FIELD INFORMATION KIT
This Capital One Negotiated Service Agreement
(NSA) Field Information Kit contains the following items:
• Employee Stand-Up Talk
• Frequently Asked Questions
• Talking Points
(To Be Given on Monday, September 1, 2003.)
Today the first Postal ServiceTM NSA takes effect.
As you may know, under the NSA, financial services
company Capital One receives pricing incentives in exchange for sending more First-Class MailŪ items to attract
new customers and expand its business. This could ultimately lead to millions of dollars of new revenue, boosting
our bottom line.
Capital One has also converted our electronic notification service (which notifies mailers of new addresses or
reasons for their mailpieces being undeliverable) to Address Change Service (ACS). With ACS, we will be able
to avoid handling and transportation costs on millions of
pieces of mail - another boost to our bottom line.
We must make sure that Capital One and all ACS mailpieces get handled correctly. ACS mailpieces are identified by an "ACS Participant Code" printed above the address block (a pound sign (#), the letter "B," and six
additional letters). All ACS mailpieces are treated in the
same manner, whether there is a Change of Address
(COA) order on file, whether it is undeliverable for reasons other than a move, or whether it's a First-Class Mail,
Standard Mail, Periodicals, or Package Services item.
The rule is that if it's undeliverable, it must be sent to CFS
so information can be collected and sent electronically to
the mailer.
This is the Postal Service's first NSA, but it will not be
our last. Our pricing group is currently negotiating with
other mailers to come up with agreements that provide
price incentives for businesses to increase their use of the
mail as an effective marketing tool. As these companies
increase their business, they will increase ours, adding
important revenue to our bottom line.
You may receive questions about this agreement as
business mailers will want to know how they can get an
NSA. Advise business mailers who are interested in an
NSA that they can get more information by calling
800-ASK-USPS.
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An NSA is a contractual agreement between the Postal Service and an individual company that provides pricing incentives in exchange for a shift in behavior by the
company that benefits the Postal Service. In many cases,
the change in behavior cited in the contract will be a
substantial increase in annual First-Class Mail or Standard Mail volume. To become effective, the proposed
NSA must be reviewed and recommended by the Postal
Rate Commission (PRC) and approved by the Board of
Governors.
NSAs take customer responsiveness to the next level.
For years, the Postal Service has worked with mailers to
identify customer needs and address them in ways that
improve service, reduce costs, and increase mail volume
and net revenue. Working with mailers in this fashion, we
have come up with many new products and services that
save and make money and benefit all parties. Including
pricing incentives is the next logical step.
There is currently only one - a 3-year test with Capital
One, which takes effect September 1, 2003. Capital One
will receive pricing incentives in exchange for sending
more First-Class Mail items to attract new customers and
expand its business. Capital One also agrees to convert
its systems to use the Address Change Service - electronic notification of forwarded mail and undeliverable
pieces. This means the Postal Service will not have to sort
and return millions of undeliverable pieces of mail to Capital One. Ultimately, the NSA may be worth millions of dollars to the Postal Service. We are pursuing other agreements and expect to implement more NSAs in the near
future.
Under the NSA, Capital One will receive a reduction in
rates that increases with mail volume for every First-Class
Mail item that exceeds 1.225 billion pieces annually. To
qualify for any reduction, Capital One must send more
First-Class Mail items than they typically do each year.
The customer will receive price incentives for meeting
negotiated thresholds of mail volume, and better business
relationships will develop as a result of the vetting and
negotiation process. Additionally, the Postal Service will
better understand the business needs and expectations
of customers and work to respond to them, resulting in
better overall mail service.
Through NSAs, customers may receive price incentives to increase their use of the mail as a marketing tool,
thereby creating more volume and net revenue for the
Postal Service as they acquire new business for themselves. They may be required to use more efficient systems and procedures, reducing Postal Service costs.
In addition, experience shows that by going through
the process, the Postal Service will discover opportunities
to solve existing problems and streamline internal systems and handling methodologies. This will help us to
identify new products and services that may potentially
benefit mailers, reduce costs, and improve service - not
only for the NSA partner but for other Postal Service customers as well.
The initial criteria for consideration are:
• The negotiations must result in a substantial, measurable net benefit to the Postal Service, as well as
the customer; and
• The NSA cannot unduly discriminate against or adversely affect any customers.
Applicants are encouraged to have or obtain a mailing
permit, establish a Centralized Account Processing System (CAPS) account, become Postal One compliant, and
participate in Mail Piece Total Quality Management before
being considered. They also must share in the costs of
negotiating and litigating the agreement before the PRC,
which may include (but is not limited to) separate counsel,
research and documentation, and witness expenses.
They are similar, but NSAs cover domestic mail and
must be litigated before the PRC. ICMs cover mail destined for international addresses and are not covered by
PRC oversight.
Mailers interested in being considered for an NSA can
get more information by e-mailing Pricing Strategy at
NSA@usps.com, calling 703-292-3638, or writing to:
PRICING STRATEGY
US POSTAL SERVICE
1735 N LYNN STREET RM 3029
ARLINGTON VA 22209-6036
Interested parties will receive a company profile form
and other preliminary prerequisite documents to complete
and submit to apply for NSA consideration. The Postal
Service will review the information and contact the applicant to discuss appropriate further steps.
That depends. Beyond the time required to collect and
exchange information and negotiate the proposed NSA,
review by the PRC can take up to 10 months. However,
the Postal Service is working with the PRC to streamline
and shorten the process, especially where precedents
have been established.
###
• An NSA is a contractual agreement between the
Postal Service and a company that benefits both
parties.
• In most cases the company will receive pricing incentives in exchange for sending substantially more
mail than they usually do.
• Any proposed new NSA must be reviewed and recommended by the PRC and approved by the Board
of Governors.
• The Postal Service expects to get new mail volume,
more new net revenue, mail handling efficiencies,
and important cost savings.
• Capital One gets pricing incentives for sending
more mail and better service for undeliverable
pieces.
• More mail means more business for us.
• Pricing incentives mean greater savings for the customer.
• NSAs take customer responsiveness to the next
level.
• For years, the Postal Service has worked with mailers to identify and meet customer needs, improve
service, cut costs, and increase volume and net
revenue. This method is how we have developed
many new products and services.
• The next logical step is to include pricing incentives.
• Via e-mail at NSA@usps.com
• Via telephone at 703-292-3638
• Via written letter to:
PRICING STRATEGY
US POSTAL SERVICE
1735 N LYNN STREET RM 3029
ARLINGTON VA 22209-6036
- Pricing Strategy,
Pricing and Classification, 8-21-03
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