Could the CEBP market be as large as the postal service?

The US postal service is once again running billions of dollars in deficits. Its total volume continues to decline by billions of pieces each year. The number of employee layoffs increases. The requests for rate increases and reduced services continues. A Newsweek post argues that this decline in the postal service is actually good for the economy.

My colleagues in the UK tell me about the rather unique tradition of regular postal strikes that tend to be timed to cause maximum disruption near holidays. To be fair, it can be argued that the Royal Mail may have turned the corner at least from a financial perspective if not with service improvements. Their total volume continues to decline too. Despite declining volumes, revenues, and technical obsolence postal services remain some of the world’s largest employers.

Despite these negative signs it is understood there are remaining social contexts and regulatory demands for ubiquitous mail services.Yet, that is really the only supporting argument. Many of the  business related reasons for using traditional mail are obviously outdated already. For the majority of us the mail has become a test of our commitment to recycling rather than a useful government service. It is difficult to imagine a true transformation of something now popularly referred to as snail mail.

At the same time, we can look at the Telco industry (once also a government protected monopoly) and ask if it has a hope of evolving into anything more than a dumb pipe. The next question that comes to my mind may seem a bit unusual.

What if Telcos or possibly a major CEBP focused business process outsourcer decided they were going to directly compete for business revenue and functions that traditionally go to the postal service?

For major Telcos and BPOs  the first question is whether the potential market  is large enough. Are there billions rather than millions in potential revenue? The postal service is a perfect example of a two sided market that benefits from winner take all economies. Thus, the revenue numbers attached to just enterprise sent consumer mail  are in the tens of billions of dollars in the US and hundreds of billions if not in excess of a trillion dollars globally.

The  only major difference between the business functions provided by the  postal service and CEBP solutions is in terms of the marketing function.  At least in the US and UK, permission based marketing is the regulated and cultural standard for telco inspired solutions. A similarly enforced permission based marketing regulation would be the final nail in the coffin of mass mail marketers who rely on gross volume to generate  single digit responses.  

This “marketing” difference is not as clear cut in many developing countries that use affinity marketing as a means to subsidise mobile phone adoption and mobile payment transactions.  Interestingly, I wonder if many of these same countries have as strong a history of government sponsored mail services compared to the UK and US.

This current marketing difference is more a problem of creative business models and culture than one of technology. Being able to proactively send a customer a targeted appreciated  marketing message by voice or sms will become more common as consumers and retailers  continue to get comfortable with social media and understand the value of  creating opt in permissions for their trusted networks of friends and businesses.  Marketing guru Seth Godin bluntly describes the difference in business models as smart versus dumb.

If one goes through the range of reasons why mail has traditionally been most useful for all industries VoiceSage’s clients have already found many more productive solutions through the use of our CEBP application. In many instances the client uses CEBP solutions to remove the need for postal mail entirely from their processes. In other cases the enterprise uses CEBP solutions to improve the experience of any remaining paper based communications. Our ability to provide just in time personalization while handling global scale allows our clients to generate ROI across both big and small business processes.

Our  UK, Irish, and US based VoiceSage clients rely on CEBP solutions to provide logistics, collections, communications, and customer service  business process improvements every day.  With a Telco or BPO style strategic partner,VoiceSage clients in parts of  EMEA could certainly tap the marketing power of CEBP quickly.

We have never thought of ourselves as competing with the largest postal services in the world. Maybe we should.

Patrick Murphy
VoiceSage
July 12, 2010