The Customer Connect program was jointly designed by the Postal Service Sales department and the National Association of Letter Carriers, and uses existing resources in new ways to grow Postal Service revenue. Postal Letter Carriers contact customers to identify the shipping needs of businesses and home offices. In a nine-month test in 2003, 4,662 carriers in 93 offices generated 1,206 leads for Postal Service Sales and more than $3 million in annual revenue. Customer Connect will be implemented in approximately 1,500 offices by February 2004.

     Retail is the way most Americans buy and use postal products and services. Each day, the vast majority of the more than seven million Americans who visit Post Office branches and contract postal units perform the very basic functions of buying stamps, mailing packages, and collecting mail from their Post Office boxes. Many more obtain stamps or other Postal Service products by

mail, online, through vending equipment, and through supermarkets and other authorized agents. As it faces an ever-changing marketplace, the Postal Service is exploring new services and business arrangements necessary to expand its customer base and meet the growing needs of its customers.

     In addition to the development of new solutions for its customers, creating agreements with business partners and other commercial carriers that help to capture the profit potential of the postal retail network will help the Postal Service to create sustainable net revenue. For example, the Postal Service's agreement with FedEx not only provides the Postal Service with new revenue, but it also leverages the postal retail network. In 2003, the Postal Service tested the value of its retail space with America Online, Pitney Bowes, and Stamps.com.

     The Postal Service will further explore the value of its retail space through the Lobby Asset Valuation Program, which is designed to segment Post Offices, stations, and branches by the size and type of facility and by the types of customers they serve. By applying these metrics, the Postal Service can properly leverage its retail assets with potential partners that have some relevance to mail. This represents an opportunity for the Postal Service to generate revenue while, at the same time, keeping customers in the mail. This program is expected to be implemented on a test basis by mid-2004.

     Customers will have the convenience of paying by credit card for Express Mail corporate accounts during a test in four district markets. Accepting credit card payments from online customers and frequent shippers who use Express Mail and Priority Mail services is also being considered.

     Additionally, co-locating retail services with business services retailers is planned for testing with several large retail chains catering to small businesses to help them grow using postal products and services. It is expected that the first partnership with a chain retailer will be implemented by spring 2004.