There are many synergies that exist to justify a deeper partnership between Posts and government entities. A common history and understanding of government functions and processes can help accelerate the partnership, but what is it that truly makes this a profitable endeavor for Posts to consider? The primary opportunity lies with Posts being able to diversify their revenue streams with government services. From a competition standpoint, Posts are already viewed by customers as a trusted intermediary and the size and scale of their existing operations give Posts a unique advantage that can’t be easily replicated by other industry peers. But perhaps most important, the technology foundation that Posts put in place to offer government services, opens the door for Posts to easily diversify into other more lucrative opportunities such as financial services like banking and insurance products. In this blog post, we’ll explore the topic of how posts can diversify their revenue base by offering government services.
Government services that Posts can offer to their customers includes licenses, social assistance or welfare, passports, bill payments, property taxes, and many more. And as we just mentioned, the foundation for these services opens up the opportunity to offer more lucrative financial services products such as insurance, chequing and current accounts, savings accounts, loans and lines of credit, credit cards, mortgages, money transfers and foreign currency exchanges.
This model has worked well for many Posts. For example, a postal operator in Europe offers a variety of government services in addition to several financial and insurance products. This has clearly helped the Post diversify its service revenue. It also enhances the customer experience as well since customers can now take care of a wider variety of day-to-day services from the convenience of one provider or location. In effect, this Post has created a “one-stop-shop” for its customers.
Is diversifying services the best way for Posts to increase revenues? We believe that in many cases, the answer is yes. It has been noted that there are three ways for a Post today, to boost their revenues. The first is a price increase, but when prices are increased with no increase in value to the consumer, this leads to customer dissatisfaction and in many cases will drive customers to the competition. The second option is to fully embrace parcels. And while this will continue to be a growing segment of the market for years to come, it also has attracted many market participants so the increased competition will also add increasing pressure on profit margins for all. The third option is to diversify the services your Post offers, and we believe the best way to do this is to begin with Government services. Then with that foundation in place, Posts can then move into offering financial services.
For many Posts, offering additional services will be the best path forward – the best way for Posts to increase revenues and profitability. And many Posts are doing this successfully with Escher’s customer engagement platform, offering traditional post office services, government, and financial services from the same single Riposte platform.
If we look back at what has been a successful business model in the recent past, we could say that Posts that have maintained a customer-centric view, have for the most part, been successful. These Post have been able to pivot quickly, adapt to evolving customer preferences, leveraging technology to do so. These Posts have been able to engage customers anywhere, anytime across many different channels and physical locations such as counter, kiosk, mobile, and PUDO locations, offering modes of engagement suited to the customer’s preference.
While this business model will continue to serve Posts and their customers well into the future, Posts additionally need to now transition from being a physical aggregator of services to being an online or digital aggregator of services. By taking this approach, Posts don’t need to be tethered to any physical location or unit and enable customers to engage with them in a truly “anywhere, anytime” way online through the Post’s portal or mobile app.
Laying the groundwork for adding government services to a Post’s offering, leads to the ability to then offer financial services with even greater profit margins. Together, these additional services will help increase revenue across the postal network. However, one thing the pandemic did was accelerate the need for digitization of services. So offering postal services, government, and financial services is the right way forward, but traditionally these have been “bound” to physical channels or touchpoints. The modern postal operator, needs to provide access to all services (postal, government, and financial) online through a portal or mobile app as well. We architected the Riposte customer engagement platform to be available anywhere, anytime on any channel, device, location, or online access point including any mobile device – in short, to enable Posts to move from being physical aggregators of services to online aggregators of services.
For Posts that wish to increase revenue and profitability in a sustained way, we believe the best path forward is to begin offering government services. With that foundation in place, Posts will then be in a position to offer a range of financial service products which come with higher revenue potential and profit margins. A parallel initiative Posts need to move forward with now, is making the move from being a physical aggregator to a digital aggregator of services. This will enable Posts to provide online access to all government, financial, and postal services previously only available through their physical channels. This is where the market is heading today and the team at Escher can help you achieve this. Book your demo now.