11

National Target Marketing

Coalition (NTMC) Conference

Houston, TX

Tom Foti

Manager, Marketing Mail

February 9, 2011

USPS Strategies for Growth

22

Agenda

USPS Organizational Update

USPS Business Strategies

Mail Growth Initiatives

Working Together

33

USPS Organizational Update

44

USPS Organizational Update - Challenges

Economic recovery slow

FCM trends

Increased competition

Cost containment

Legislative hurdles

55

USPS Business Strategies

Strengthen the business to consumer channel

Improve the customer experience

Compete for package business

Become a leaner, faster and smarter organization

66

USPS Business Strategies – Revenue Strategies

Retain Existing Business

Create Innovative Mailing Service Products

Expand Access

Grow Packages

77

FCM & Standard Volume

50

75

100

125

2005 2006 2007 2008 2009 2010

Volu

me

(B)

StandardStandard

FCMFCM

88

Mail Growth Strategies

Customer and segment focused solutions

Reduce Complexity

Leverage pricing and incentives

Create new innovative profitable products

99

Mail Growth Strategies – Customer Focused Solutions

Product and pricing for specific customer or customer segments

• Customer needs

• Market dynamics and competitive pressures

• Total value of customer

• Revenue opportunity

Example : Targeted incentives and recently proposed Discover NSA

1010

Mail Growth Strategies – – Reduce ComplexityReduce Complexity

Simplify product offerings

Improve ease-of-use

Maintain targeted product and pricing

Example : Expansion of simplified addressing option

1111

Mail Growth Strategies- Leverage Pricing and Incentives

Create flexible pricing solutions

• Market driven

• Customer friendly

• Quick-to-market

• Consistent with USPS capabilities

1212

Mail Growth Strategies- Leverage Pricing and Incentives

Recent/Current Pricing Initiatives

• Saturation Mail Incentive - May ’09 - May ’10

• Summer Sale – 2009

• First Class Mail Incentive – 2009

• Summer Sale – 2010

• Saturation / High Density Incentive - Jan ’10 - Jan ’11

• Reply Rides Free - Jan ’10 - Jan ’11

1313

Mail Growth Strategies – New Innovative Profitable Products

Leverage technology solutions

Integrate with communication channels

Leverage USPS Assets

1414

Mail Growth Strategies – TMC Market Focus Understand industry dynamics

• Competitive pressures

• Cost pressures

• Changing advertising landscape

Keep existing TMC customers and volume Win back lost TMC volume Foster open communications Develop product/pricing solutions that make a difference

1515

Tom Foti

thomas.j.foti@usps.gov

Tom Foti

thomas.j.foti@usps.gov