C. Products and Services

The Postal Service has a statutory requirement to provide products and services that meet the varied needs of business and household customers. In 2005 the Postal Service continued to focus on developing new products and services to meet customers' evolving needs, and also continued to enhance the value of existing products and services.

1. Correspondence and Transactions

In 2005 there was a continued focus on transaction mail (bills, statements, and payments) to strengthen the mail as the primary channel for financial transactions. Ongoing refinements of the National Firm Holdout program and constant attention to 2-day and 3-day service performance have supported service improvements in this critical part of the mail base.

A. REPLY MAIL

Reply Mail lets businesses provide preaddressed letters and postcards, with or without postage, to encourage customers to respond to their offers. In 2005 the refinement of the Reply Mail Web site located on usps.com made Reply Mail easier and more effective for business customers. The Web site provides customers with information on how to use Courtesy Reply Mail (CRM) and Business Reply Mail (BRM) effectively and increases customer ease-of-use by reducing the time and effort required to apply for and obtain a BRM permit and ZIP+4 code. CRM customers can design their letter/postcard mailpieces, obtain a unique ZIP+4 code, and create an electronic mailpiece.

B. REMITTANCE MAIL

Remittance Mail is the segment of First-Class Mail service comprised of payments typically enclosed in Courtesy Reply envelopes. When combined with outgoing bills and statements, bill and remittance mail accounts for an estimated 50 billion pieces or 57 percent of First-Class Mail.

Due to the economic importance of bills and remittance mail, the Postal Service implemented an Improvement and Innovation Initiative to respond to current and growing challenges in the payments industry.

The initiative is designed to identify and implement service improvements that ensure consistent performance and expedited mail processing and delivery and to introduce innovative solutions for the industry to position the Postal Service as a value-added service provider.

2. Direct Mail

Direct mail is a content-rich advertising medium appreciated by its users for its effectiveness. A significant source of revenue for the Postal Service consisting mostly of items sent by Standard Mail, direct mail also includes a sizeable amount of Bound Printed Matter and First-Class Mail. Research shows that most recipients believe that direct mail is the most convenient method for staying informed of goods and services to help manage their home or business.

In 2005 direct mail revenue grew by almost 5 percent and volume grew by almost 6 percent. The foundation for this growth was based on factors such as the target-ability and measurability of direct mail, the response rates, and the return on investment which is among the highest of all advertising media. Some growth can also be attributed to recent developments in blocking spam e-mails and telemarketing calls, and the availability of innovative products such as Customized MarketMail and Ride-Along.

A. REPOSITIONABLE NOTES

Repositionable Notes (RPNs) allow direct marketers to apply specialized self-adhesive notes on mailpieces to communicate highly targeted messages to consumers. The notes can be repositioned (e.g., removed and placed near a telephone or on a computer or refrigerator) to serve as a handy reminder of the promotion or offer. The Postal Service initially launched RPNs in 2003 for use on automation-compatible letters. In April 2005, the Postal Service launched a 1-year provisional service test to allow customers to affix RPNs to all letter- and flat-size First-Class Mail, Periodicals, and Standard Mail, for a fee.

B. PREMIUM FORWARDING SERVICES

In August 2005, the Postal Service launched Premium Forwarding Services (PFS) for residential customers who are away from their primary residence for a minimum of 2 weeks and up to 1 year. For the first time, the Postal Service will forward all Standard Mail, publications, and First-Class Mail from the customer's primary address to a temporary address once a week using PFS. This is significant for Standard Mail advertisers because their mail will now be forwarded at no additional cost to the advertiser. All Express Mail, Priority Mail, Package Services Mail, and Accountable Mail requiring a scan or signature are forwarded immediately upon arrival at the primary address Post Office. As of January 8, customers pay a $10 enrollment fee and $10.40 for each weekly Priority Mail shipment.