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

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


PostComm, the new regulatory body, is emphasising the virtues of


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


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


'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


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


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


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


'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


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.

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