Can Postal Service Win with Money-Back Guarantee?

What would you say if the company that you were considering hiring for your advertising campaign told you, "We guarantee that your campaign will be successful, or we'll refund your money?" I think you'd say, "Come on now, what's the catch?" That would be a good response. But what would you say if the U. S. Postal Service promised to refund your money if your direct mail campaign failed?

This is exactly what the Postal Service wants to do (at least for a few big spenders). According to the Associated Press, the Postal Service wants to launch a test next month called Mail Works Guarantee. Under the proposal, the Postal Service would select 16 companies that spend $250 million dollars annually on advertising, but very little of it on direct mail.

And why would this struggling agency make such an offer? Because they are missing out on a huge chunk of ad revenues. "The top advertisers in America represent $90 billion in total expenditures for media advertising," the Postal Service noted in its proposal for the test. Of that, they currently get about three percent.

Under the plan, the Postal Service will help design individual direct-mail campaigns, and each company would agree to mail between 500,000 and 1 million first-class or standard mail items at regular prices. The company and the post office would work out the goal in advance and how success would be measured, and if the results failed to reach that level, the company would be entitled to a credit of up to $250,000 for its postage expenses. The refund would not cover printing or production costs.

The 16 companies will represent a cross section of companies. These include, retail, fast food, automotive and consumer products among others, with mail ads designed to accomplish such things as improving product sales, increasing store traffic or bringing more people to web sites.

Before testing can begin, the proposal must first be approved by the Postal Regulatory Commission.

I say good for the Postal Service. They are an independent agency, which means they don't rely on taxpayer dollars, and they've been hard hit (and increasingly so) by the internet. This is thinking outside the box. Let's hope it works.