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DMA Comments on Postal Rate Commission Decision to Approve Bookspan NSA
New York, NY, May 11, 2006 - The Direct Marketing Association (DMA) fully endorses yesterday's decision by the Postal Rate Commission (PRC) to approve a Negotiated Service Agreement (NSA) between Bookspan and the US Postal Service. The agreement represents the first of its type to allow volume discounts for Standard Mail mailings.
"We applaud the efforts of the PRC, the Postal Service, Bookspan, and numerous interested stakeholders to bring about this agreement," said Jerry Cerasale, DMA's senior vice president for government affairs. "We hope it opens the door for future agreements that will encourage large mailing projects and in turn, bring additional and much-needed revenue to the Postal Service."
Markus Wilhelm, Chief Executive Officer of Bookspan and a member of DMA's Board of Directors, says he is pleased that the majority of the Commission has approved the Bookspan NSA.
"This historic decision was the product of extensive discussions and thorough analyses by the Postal Service and Bookspan,” Wilhelm said. “This victory benefits all users of the Postal Service for the long term as it creates a model to offer incentives to grow.”
Wilhelm added that, “The decision was carefully structured to protect the Postal Service and will yield benefits to all mailers. We are hopeful that the PRC action will set a foundation for future similar arrangements so that the Postal Service can more effectively attract additional volume and compete in today's direct mail marketplace."
Negotiated Service Agreements allow the USPS to negotiate mutually beneficial terms for service and price with large mailers. Under NSA rules, the terms of any approved agreement must then be extended to any other company with a project of similar scope.
In commenting on yesterday's decision, Cerasale also noted that it "reaffirms DMA's belief that NSA's are allowed under current law and would not need to be further addressed in any postal reform bill."
Both the House and Senate versions of postal reform legislation that are currently under consideration allow for the continuation of NSAs.
This new agreement between the USPS and Bookspan differs from previous NSA's in two important ways. It is the first NSA to be extended to an organization other than a financial institution, and thus the first to extend to Standard Mail as a class. As well, this particular NSA provides a discount for the mailer on the basis of volume alone, and does not require additional work from the mailer.
The Direct Marketing Association (www.the-dma.org) is the leading global trade association of business and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the entire direct marketing process. Founded in 1917, DMA today has more than 4,800 corporate, affiliate, and chapter members from the US and 46 other nations, including 55 companies listed on the Fortune 100.
In 2005, companies spent an estimated $161 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated an estimated $1.85 trillion in increased sales in 2005, or 7% of the $26 trillion in total sales in the US economy (which includes intermediate sales). All together, direct marketing accounted for 10.3% of total US GDP in 2005.
The Power of Direct: Relevance. Responsibility. Results.