B. TRANSFORMATION STRATEGIES

The Postal Service's revenue challenge is to cover an expected decline in First-Class Mail, driven primarily by single-piece full-rate letters, with growth in other segments of First-Class Mail and in other products and services. The organization is confident it will meet that challenge based on its progress under Transformation to date and the clear potential to develop new customer value through the power of mail. The Postal Service will focus revenue generation efforts in four areas:

• Create more customer value with products and services.
• Customize and simplify pricing.
• Enhance access and ease of use.
• Aggressive sales, promotions, and outreach.

1. Create More Customer Value with Products and Services

To take greater advantage of its unique set of services and presence in every community, the Postal Service will continue to transform product offerings by making them easier to use and better tailoring them to the needs of specific customers. By incorporating new technology and leveraging important assets, including its daily customer contact and widespread network, the Postal Service has a major opportunity to create valuable new solutions that increase the benefits of mail for all customers.

Make it Simple

Customers want simple and easy-to-understand products and services. An example of this is the response to the Priority Mail Flat-Rate box, launched as a test in November 2004. The convenience of the flat-rate feature — one price regardless of weight or destination — has generated high interest among households and small businesses because it takes the guesswork out of postage.

The Postal Service will apply this principle — making it simple — across its entire package line. Currently, package services are defined by shape, weight, content, and/or delivery commitment. Packages may be mailed in multiple classes and subclasses, including Express Mail, First-Class Mail, Priority Mail, Standard Mail, Parcel Post, Media Mail, Library Mail, and Bound Printed Matter. The Postal Service will simplify its offerings to ensure that customers have clearer expectations across the range of available package services. Products will be differentiated by clearly defined service commitments, and price will be based on value as well as cost. As with its domestic package product line, the Postal Service will simplify international package services in order to attain a growing share of the international mail and package business. Global Express Guaranteed, Global Express Mail, and Global Priority Mail products will be the focus of the redesigned offering. These products will be evaluated for conversion to day-certain services (i.e., 2-, 4-, 6-day service) to key countries.