Mailing Services Update 1 National Postal Policy Council December 12, 2013 Tom Foti Manager, Mailing Services New Products and Innovation

2 Agenda ■ First-Class Mail Trends ■ Jan 2014 Single-Piece update ■ Alternate Postage ■ 2013 Promotions Calendar Update ■ 2014 Promotions Calendar Overview

First-Class Volume

Residual Rate Changes ■ Task Team 21 reviewed and clarified eligibility and acceptance processes for residuals: ■ Blended price for combining 1 oz and 2 oz pieces; not eligible for new meter price ■ Option to separate pieces by weight and pay prevailing Single-Piece prices at the new meter price  New Meter price for all Single-Piece letters with meter, permit imprint, precancelled stamps, PC Postage Single-Piece 4

Alternate Postage Update 5

How does it work: Alternate Postage Payment relies on Intelligent Mail ® technology: Sent from anywhere to anywhere & charged back to a company Identifies and scans each unique mail piece as it moves through the postal system Counts the mailpieces during normal mail processing Uses the mail piece counts to debit the company’s Centralized Automated Processing System (CAPS) account. Alternate Postage Payment: An easy, convenient way to send single-piece First-Class Mail® – letters and postcards – without a stamp or postage affixed 9 Filed with PRC: November 5, 2013 Target Launch Date: January 2014 Pending PRC approval Alternate Postage

Creating a New Opportunity for the Mail 9 Pending PRC approval Alternate Postage Businesses providing access to customers and consumers to mail to anyone buy eliminating postage process –Retail purchase opportunities (greeting cards, gift cards, etc) –Loyalty opportunities (i.e., thank you notes in gifts) –Direct Marketing –New emerging opportunities

2013 Promotions Calendar Update 8

2013 Promotions Calendar 9 9

Earned Value Results ■Customers earned about $10.7 million in credits ■68% of acquired credits have been used:  70% for FCM mailings ■Customer Survey Results  277 responses (114 MSPs, 163 mail owners)  63% had never participated in a promotion  65% enrolled to reduce mailing costs  Approx. 10% increased outgoing reply mail pieces as part of the promotion  Using the Earned Value credit: ■One third plan to increase their mail volumes ■One third plan no changes in their mailing behavior 10

2013 Promotions Calendar 11

2013 Promotions Calendar 12

2014 Promotions 13

2014 Promotions 21

General Updates ■ PRC approval of 2014 promotions ■ External webinar planned December 12 ■ Additional requirements posted on RIBBS ■ Quick Start guide for enrollment available in early December 2014 Promotions 22

Proposed Promotions Eligible Mail:  Standard Mail letters and flats  Commercial First-Class letter, cards, & flats Discount: 2 percent per eligible mailpiece. NEW Registration opens December 15 Full Requirements posted on RIBBS External Webinar planned for January 2014 Qualifying mailings must include either: 1.A creative mobile barcode that incorporates one of the following: a)two or more colors set against a background (other than black or white) b)a trademark or graphic and at least one color (other than black or white) 2.color digital image recognition technology 16

Proposed Promotions Mail campaign should utilize customization through urls, websites or mobile experiences with both relevant messaging and content linked to the urls, websites and/or mobile experiences. Both the mailpiece and PURL/website must be customized and/or personalized to qualify for this promotion. Registration: March 15 – June 30 Promotion Period: May 1 – June 30 Eligible Mail:  Standard Mail letters and flats  Commercial First-Class Mail letters, cards and flats Discount: 2% per eligible mailpiece. Detailed program requirements will be posted on RIBBS/usps.com in early December 17

18 Encourage USPS customers to continue to provide Business Reply Mail® (BRM) and Courtesy Reply Mail ™ (CRM) as options for consumers to communicate with them Proposed Promotions Registration Period: February 15 – March 31 Program Period: April 1 – June 30 Credit  2 cents credit per eligible, returned CRM or BRM mailpiece.  Participants in the 2013 Earned Value Promotion whose CRM and BRM counts increase in 2014 will receive 3 cents per eligible mailpiece Credit Receipt/Redemption  Credit will be applied to the mailer’s Permit Imprint account 18

19 Premium Advertising Product Promotion 2014 Proposed Promotions The promotion offers an upfront discount on First-Class Mail postage on letters composed entirely of marketing or advertising content. Registration Period: Feb. 15 – June 30 Promotion Period: April 1 – June 30 Eligible Mail: First-Class Mail® presort and automation letters (IMb full-service mailings only) Eligible Participants: Customers who mailed $6 million or more in Standard Mail letter postage in FY 2013 Eligible Customers contacted by USPS by Dec 20, 2013 Postage Payment: Permit Imprint only 19

20 Color Print in First-Class Mail Transactions Promotion Encourage FCM mailers to the utilize dynamic printing of color ink on onserts with bills and statements, which can produce greater connection and response from consumers Proposed Promotions Eligible Mail: First-Class Mail® presort and automation letters sent in IMb full- service mailing Upfront 2% postage discount to mailer who use variable color print on transactional mail (required to be mailed as First-Class Mail) Eligible pieces must have dynamic color printing on the bill or statement Color messaging must be for marketing or consumer information purposes and within the contents of the bill or statement  Use of color inserts and pre-printed paper stock, do not qualify for the promotion  Color in transactional fields alone of the mailpiece will not qualify  Cannot be an addendum or separate page added to the bill or statement 20

21 Color Print in First-Class Mail Transactions Promotion 2014 Proposed Promotions 1. Pre printed color paper stock does not qualify 3. Color messaging is dynamically printed 2. Color content is marketing or consumer information

Proposed Promotions Messaging within contents of the bill/dynamically printed Page 4 of 4 Must appear as part of the statement (same header or footer, paper stock, page #s, etc) Messaging at end of statement

MTAC User Group #8 ■ Co-Lead Industry  Rose Flanagan, Data Mail/MTAC Product Development Industry Lead  Co-Lead Industry, Sush Parikh, AT&T ■ Co-Lead USPS  Krista Becker  Co-Lead USPS, Roy Gordon Promotions User Group

User Group Focus ■ New promotion ideas – Focus on CY2015  Focus of next meeting on 12/17 ■ Opportunities for Implementation Enhancements  System & software requirements ■ USPS ■ Industry  Business and Customer processes  Communication of issues and resolution with mailers  Industry education Promotions User Group

Future of Mail 25

26 Questions?