthem disrespects our servicemen and servicewomen is creating unneeded strife in the United States. Social media has not helped here since before social media you’d never read something publicly from a ‘friend’ that would cause you to form a different and negative opinion of that person. Civility would hold when meeting in person and even if there was a difference of opinion that was not tantamount to ending the relationship or friendship. Sadly that appears not to be the case today. Social media is clearly a megaphone for people to have their voices be heard.

I want to live in a country where it’s not only acceptable, but there’s encouragement for people to have their voices heard whether I agree with those voices or not. In the Vietnam War there were ‘conscientious objectors’ – like Muhammad Ali. Many of them paid a dear price for refusing to serve being arrested and jailed. Others moved out of the country. But there were also many who despite maybe having deep reservations about America’s involvement in Southeast Asia, served their country anyway. I did receive a draft number in the late 1970’s but by that time the U.S. had exited Vietnam and it never went beyond receiving the number. I thought at the time and still do that had I been drafted I would have served my country even if I disagreed with the reasons for our being there. I am watching Ken Burns’ Vietnam on PBS and it brings back so many memories about the way I felt at the time.

People that serve AND who put their lives on the line every day be it military service, law enforcement or other services that are in place to protect the public, are to be admired and appreciated – particularly by civilians. Among the many things these brave people are protecting are the rights of all Americans to be heard in whatever form of legal expression is in place. That’s something to fight for and something that I personally champion and will continue to champion.

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