Earth Class Mail CEO Sarah Carr on the Revamped Business Model and What Had to Change in Her First 10 Months

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that millions of would sign up for the service. The process would then be automated and the costs brought down leveraging scale. So the product was originally forward priced assuming scale.

Not only did the scale never come, but the model never made much sense. We would charge a flat price and then allow our customers to request actions on their mail—this required labor. We were actually afraid of our customers getting too much mail and wanting too many scans. We lost money on every customer, even the ones that never got any mail. And ultimately, it was not a sustainable business model.

We decided to switch our model to focus on business customers who want to divert a particular mail stream to us, not necessarily have us manage all of their inbound postal mail. We realized that if you don’t get much mail, or if you are just using our solution as a mail forwarding service, we don’t give as high a value as if you are using the solution as your business lockbox, or your in-house mail scanning service.

We now charge a monthly subscription fee, and provide a menu of services that our customers pay for separately such as mail and document scanning, check deposit, secure mail storage, recycle and shredding, etc. Our current customers appreciate the ability to choose their services and manage the costs—and they clearly see the value of our service. Earth Class Mail customers can avoid hiring a clerical staff person because all of their scanning, filing and check deposits are being done by us. Spending $2,400 a year to save $35,000 is a fantastic return on investment.

X: Where does the company stand now and where do you see it heading in the next year? Next five years?

SC: We are seeing the fruits of our change in vision and focus. Our customer base is shifting to small business high-volume customers, and more and more customers are signing up every day. Our postal licensee, Swiss Post, continues to improve its product, Swiss Post Box, and our relationship is very strong. I recently testified at a Congressional forum on postal innovation in the 21st century and hope that the U.S. Postal Service will explore some of the ideas that I put forward. It’s an exciting time for our company. Next year is all about growing the retail business, driving to profitability and continuing to innovate as a software platform provider. Five years from now? Who knows, but I hope that we are part of a bigger entity that can leverage what we have built and help us take it to the next level.

X: How would you describe your leadership and management style? Do you think the company culture has shifted since becoming CEO, and if so, how?

SC: I feel that I have created an environment where it is safe to voice your opinion and know your opinion will be heard. It may not be acted upon, but you will know why. We are a complete meritocracy. Our quality assurance manager was the person that suggested we add a test drive feature to our website in order to allow prospective customers to try Earth Class Mail’s service. Not only did we use his idea, but he got to design and produce the test drive! Lastly, we laugh a lot. If you can’t laugh during this level of intensity why bother?

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8 responses to “Earth Class Mail CEO Sarah Carr on the Revamped Business Model and What Had to Change in Her First 10 Months”

  1. Able Green says:

    I was an initial customer. The fees have gone up 500%. So much for the bull that she looks to long term customers. Sell out. Bring back the founder.

  2. Marcelo says:

    Several packs are returning with information that Earth Class mail have moved on. Like customer would be nice to get a advice first…It seems that Earth is going too bad

  3. Divine says:

    It is troubling that when faced with a profitability issue that ECM’s response is to raise the prices. Customers are fleeing in droves or bracing for the next price hike (err, so called “revamped business model”). I don’t think this is a sustainable practice.

  4. Tarzan says:

    We have been doing some case studies in my business classes on ECM and viewed it somewhat from startup, and this article was discussed in class one day. I see much more focus on the customer now, at least there seems to be from this article, than from startup. We started discussions with “what is it that they are actually providing and what is the unsatisfied customer need?” and the responses tended to end with confusion on how they thought this would work at scale.
    I never like seeing businesses go under, but we all thought it would if they didn’t get their act together.

  5. I am an instructor for a education company focused on teaching young adults the fundamentals of business. I have followed the origins of ECM from its infancy and even watched there short-lived television series Start-up Junkies. Conceptually, speaking there seems to be a solid rational for a service like ECM. It honestly could be a billionaire dollar business theoretically, but without a substantial cash injection it seems unlikely to go the distance. They are dealing more with changing a culture of how people receive and deal with their mail, then just making the process more innovative. If they want to increase customer acquisitions they must start with provide exceptional customer service without dramatically increasing the cost. Since, they have had a lot of VC and Angel backing in the past they have been pressured into getting fast paced results. Now, this pressure has translated into them increasing the price for there services. This may be a serious mistake that will alienate their existing client base. If you want to know more about my position please visit some of my lectures at http://www.youngpreneur.com. I hope some of my insights seem reasonably logical. Ultimately, no one can know with absolute certainty the future of any business, but it always helps to use a litte common sense. They are a great concept but they also need to be a good business. Good Luck ECM

  6. David says:

    I work overseas and use Earth Class to handle all of my mail. For me, the service has been fantastic. I now have a solution for handling my mail, including banking and IRS. I really appreciate this service, and hope the business model can be sustained in the long term.

  7. Andrew says:

    ECM’s price hikes are out of this world. There is a new company out there I recently came across at http://www.travelingmailbox.com – Based on their testimonials, it is obvious they put the customer first.

  8. Sri says:

    I have signed up with their service three months ago and been extremely happy. Very fast response. I was able to talk to the customer support on multiple times within few mins. They go extra mile to help. I prefer to pay more for the solution to keep them providing same service. Between 3 of my small businesses and my family of 3 people mails, we are saving over $200 when compared to Regus Virtual Mailbox Service.