Australia Post – our dead letter office

Many moons ago, Australia had a single communication giant: the Postmaster General’s Department, or PMG. Then in 1975, we woke up to discover Telecom and Australia Post. While the first has given investors and governments several sleepless nights since, Australia Post has trotted along in its own sweet way, happy to be out of the limelight. Yet for all the opportunities missed and value lost, our postal friends may well have matched Telecom-Telstra-ThenextGwhizz. My fear, having belatedly looked at Post’s "future ready business renewal program”, is that they’ll keep burning our public asset at the same profligate rate.

Former NAB Australia CEO Ahmed Fahour seems to be just the type of person to turn Australia Post around. One gets the impression that performance and strategy at Post doesn’t get the same type of scrutiny as, say, the NAB. Yet the public investment in Post, let alone its daily impact on us all, suggests we should pay more attention. The picture is not as rosy as it should be.

I first started to take note that Australia Post was on the path to implosion in 2009. Post is a public entity. Its owners, us, may then have been a little alarmed that it started using its outlets to sign up new Tabcorp customer accounts. It’s a virtuous circle: those in the queue to buy Smith Family Xmas cards wait while Post helps out the gambling business that drives the Smith Family’s business.

Tabcorp was pleased to announce: "The arrangement with Australia Post supports Tabcorp's strategy of offering our customers the best products, service and convenience in what is now a national wagering market." Yes, but how would it support Post’s strategy? It’s a sustainability-related question, though few see it that way.

Meanwhile, what was happening to its brand? Australia Post had long been on the shortlist for our favourite corporate brand, and as recently as 2002 was tops. But according to Interbrand’s 2009 Best Brand Report, our direct mail giant tumbled from that 2002 birthright – ie, Australia’s most valuable brand – to 14th. Its reduced brand value of $900 million sunk below Billabong (8th, $2,200 million) and Commonwealth Bank (2nd, $7100 million), for example. Telstra got the medal at $9.7 billion. Did that mean that Post had destroyed $6-9 billion in value? Surely not – that’s about what Allco lost, and we heard all about that.

Australia Post’s fall from the top was not simply a necessary result of the internet, although that is a chapter in the story. It is due to its failure to understand what it had that nobody else has or had.

Australia Post owes its residual brand value to the fact that for nigh on 200 years it delivered good news from lovers, kids and gran, rain, hail or shine, ready-to-read, to the kitchen table. It doesn’t seem to understand that for almost two centuries it was known for moving mountains to bring you the news you wanted or needed. No company or bank holds a candle to that feeling (faint though it now may be). Australia Post’s business was that feeling. It has worked very hard to lose it, and it should start to retrieve it before it is gone forever.

Post has all but lost that brand connection because it has ignored the 20 million consumer customers that give it its brand value. It certainly has copied lots of laudable innovations from overseas to help large-quantity business customers streamline their processes. But it has forgotten that its core business was to help us communicate with each other on the things that matter, and to get things to each other.

Its vital mission is not, as it seems to think, to sweep us into the maw of its retail network.

Nor is to see us as 20 million lambs for Australia Post’s decade-long obsession with direct mail. The more the better, from anyone, to everyone.

It’s not so long ago that we went to the mailbox with some anticipation of a pleasant surprise. Now picking up the mail ranks with taking out the garbage. In fact, at many households both are done in the same efficient nightly trip, without the "mail” getting near the kitchen table. "Direct mail” means direct to the bin. And every time Australia Post wastes our time, it loses its reputation and its name.

Australia Post has, for example, knowingly rejected the following opportunities to make it easier for us to use its services to send and communicate:

-- Any web-based means of communication. Instead, Post’s big online effort was Post BillPay. That’s right, it’s only online offer is and was bill payment. Such a brand buzz, paying bills.

-- A secure household email address, with personal sub-accounts. Post owned the delivery of personal mail. If letters are being emailed rather than posted, why didn’t it do anything to keep that space?

-- Household mail accounts for postal services, just as we have accounts for all our other utilities.

-- Picking up mail from our letter boxes, just as they do in the US.

-- Pads of pre-stamped cards that could be bought at any convenience store, scribbled on and posted for the same cost, little more effort and a whole lot more impact than an SMS. Make it easy and personal, and you retain the next-day mailbox feeling.

-- Selling stamps wherever they can be sold. Finally you can buy them outside a post office, but gee it took a long time. Because that option has never been promoted as part of a "Post – we’re where you are” campaign, nobody knows about it.

-- Selling stamps, express post bags and packaging in supermarkets. We buy all our other day-to-day items at WooliColes, why not these? Why queue in a post office behind the Tabcorp and passport customers to do something as basic as pop something into a little box and post it?

-- Making it just a little easier to ‘post’ at a post office. Over recent years they’ve rejected having ‘post only’ lanes in post offices, in many locations having a single queue to take you to the next counter, or having non-sales service counters to help people put together all the bits they need to send a parcel overseas, before they get to the sales counter and have to go back and start again.

-- Opening when we can get to the post office. Australia Post remains a strictly Monday to Friday, 9-to-5 outfit. Working people spend their lunchtimes doing something trivial because it’s the only time they can get there. The firm impression is that the people who sit on Australia Post’s board have never had to do this.

I’m sure that’s a list we could all add to.

With that record, it fills me with dread that a cornerstone of Post’s new strategy is to get "more and more businesses and government agencies to use our vast retail network as a shopfront, so that Australia Post becomes the place for millions of customers to access a veritable supermarket of services”.

This will be a big step. For the moment, we queue and wait for customers who have spent the better part of their sixties at the Australia Post counter, engaging in random trials of paperwork – a customs form here, a bank deposit there – at the hands of seemingly indifferent "service agents”. The strategy seems to be to have queuing customers stare long enough at Officeworks reject clutter that they feel compelled to buy them. It may well be a "veritable supermarket of services”, but it may also be a true house of pain.

Another leg of the strategy? "We are looking to expand into other trust-based services that we can offer online to complement our physical network.” It’s too little, too late. Now, anyone can offer those online services, and will do so quicker and more efficiently than Post has proven itself capable. More importantly, Australia Post no longer has the trust to leverage.

In the last few months, Post has been in the news for just two things. The first was its delivery of "adult-only” direct mail spruiking a discredited longer-lasting nose-blower. (Adult-only? You mean the rest was for my kids?) Any social radar would question whether this is appropriate material for our public mail system. Any business radar would question the wisdom of new clients that are in voluntary administration and under investigation by the ACCC.

The other news story has been Australia Post’s potential re-launch as a bank. In financial services, 80 per cent or more of market value represents the intangibles of brand, people, innovation capacity and networks. Australia Post’s physical networks might be in strong shape, but its treatment of intangibles suggests it’s not going to fly as a bank.

Australia Post has amazing assets, terrific people and remnant goodwill. Let’s hope they use them wisely.

Josh Dowse is an independent consultant on sustainable business. www.dowse-csp.com.au

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Maybe we could merge Australia Post with Sensis (another business of lost opportunity) and sell them to Singapore Post (See Australia Post – our dead letter office, April 13). But the FIRB would probably block that on the grounds of national interest anyway.
Don't forget the insanely high postage costs at Australia Post (See Australia Post – our dead letter office, April 13).
In Japan, I became hooked on sending random daily letters and postcards to friends and family. An international postcard cost me a whopping 50 yen to post (slightly over 60 cents at the current exchange rate) but here in Australia the same card costs $1.45! Really?! For the same little piece of paper. So of course I stick to emails and phone calls, infinitely cheaper.
Japan Post also manages to have a 24 hour, seven day a week window at its main city branches, so that insomniac customers can pick up large parcels and post things. Imagine that, actual customer service. They also have a luggage delivery service. You can drop your packed bag off at the local post office and when you arrive at your hotel the next day (or week) half the country away your luggage is there. No painful check in and no wrestling with the overhead locker. Now there is a business opportunity.
Beyond the residential ideas floated above, the single greatest revenue opportunity for a postal service is as a logistics company for business. Itella (Finnish Post) stands toe-to-toe with the global players as a tier 1 Scandinavian logistics supplier (See Australia Post – our dead letter office, April 13).
You forgot the other great innovation being touted: turning Australia Post into a "people's bank" to encourage competition (a codeword for encouraging more lending) in the banking sector (See Australia Post – our dead letter office, April 13).
Aust Post had a great opportunity to expand their Bill Pay arrangements, they acted as billing agents until 2007 and then dropped it because it was placing too much pressure on their systems. (See Australia Post – our dead letter office, April 13.)
Having an ex NAB CEO involved will undoubtedly result in Australia Post moving into some form of transactional banking services, and maybe rekindle the missed opportunity of billing agency arrangements.
This is an absolutely cracking article. One of the best I've read in Business Spectator (See Australia Post – our dead letter office, April 13).
Australia Post should be positioning to dominate the eBay/online shopping postal experience.
I agree that they should be selling satchels in the supermarkets. And registered post is still horribly painful. Horribly. What if you could buy envelopes at Coles, go home, enter the source and destination, make a payment, print the barcode and preprinted address label and drop it off. They'd off load a bucket load of foot traffic and add value to their services and brand. (If anyone thinks people gaming the system by putting a local destination to lower their charges, is a problem, Australia Post could simply return it to sender).
They should do away with selling all the crap that they have. It's half toy shop, office supplies, and half post office. This reminds me of the newsagency I used to work in, where the owner's wife would burn loads of cash on absolute rubbish (and have to discount by 90 per cent six months later to make way for more).
They're moving in the right direction with Passports tied into federal government systems (Australian government passport renewal is excellent!) and so on. The email idea is fantastic. Being open outside of the nine to five is also a must. The core funky focus needs a refresh. Hope they hire you to help!
I just had a chat with our local postie. He is well aware of complaints of decline in service and reliability (See Australia Post – our dead letter office, April 13).
I, like most businesses, have a PO Box. Recent policy change means business mail goes to my PO Box if addressed to it, as well as there being a delivery to my physical premises of mail not addressed to the box number. Apparently this is designed to make me pay a fee to direct all mail to the Box.
Contrarily, I am wondering why do I bother and pay a fee for a box? Our postie tells me he has received many complaints about this ludicrous policy as well as general decline in service. Delays in post and lost mail have become common place. I also have an interest in an internet business that uses Australia Post for fulfilment. Unfortunately, Australia Post will not deliver oversize parcels (such as skis). If Australia Post is unreliable for business letters and can to cater for parcel delivery, the future of the business is surely limited.
The author has missed the fact that Australia Post is no longer interested in viable retail outlets (See Australia Post – our dead letter office, April 13).
As someone who has just lost their local outlet as a result of recent cynical closures (driven by earlier cynical sell-off of the buildings), I estimate that the current Australia Post management is only interested in non-retail activities.
And there's no point talking about a people's bank as there was clearly never an intention to start one. The hiring of an ex-banker as CEO may have fed the rumour, but current management is not in the business of serving the public interest. Privatisation is in the wings, as it is elsewhere.
Australia Post's parcel business is one bright spot in the mess that is their business model (See Australia Post – our dead letter office, April 13). Sadly, the public face is long queues in a poorly stocked discount variety store. I refuse to walk into a post office voluntarily. I'd rather visit a bank branch.
What will happen to their retail network when Woolworths and Coles decides to let you do your banking and "services" while they process your trolley? Their only sustainable competitive advantage is the parcel business. That will vanish if they cannot maintain the network and economies of scale.
I suggest that Australia Post gets into customer service (See Australia Post – our dead letter office, April 13). For instance:
– Reliable postal delivery. They are only about 80 per cent reliable. My postie saves things up for two or three days a week to save effort
– Obey 'no junk mail' signs
– For parcels, actually knock on the door before leaving "you weren't home" notes in letter boxes.
– Avoid scrunching any letter of non-standard size
– Deploy a redirection service that works
That's how they've lost my loyalty. Through a lack of respect for their customers.
Australia Post started to "lose it" 20 years or more ago. (See Australia Post – our dead letter office, April 13.) In those days I could post a letter in the country and have it delivered to a suburban address in my capital city next day. And the reverse service was the same. Amazingly, after the introduction of the exorbitantly priced Express Post, these overnight services suddenly took an extra 24 hours to complete!
Has anyone tried to phone their local post office recently? Good luck, you'll need it. When going through the centralised system a few months ago it took well over an hour, plus half a dozen blood pressure pills, to resolve a simple question that my local post office could have answered within a minute.
For a company in the communications business, Australia Post just doesn't get it. No wonder it is losing value hand over fist.
Why doesn't AusPost offer an email service? It would open up limitless opportunities for the company, and deliver significant convenience to customers (See Australia Post – our dead letter office, April 13).Imagine if:
– Snail mail senders could address mail to a recipient using an email address that was recognised by an AusPost database and sent on to a physical street address.
– The customer could update their own records when they move, transforming the mail-forwarding function at the post office.
– The AusPost database could recognise an email address and apply differentiated pricing for stamps based on the location of sender and recipient.
– An AusPost bank could be able to keep track of its customers extremely easily, which would enable it to sell products better (the customer has updated their street address to Elizabeth Bay? Send them offer for discounted HNWI financial services available at their local AusPost!)
– And customers could have an email address they use for all of their essential mail (bills, notices, statements etc) that can be easily updated so that we never suffer those 'lost papers' that result in awkward phone calls from debt collectors (or maybe that's just me...)
I'd sign up for sure – I like AusPost (and I still use snail mail on a regular basis).
Look at all the posts (no pun there) (See Australia Post – our dead letter office, April 13).… Wouldn't it would be wonderful if Ahmed read them and contributed to the conversation. Or even better if he put on a shirt and came down to the Point Cook Aust Post branch on Saturday morning and did a shift. Oh look a flying pig!
Thanks for all the comments. (See Australia Post – our dead letter office, April 13.) The article concentrated on the consumer/brand story, but Post's business/parcel focus and service is definitely strong for the physical delivery of online purchases. I understand there are moves afoot to get Post to separate its business and consumer services. Some businesses no longer want to subsidise Post's comprehensive service obligations. The subsidy ($170 million last year) would shift to a government budget line item. Any such move would really make things interesting.
The postie repeatably riding across my lawn got me started on reducing my snail mail and now they are delivering unwanted rubbish as well! (See Australia Post – our dead letter office, April 13.)
We only use them when there is no alternative - a situation which makes them sloppy and typical costly public servants.
To be fair, AusPost has a problem with the universal service obligation, whilst facing stiff delivery competition on its most lucrative domestic routes (See Australia Post – our dead letter office, April 13).
Then there is the growing international reciprocity problem with online parcel delivery from Asia. Reciprocity (ie paying postal costs in the source country only) makes sense between like developed countries, but not between like and unlike. To give you an example, I purchased a Cat5 'Y' cable connector on ebay from China for $1 total delivered (yes, that includes the purchase price, packaging and postage) and yet the minimum parcel cost from here to China is $8.60. That sort of one-way trade must be killing AusPost's bottom line, not to mention Australian retailing in general.
A great article, still though Australia Post does turn a profit, unlike most overseas government operations, and it can get a letter from one side of the country to another in two days for 60 cents. Not a bad effort, really (See Australia Post – our dead letter office, April 13).
But in the internet space Australian Post should be cleaning up, and it isn't. Firstly it can issue money orders, this right, plus offering debit cards, plus distribution system, combined with an escrow system would make it the most efficient and trusted party for online purchases and delivery, for both consumers and suppliers. Why can't AusPost just build this?
Australia Post is not burning money, is well run and has contracted out much of its activities (See Australia Post – our dead letter office, April 13). Compared to NZ Post, there is little difference (besides higher prices for the privatised entity).
Its major weakness is a failure to deliver a Forex/Paypal type operation - probably because it has non-compete clauses for its banking operations.
It missed the boat on reselling mobile phone plans, but that may be because it was marginal.
It needs long hour superstores, and needs to lower international postage rates to equalise flow for online sales going out (hence its own paypal like opportunity).