When postmaster general William Henderson told the Magazine Publishers of America (MPA) in October 1999 that the next postal rate hike for periodicals would be only a single digit percentage, the industry was pretty pleased.
When postmaster general William Henderson told the Magazine Publishers of America (MPA) in October 1999 that the next postal rate hike for periodicals would be only a single digit percentage, the industry was pretty pleased.
Imagine its surprise, then, when the US Postal Service, in a January 2000 formal request for rate increases, said it needed the postage for magazine delivery to go up by an average of 15%. Such a rise in rates would cost the industry dollars 300,000 million over the next two years, according to the MPA.
The magazine industry felt as though it had been hoodwinked. It was especially miffed because it had worked with the Postal Service to identify dollars 150 million in annual cost savings through automation, better staffing and other means.
The MPA was determined to convince the USPS to stick to its promise of a single-digit rise. To that end, it hired PR agency Dittus Communications and lobbying firm Preston Gates Ellis & Rouvelas Meeds.
Strategy
The rates for all classes are set by the independent Postal Rate Commission (PRC) via a dated process called a 'postal rate case,' which can take up to 10 months to complete. The MPA needed to influence those who influence the Postal Service: the media and members of Congress. The campaign would involve media relations, issues advertising and lobbying. The message was straightforward: the 15% rise was unfair because it was three times the rate of inflation and twice the average rate for all postal classes, and because the industry had worked with the USPS to identify cost savings in magazine delivery.
But the effort proved to have some sensitivities. The MPA would be negotiating with the USPS throughout the PR campaign and did not want to alienate it. In particular, according to MPA's EVP for government affairs Jim Cregan, the group decided not to place op-eds and other pieces in the home districts of key Congress members for fear of being accused of 'whipping up' stories against the Postal Service.
'This might have given them an excuse to walk from the table,' Cregan says.
Tactics
Dittus contacted more than 500 reporters, including those who cover politics, government, the magazine industry and postal issues. Dittus and the MPA held briefings with The Washington Post, Roll Call, MSNBC and 20/20.
A luncheon with the Editorial Information Network, a Web service for columnists, netted an op-ed in the group's newsletter. MPA president Nina Link also wrote an op-ed in Advertising Age. Dittus designed five ads, which appeared in the National Journal, Roll Call and The Weekly Standard.
Meanwhile, Preston Gates handled the lobbying.
'I'd say we got terrific support from both sides of the aisle and both sides of the Hill,' says Preston Gates partner Bruce Heiman. 'I think the Postal Service realized that a great number of very influential members of Congress cared about this issue.'
Slowly, the Postal Service began to admit that such a high rate might not be necessary.
'In the final stages of the case, the Postal Service came forward and said, 'We've changed our mind and we have this new evidence of cost savings - only single digits are justified,'' says Cregan.
Says USPS spokesperson Gerry Kreienkamp: 'We were able to recalculate the cost with increased productivity, so it was lower. We understood (the MPA's) position and tried to work with them as best as we could to try to adjust things.'
Results
The PRC announced the approved rates on November 13. The average rate increase for the magazine industry was 9.9%, just squeaking into the single digits. (The PRC raised a first-class stamp by a penny.) The rates, which need to be approved by the USPS's board of governors, are expected to go into effect in January.
Future
From the beginning, the MPA planned a three-year campaign, with the battle against the 15% hike as phase one. The MPA, Dittus and Preston Gates will continue to press for postal reform. 'We don't want this to ever happen again,' says Cregan.
