Andy Barret – Director of marketing, DHL

Five years ago Andy Barrett’s job did not exist. Nor did DHL Global Mail – the company he works for. Today it is one of 15 postal operators vying for a piece of the £6.5 billion postal market – a market that Royal Mail had a complete monopoly over for 350 years.

Postcomm, the regulator, opened up the market for full competition on 1 January 2006 thus allowing licensed operators to collect and deliver mail from single letters to bulk mailings. In other words do what Royal Mail does, though they would argue better and cheaper.

Barrett took up his position of marketing director in January 2003 – three years exactly before the market was fully deregulated. The first year was shrouded in ambiguity, “During 2003 there was a lot of uncertainty about how the market would open up. Royal Mail was saying that deregulation would destroy it.”

Consignia, the company that ran Royal Mail, predicted it would be “death by a thousand cuts”. Other critics emerged, including politicians and unions, who prophesied the demise of the rural post office and thousands of job losses. Barrett recalls the early days, “At some points we were really thinking ‘how attractive is this market going to be?’ We were unsure about the margins we’d make and unsure how well it would be protected if Royal Mail reacted in different ways.”

It only became real at the beginning of 2004 when Royal Mail’s first access agreement was signed with UK Mail, allowing mail it had collected and sorted to be fed into its network for final delivery. DHL Global Mail signed in April 2004.

This cast away any lingering doubts. Barrett and his team could now focus on the formidable task at hand.

 

Full deregulation was scheduled for mid-2007 but Postcomm brought this forward to the beginning of this year. (The justification was Royal Mail’s financial performance had improved and Postcomm felt it was in a position to withstand competition in a fully liberalised market.) With 15 months less preparation time in the stalls, Barrett had to hit the ground running.

Before entering the free market he had to get one small matter out of the way first – a rebrand. Deutsche Post Global Mail was not a well known brand in the UK mail market; DHL, on the other hand, is synonymous with getting things from A to B. And since Deutsche Post World Net owns DHL Express it made perfect sense to leverage its power.

“The DHL brand is very strong – using it gave a lot of credibility and it removed the barriers,” Barrett adds.

But he had to redirect its power first of all. “DHL Express is known for couriers and containerships, for delivering to the North Pole and the Tropics – this is great for the courier part but it’s irrelevant to someone who wants to send a mailshot from London to Manchester.”

A trade press campaign running across all of the crucial verticals – marketing, publishing, mail order, telecoms and financial services – was executed. The message was simple: ‘You know us for parcels and express’, then turn the page to, ‘Welcome to mail’ under an envelope icon. The use of the yellow and red made clear the links with DHL.

Barrett says, “The marketing is focused on clear mail symbolism – everything uses the envelope icon. This ensures that people know it’s the mail side of DHL.”

The rebrand project took six months and it was a case of all hands on deck. Barrett’s team of two marketing managers and an exec were helped out by a work experience girl doing a two month internship. Of the latter’s contribution he says, “She was great. She identified all of the assets that needed to be rebranded and took the new guidelines to the suppliers.”

This was not Barrett’s first rebrand. Three years prior he was involved in the transformation of One 2 One to T-Mobile. “One 2 One was bought by Deutsche Telekom who already had a mobile arm called T-Mobile so we created a single brand.” Heading up the business marketing side Barrett opines that this change was perfect from his point of view, “One 2 One had this classical consumer association but T-Mobile was much more neutral.”

On T-Mobile’s current position in the marketplace he says that it is fighting in a very difficult battle against market leaders Vodafone, O2 and Orange. “Looking at the figures now T-Mobile is still in fourth place, the status quo is still the same.”

 

Static is most certainly not an adjective the observer would use to describe the current state of the UK mail market. Royal Mail’s share is over 95 per cent but with intense competition coming from DHL Global Mail, TNT Mail, UK Mail and DX Services this is sure to wane. The serious contenders are fighting for second place in a multi-billion pound market, as such every move is significant.

Like a chess grand master DHL has been playing a strategic game – one with no end in sight yet. “We’re not about winning now but winning over a long period,” Barrett says, “the competition probably thought ‘it’s taken DHL a while to get going – they mustn’t be serious.’” But the opposite is true – DHL has been deadly serious – especially when it came to building the IT infrastructure which will ultimately run this 21 century post office. “Every piece of mail is barcoded, every mail bag is barcoded and every single minute we take a snap of where the van is, using GPS. It took four months to get this in place, we had to make sure it all worked otherwise we would have damaged the industry and our relationship with the customer.”

The customer. Who is the customer? Think about it, do you know who takes care of the post in your company? Who makes a decision on post? Difficult to say. Barrett points out that as a result of Royal Mail’s 350 year monopoly, mail became a forgotten thing – something that just happened. Amongst his targets he sometimes finds an attitude of, ‘Nobody’s spoken to me about it, it looks a bit techy – is it really relevant to me?’

“We’re aiming to bring mail back into the business process. The sales team are out there talking to marketing managers about their DM campaigns. We can give definite day delivery so they can plan everything around it – the call centres can get on the phone when it hits, the sales people can relate to it.”

Essentially it’s about offering more than a collection and delivery service and it’s about differentiating in ways other than price. It is, to use that hackneyed phrase, about ‘adding value’.

 

Adding value applies to marketing as much as it does to other parts of the business including finance, where delays in invoicing can cost a business thousands. So what are the best ways to market to this diverse audience? “The obvious elements work but it’s about getting the mix right. This is a virgin market – how do we communicate? We need to get a lot of understanding to know what the right blend is.” Barrett describes his approach to date as a “controlled experiment” and so far the results are encouraging.

Last year he ran an email campaign targeting B2B publishers in London. “It was a cold list, we sent three emails over two weeks. We set a target of three per cent and achieved that in the first two hours.” He smiles, “we’re looking to do something similar again.”

Then there was the DM Show in November where DHL Global Mail sponsored the café/bar area – a “damn expensive” activity but one which may be very rewarding. “We captured something like 250 leads and got information like the value of their B2B mailings, how much international mail they send and how they pay. This unearthed a huge amount of potential but now we’ve really got to work it.”

But the biggest experiment is happening this month with a DM campaign going out to 55,000 targets in the mail order, marketing and publishing sectors. It’s a promotion offering recipients a product trial with 50 per cent off for one month and/or a free copy of the International DM book. “The objective is to get people to put their hand up and say ‘I’m interested’. Again we’re working off a cold list so it will have its limitations but the timing is perfect – people are looking for solutions.”

Royal Mail’s awareness campaign of its new pricing structure – PiP or Pricing in Proportion – kicked off in January, spurring people to think about their mail and potentially priming them to consider using a new operator. Barrett admits that if this wasn’t happening it might make his job a lot harder.

 

Anything that can ease the burden of his ‘to do list’ for 2006 is welcome. His objectives are to “solidify the proposition that DHL can handle 100 per cent of a company’s mail requirements,” “to be a long-term sustainable player”, oh, and to “break down the status quo [ie. Royal Mail’s 350 year monopoly]”.

He will work closely with the sales people at DHL Express, “we have to link in behind the scenes in order to get the best relationship with the customer and present one face.” In an effort to educate his Express colleagues Barrett and his team created a comic book-style hero called Globalman. “Using a comic format we were able to grab the attention of the target.” Ultimately he has to ensure that they are aware of the company’s new mail offering and that they are letting the customer know.

Perhaps in time he will be able to use such techniques on his own audience – the marketing will become more experimental and less controlled. For now though the objectives are clear and there’s little point in complicating them with fancy techniques.

In the future he predicts that the customer’s final choice will come down to brand – ‘who am I comfortable with?’ In which case Barrett flying the DHL colours will stand in good stead but then so too will Royal Mail in the trade mark red and don’t forget about TNT Mail in the orange corner.

Globalman has a battle on his hands – one which will be fought on uncharted ground against an ever growing army of enemies – but a battle worth fighting.

 

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