Post Office is braced for a world after monopoly

NEWS ANALYSIS: Post Office is braced for a world after monopoly – The Post Office is preparing for competition following the postal regulator's decision that its monopoly must end. Chris Mahoney looks at the challenges facing Consignia
From PR WEEK, April 6th, 2001

By CHRIS MAHONEY Postman Pat is girding his loins for battle. His survival depends on
maintaining the affection of his public amid fears that nasty,
fresh-faced competitors will seek to portray him as Postman Prat. Consignia, which last week became the official name of the holding
company formerly known as the Post Office, may yet come to
appreciate Pat's subtle propaganda value. For last week saw not just the transformation of the Post Office
into Consignia Plc, it also signalled the end of a 350-year postal
monopoly. PostComm, the new regulatory body, is emphasising the virtues of
competition. Its first licence with Consignia requires the old Post Office to
allow competitors 'fair access' to its infrastructure. In all this it is egged on by some rather tart observations from
Postwatch, the body set up to safeguard customers' interests. This
particular watchdog seems to have taken a dislike to Postman Pat,
complaining that he manages to lose a million letters a week. Yet the watchdog is in a rather odd position. Postwatch supports
dramatic changes to an institution that few grumbled about in its
recent focus group. 'For those of us working to improve services, the depth of feeling
people have for the Post Office is surprising,' says Postwatch
spokeswoman Elisabeth Hindle. 'It is right up there with John Lewis
and Marks & Spencer in terms of implicit trust. People do love the
Post Office.' Even that apparently rosy news might spark a shiver at Consignia.
Affection and respect have not translated into customer loyalty for
M&S. Even John Lewis has wobbled recently, with a 23 per cent
collapse in profits last year. Hindle says that our affection for the Post Office might be a
product of ignorance. 'It is a monopoly, so people don't know what else is available,' she
says. 'Once you explain what happens on the Continent, people do
voice an interest. Three-quarters of people who had not been happy
with the service did not bother to complain because they felt they
would not get anywhere – that reflects badly on the Post Office.' Hindle's general argument that 'the Post Office needs to buck itself
up' is accepted by Consignia acting director of external relations
Paul Budd. His internal communications strategy is built around pushing that
message at a workforce sometimes seen as truculent. The wildcat
strikes that have hit services in several large cities this year
'must end', he says. Externally, Consignia will be emphasise just how many tens of
millions of satisfied customers the various sub-businesses allegedly
boast. Budd says this has worked in Consignia services already facing
competition, such as courier business Parcelforce. He is also quietly confident of another potential counter-attack
technique: Post Railways Privatisation Phobia. 'There will be pressure and expectation on many new entrants,' he
says. 'One obvious example in which brands have failed to meet
customers' expectations when they have moved into a new sector is
transport.' It is expected that Consignia as a brand will scarcely impact on the
consciousness of the person in the street – and nor is it intended
to. Budd says the company will continue to exploit the almost unmatched
recognition of Royal Mail, Parcelforce and the Post Office. 'The change of name for the holding company makes no difference to
the branding for Royal Mail or the Post Office branch services,' he
says. 'But as we start to generate new products such as e-commerce and
work overseas, they will be supported by the Consignia name. That
will show we have a range of communications solutions. We will be
talking to businesses as Consignia, not as separate voices.' Down the high street it will be different. 'The brands are highly
familiar and highly trusted. That is why there is no wish to change
them or create confusion,' Budd says. But what tips are there from those who have worked in companies
converted from old-style monopolies to thrusting corporate sharks? Charles Naylor, director of corporate affairs at Centrica, one of
two brands from the British Gas split, says: 'When the only way is
down (from 100 per cent market share), it could be perceived as a
threat. What you do is focus 100 per cent on your customer and ask
what else you can do with your brand to bring more products and
services to customers.' He suggests there is still lingering loyalty to the 'old public
sector brands' but points out that seven million of the old
utility's customers now get their gas elsewhere. Centrica scarcely
misses them, though, having outperformed the FTSE 100 by 160 per
cent since 1997 – while losing 25 per cent of market share. Caroline Moore, now on a career break after nine months with Innogy
(npower's UK arm) and several years as a consultant to privatised
utilities, says the Post Office identify its weaknesses. 'With every privatisation there has been an incredible increase in
public expectation,' she says. 'There is not the tolerance. The Post
Office retail outlet has a strong brand. The key thing at first is
to maintain reputation. They should look at customer service pinch
points such as queueing. Bad news in the papers has a quick and
negative impact on reputation.' She would counsel against an overly aggressive PR strategy
initially, suggesting that 'the enormous amount of lethargy' in most
markets probably makes it unnecessary anyway. She adds: 'They should research their customer base like crazy so
they have a clear idea of customer expectations.' Pat could soon be handing out survey forms with his post.
Copyright 2001 PR Week.
Source: World Reporter (Trade Mark) – FT McCarthy.PR WEEK, 06th April 2001