Cultivating customers
How Poste Italiane is achieving high performance by transforming customer relationships to define next-generation postal services. As European postal market liberalisation rapidly approaches, keeping revenue buoyant while contending with the erosion of traditional services has highlighted the need for powerful customer experiences. What if a postal organisation could retain existing customers and innovate by introducing new services that satisfy changing customer demands? Embracing a climate of change, Poste Italiane decided to find out how a customer-centric approach could not only boost profitability but also, ultimately, help the postal organisation achieve high performance.
Italy’s leading postal services operator, Poste Italiane offers universal postal services and integrated communication, logistics and financial services and products throughout the region. Employing more than 155,000 people and boasting a network of 14,000 post offices, 40,000 vehicles and around 200 sorting centers for mail and parcels, Poste Italiane generated net revenues of €17.8bn for the fiscal year ended December 31, 2008. Early in 2006, Poste Italiane launched a customer relationship management program. Aimed at improving customer strategy, standardising processes across its business units and providing a unique multi-divisional view of customer information, the initiative was designed to both diversify the postal operator’s business and help the sales force to better understand customer behaviour.
Such a capability affects all of Poste Italiane’s commercial channels (private and business customer markets), Poste Italiane’s postal services and Bancoposta business divisions and the whole of Poste Italiane’s customer base: business customers, comprising close to 100,000 large and top account customers, 1.7m small and medium business and small office home office customers and retail customers numbering almost 32m.
To put the program into practice, Poste Italiane needed to work with a company that had cross-functional skills in SAP-based solutions including SAP CRM, technology architecture capabilities within public service, and dedicated postal and banking industry specialists. Poste Italiane selected Accenture whose involvement spanned from the requirements-collection phase to roll out-phase, covering in particular: process design, functional design, technical design, development test, deployment, roll out strategy definition, training, technical architecture design and set up, capacity planning and environment operation (including production environment).
“We had a solid team, both from a functional and a technical point of view,” said Roberto Marinelli, senior executive-Health & Public Service, Accenture. “With strong collaboration and a keen orientation toward measurable results, we were able to focus on the real requirements of Poste Italiane users. Moreover, we were keen to support end users in Poste Italiane branches across the country. We knew from experience that the cooperation of the people out in the field would make a significant difference to the project’s overall success.”
Breaking down this large-scale program into manageable components, the initial processes implemented were presales, post-sales, marketing and customer analysis which were then followed by the implementation of campaign management and sales processes. The customer relationship management capability focused on two aspects: Customer segments-the project team started with the business and small to medium business segments and then moved to consumer segments; and business processes-sales force automation, customer analysis and marketing strategy were all identified as key processes with the end goal of transforming the postal operator’s sales approach to customers.
Also important to the program’s success was the use of an enterprise data warehouse to ensure the consistency of data transferred from legacy systems. In addition, a thorough but pragmatic approach was adopted that involved introducing prototypes and customising them to gain the acceptance and cooperation of users. By employing a change management program, the Poste Italiane workforce was encouraged to embrace change through a series of communications that clearly set out the new customer strategy and the benefits to both the workforce and Poste Italiane from the new customer relationship management program. Achievement milestones were highlighted and the rewarding nature of the process reinforced.
“The customer relationship management system proved to be an enabler for business transformation, integrating and standardising business processes across business divisions and commercial channels,” said Stefano Sappino, Head of CRM Program, Poste Italiane. “Benefits gained along the way include: identification of potential opportunities for cross-selling, transformation of sales approach towards customers, enablement of a customer-tailored offerings, support for launching new products and services and the availability of integrated customer views through segmentation and purchase history analysis.”
Accenture research[1] has shown that a consistent, differentiated customer experience has a greater effect on customer loyalty-and, by extension, on growth, profitability and shareholder value-than any other factor related to managing customer relationships. Additional Accenture research[2] in the postal industry shows how strategic choice and capabilities are critical drivers to achieve high performance. A strategy of diversification-away from the traditional mail product-has emerged a clear winner, and it is here that Poste Italiane has proved to have strong performance indicators on parameters like return on capital and employee spread.[3]
A large scale project with a high-volume activity, the new customer relationship management system is reaching 24,000 users in 14,000 Poste Italiane post office branches across Italy and more than 33,000,000 customers (across large and top accounts, the small and medium business and small office home office and consumer segments). Ongoing work includes further development of the sales processes (through better integration with the back-office system) and multi-channel customer relationship management (employing the Internet and contact centres to better effect).
Having achieved its transformational goal, Poste Italiane can now enjoy the benefits of diversification through its enhanced customer relationship management capabilities.
“Poste Italiane considers the customer relationship management platform a key asset to our business strategy definition, planning and execution,” concluded Sappino.
Further reading: Mail & Express Review August 2009 and May 2009 issues for more information about high performance in the postal industry and the impact of customer centricity.
[1] Source:Customer Satisfaction in the Changing Global Economy Satisfying new requirements for high performance. Accenture 2007.
[2] Source: Achieving High Performance in the Postal Industry: Accenture Research and Insights 2009
[3] Employee spread is defined as revenue per employee less operating costs per employee.
