First-Class Mail Product Development

First-Class Mail Product Development
MTAC August 23, 2017

Agenda Pulse of the Industry 2017 Promotions update
Pulse Report Updates Open Discussion

Pulse of the Industry

First-Class Volume Total First-Class Mail Volume
Industry Product Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Total First-Class Mail Single-Piece -13.4% -7.8% -1.4% -9.0% -0.4% 0.6% -5.5% -15.1% -11.5% -1.0% -11.1% Presort -5.1% 2.7% -2.3% -5.6% 4.1% -3.9% -1.7% -3.7% -6.7% 0.1% -2.7% Note(s): 1/ Data Source: RPW FY16 – FY17 Proprietary & Confidential

Product Management Product Management Pricing Product Innovation
Brand Marketing Customer Experience Pricing Operations Sales Customer/ Market Insights

Product Management – New Groups
Mailing Shipping Special Services Elke Reuning-Elliott, Director Jay Smith, Director Dale Kennedy, Manager Product Champions Product Management & Support Business Strategies Product P &L s Market Expertise Industry communication 6

Pricing Strategy Most products 2% increase +/- 1%
Use available information to produce best financial outcome Considering public policy and regulatory requirements Maintain key rate relationships for stability and to gauge market response Address workshare discounts over 100% Bring most pass-throughs to or below 100% Justify those pass-throughs that remain over 100%

Pricing Strategy: First-Class Mail
Single Piece Letters – Increase near CPI Flats – Two times the price of SP Letter which allows consumers to apply two stamps Additional Ounces – No change Meter Mail - Maintain 3 cent meter gap for market stability Presort Letters – Solve for remaining cap space Letter Gaps – Presort discounts remain stable Flats – Narrow pass-throughs FCM Retail Parcels – Move to competitive on Sept. 3, 2017 Operational Changes Simplify Postage Statement for FC Residual Removed two lines from Postage Statement Mail on removed lines will be merged and entered on new line at blended rate Changes designed to simply FC Postage Statement and increase ease of use Limit goods in letter & flat shaped items – FCMI, IPA, and ISAL Only documents in letters/flats under new Universal Postal Convention

Mailing Promotions Action item from prior MTAC session (Pulse Report Action Item) Break out First Class volume reporting by Industry Provided first cut at last meeting (RPW & CDM) Issues with combining data sources CDM not designed to capture FCM Single Piece data (10%) MSP data in CDM not easily split by industry, which affects presort volume allocations Discontinue this report

2017 Promotions Calendar Update
United States Postal Service

2017 Mailing Promotions Calendar
Approved 2017 Promotion Calendar 2017 Mailing Promotions Calendar JAN – FEB - MARCH APRIL – MAY - JUNE JULY – AUG - SEPT OCT – NOV - DEC NOV – DEC 2016 As of June 24, 2016 FIRST-CLASS MAIL PRC approved as of June 16, 2016 Earned Value Registration Nov 15 - Dec 31, 2016 Promotion Period (6 months) January 1 – June 30 *registration closes Dec. 31, 2016 Color Transpromo Registration May 15 - Dec 31 Promotion Period (6 months) July 1 – December 31 STANDARD AND FIRST-CLASS MAIL Emerging & Advanced Technology Registration Jan 15 – Aug 31 Promotion Period (6 months) March 1 – August 31 STANDARD MAIL Tactile, Sensory & Interactive Engagement Registration Dec 15 – July 31 Promotion Period (6 months) February 1 – July 31 Direct Mail Starter Registration March 15 – July 31 Promotion Period (3 months) May 1 – July 31 Mobile Shopping Registration June 15 – Dec 31 Promotion Period (5 months) August 1 – December 31)

Complete 2017 Promotions 2017 Earned Value (Pulse Action Item on status) Participants: 729 Final Volume: 1.3B pcs (>250% increase) Credit review/processing underway, 84% completed, <0.2% disputes MUST agree to credits by 9/15, and use them by 12/31 2017 Tactile Sensory & Interactive Promotion Participants: 158 Volume: 1.2B pieces Revenue: $268M 2017 Direct Mail Starter Registered: 40 /Participants: 1 Volume: 11k Revenue: $2K

Open 2017 Promotions 2017 Emerging & Advanced Technology Promotion
Registered 301/Participants – 265 Volume: 4.9B Revenue: $1.1B Data issue affected 7 mailers in the first 5 days of promo; data fix is in approval process, expected completion in 2-3 wks 2017 Color Transpromo (Pulse Action Item: update) Registered: 59 / Participants: 54 Volume: 302M Revenue: $111M 2017 Mobile Shopping Registered: 584 / Participants: 310 Volume: 422M Revenue: $103M >20 companies: Informed Delivery/Mobile Shopping campaigns

Pulse Report Updates First Class Action Items:
USPS for next meeting to provide deeper dive of the First Class volume data by industry segment Consider expanding capability of Informed Delivery so that if consumer reports to the USPS that the physical mail shown in was not received the USPS will notify the mail owner so that the mail owner can resend mail piece Update on 2018 Promotions and MSP Incentive

Contest for 2018! New name and new rules
All entries must use Informed Delivery® Entries due January 15, 2018 Finalists compete to become Grand Champion at NPF Finalists will be included in Irresistible Mail® book Winning client, agency and printer will be recognized

For More Information Program Office contact: Email:
For More Information Program Office contact: Mobile Shopping & Direct Mail Starter Personalized Color Transpromo Tactile Sensory Interactive Promotion Emerging & Advanced Tech Promotion Earned Value - Mail: US Postal Service Post Office Box 23282 Washington, DC United States Postal Service

For More Information Program Requirements & Documents
For More Information Program Requirements & Documents Registration PostalOne Help Desk: (800) or Irresistible Mail: Irresistibl .com Follow USPS: United States Postal Service

Informed Delivery By the Numbers
38 Participating Mailers 259 Campaigns Completed 73% Average Open Rate* 4.74M Registered Households 5.17M Registered Users 770K -enabled Users Mailer statistics as of July 31, 2017. User statistics as of August 6, 2017. *6-month average open rate for all s sent, not just s containing mailer campaigns.

User Response 95% 95% 96% 88% 11% 1% 59% 33% 7%
are satisfied or very satisfied with Informed Delivery 95% view Informed Delivery notifications every day or almost every day would recommend Informed Delivery to friends, family, or colleagues 96% Device to View Notifications Time of Day to View 88% Morning 11% Afternoon 1% Evening 59% Mobile 33% Computer or Laptop 7% Tablet Source: July 2017 User Survey.

Coming Soon! Mailer Campaign Portal
The Mailer Campaign Portal will provide a simple, self-service channel for organizations to create, manage, and retrieve data on their Informed Delivery interactive campaigns. September Soft launch with existing mailers October Expected official launch Note: screen images are based on preliminary designs and are subject to change

Campaign Creation & Previews Note: screen images are based on preliminary designs and are subject to change

Campaign Management, Reports, & Media Library Note: screen images are based on preliminary designs and are subject to change

Open Discussion

USPS Marketing Mail Product Development

Agenda Pulse of the Industry 2017 Promotions Updates
Promotion Survey Update Open Discussion

Volume % Variance from SPLY
USPS Marketing Mail Volume USPS Marketing Mail Volume % Variance from SPLY Volume (in Billions) Source (s): RPW Quarterly Reports; Excludes Parcels and International Mail volumes United States Postal Service

Volume Changes USPS Marketing Mail: % Change to SPLY

Pricing Strategy: USPS Marketing Mail
Letters – Most rate categories increase near CPI High Density Letters – Above average to shrink gap between HD and 5D Narrow letter dropship as required by PRC Commitment to reduce passthroughs by at least 10 percentage points No major changes to other Presort discounts Nonprofit – NP Letters receive higher than average increase Carrier Route, HD and Sat. Flats - below average increases, encourage continued mail use for marketing activities Spread between presort levels (from 5D DSCF piece rate) may widen Flats – 105% of Cap as directed by the PRC Presort Gaps maintained at current levels Operational Changes Order of pallet preparation for CR Pallets in non-FSS zones Updating the order of pallet preparation to increase number of pure CR Pallets Incent direct pallets to avoid bundle sorting

Stamps Now Overview August 18, 2017

Stamps Now A Stamps Now account is the most convenient way for businesses to order postage. Every Stamps Now account is customized to the specific preferences of the business. Order the stamps you need to complete all your mailings. Select the format, denomination, and stamp designs to meet your specific requirements. First-Class Priority Mail Presort First-Class Presort Standard Select the best format. Coils of 3,000 Coils of 10,000 Panes, books, etc.

Stamps Now Placing orders is easy. Simply choose the best method for convenience fax mail your order SFS provides Stamps Now customers a dedicated fax line and address for customer orders. Flexible payment methods ACH Credit Card* FedWire money order business check If your business has multiple locations, use one account number for multiple shipping addresses, or set up individual accounts. *credit cards cannot be used to purchase Presort or Non-profit stamps

Stamps Now Order Fulfillment
Whatever method suits your business, the order will be keyed and begin processing when SFS receives the order. Orders are typically filled by the end of the next business day. A separate is provided that will connect your business directly with Customer Service. SFS Dedicated Customer Service will work with your business to provide options, in the same denomination, for stamp issues that are no longer available.

Stamps Now Benefits of establishing a Stamps Now business account
No fee to establish account Choose the denomination, format, and stamp subject for your business Select the payment option (ACH, FedWire, check, money order or credit card) NOTE: credit cards cannot be used to purchase Presort or Non-profit stamps Receive a customized order form for your business Dedicated address and fax line for orders and for customer service Orders are mailed Priority Mail® (USPS delivery service standard for Priority Mail® is business days after shipment) For expedited service, Priority Mail Express® is available upon request for an additional fee Presort First-Class, Presort Standard, and Non-profit stamps are available in large coils (i.e.: coils of 3,000 and / or 10,000) Select the format and receipt of reconciliation reports for your business

Complete 2017 Promotions 2017 Earned Value
Participants: 729 Final Volume: 1.3B pcs (>250% increase) Credit review/processing underway, 84% completed, <0.2% disputes MUST agree to credits by 9/15, and use them by 12/31 2017 Tactile Sensory & Interactive Promotion Participants: 158 Volume: 1.2B pieces Revenue: $268M 2017 Direct Mail Starter (Pulse question, re: Sales outreach) Registered: 40 /Participants: 1 Volume: 11k Revenue: $2K

Registered 301/Participants – 265 Volume: 4.9B Revenue: $1.1B Data issue affected 7 mailers in the first 5 days of promo; data fix is in approval process, expected completion in 2-3 wks 2017 Color Transpromo Registered: 59 / Participants: 54 Volume: 302M Revenue: $111M 2017 Mobile Shopping Registered: 584 / Participants: 310 Volume: 422M Revenue: $103M >20 companies: Informed Delivery/Mobile Shopping campaigns

2017 Promotion Surveys Update

CY16 Promotions Survey Results
CY16 Promotion Survey Response Results 25% of all promotion participants1 completed surveys for CY16 Emerging & Advanced Technology and Tactile, Sensory, & Interactive Promotions – needs improvement Survey Participants largely identified themselves as Repeat Participants2 Emerging & Advanced Technology Tactile, Sensory & Interactive Promotion Participants 226 210 Responses 61 50 Repeat Participants 53 34 New Participants 5 8 I don’t know 3 Note(s): /1 Promotion Participant refers to each instance a company participates in a CY16 promotion; Companies may participate in multiple promotions /2 Survey Participants refers to the list of all responses Expedited Mail United States Postal Service

CY17 Mobile Shopping Survey
New Survey Process Change Targets Different Stages of Promotion New Mobile Shopping Survey will split our traditional, comprehensive survey across the promotion timeline for a more targeted approach Questions for each survey issuance parallel the current stage of the promotion Pre-Promotion Promotion Period Post-Promotion CY17 Mobile Shopping Survey Process: Enrollment-based Portion of Surveys Issued Promotion & Mailing Experience Surveys Issued Post-Promotion & Reflection Surveys Issued 1 2 3 Will be distributed to UG8/MTAC address lists in addition to Program Registration POC

CY17 Mobile Shopping Survey
New Survey Process Change Promotes Ease of Use CY17 Mobile Shopping survey questions will be embedded in the body of the Each survey will be brief: limit 1 to 4 questions The new survey process will personalize and tailor to a mailer’s experience Missed out on the survey? The complete CY17 Mobile Shopping Survey will be accessible to all on PostalProTM following the promotion

Pulse Report Updates Marketing Mail Action Items: None
Question regarding 2018 Promotions timelines

User Response 95% 95% 96% 88% 11% 1% 59% 33% 7%

Open Discussion

Periodicals Product Development

Agenda Pulse of the Industry 2017 Promotions Review Open Discussion

Volume % Variance from SPLY
Periodicals Volume Volume % Variance from SPLY Volume (in Billions) Source: RPW Quarterly Reports United States Postal Service

Pricing Strategy: Periodicals
Inside County - receives average increase Outside County Pound rate element – No increase Piece rate element – Above average increase Bundle element – Above average increase Sacks element – Above average increase to incent operational efficiency Operational Changes Order of pallet preparation for CR Pallets in non-FSS zones Updating the order of pallet preparation to increase number of pure CR Pallets Incent direct pallets to avoid bundle sorting

Complete 2017 Promotions 2017 Earned Value
Participants: 729 Final Volume: 1.3B pcs (>250% increase) Credit review/processing underway, 84% completed, <0.2% disputes MUST agree to credits by 9/15, and use them by 12/31 2017 Tactile Sensory & Interactive Promotion Participants: 158 Volume: 1.2B pieces Revenue: $268M 2017 Direct Mail Starter Registered: 40 /Participants: 1 Volume: 11k Revenue: $2K

Registered 301/Participants – 265 Volume: 4.9B Revenue: $1.1B Data issue affected 7 mailers in the first 5 days of promo; data fix is in approval process, expected completion in 2-3 wks 2017 Color Transpromo Registered: 59 / Participants: 54 Volume: 302M Revenue: $111M 2017 Mobile Shopping Registered: 584 / Participants: 310 Volume: 422M Revenue: $103M >20 companies: Informed Delivery/Mobile Shopping campaigns

Pulse Report Update Periodicals Action Item:
Provide clarification regarding inclusion of magazine subscriptions within Mobile Shopping promotion - Mobile shopping requirements and FAQs updated - Recurring payments or digital subscriptions still not eligible; however, one-time or gift subscription purchases ARE now eligible for 2017 Mobile Shopping -We are requiring specific data when approving these potential participants -Will review data to determine future inclusion

Periodicals Action Item: identify the number of Periodicals mailers participating in Earned Value
Total MIDs: 2,896 Periodical Mailer MIDs: 361, 12.5% of total ------ Total CRM/BRM pcs: 4.73M pcs, <0.5% of total volume

User Response 95% 95% 96% 88% 11% 1% 59% 33% 7%

Open Discussion

First-Class Mail Product Development

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