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Pitney Bowes (PB) opened its annual technology summit (Twitter: #TechSummit12) with a review of its organizational assets and its rich history of engineering hardware and systems for physical and now digital delivery of communications. The multibillion-dollar technology giant is transforming itself to address the digital needs of business for interaction with consumers. It also is working to transform how business communications and interactions work across all channels. Handling new media interactions using Facebook, Twitter, e-commerce and mobile technologies are critical to managing communications in a consistent manner and improving the customer experience.

Over the last several years Pitney Bowes has advanced its business through acquisitions and the integration of its own software into its traditional areas of business. It also has further integrated its software efforts to emphasize that it is not primarily a mail-related hardware company. The company reports that its software revenue is $407 million and that it invests 15 percent of overall corporate revenue into software. It also is investing in growth initiatives to expand its presence into markets where it does not currently operate.

Pitney Bowes CEO Murray Martin discussed the company’s philosophy of helping its clients develop value in lifetime relationships with their own customers through communications management. It does this by providing profiling and segmentation, data preparation, multichannel response management and analytics. Martin explained that the days of businesses telling customers how to communicate with them are over. I agree that customers and consumers will take control of communication, and this means businesses must adapt, as the channels will not be predetermined but will change with customer preferences.

To help companies move ahead on this path, Pitney Bowes introduced Volly, which provides secure communications for digital billing and payment for customers and providers. It also takes advantage of mobile computing, with native applications for smartphones and tablets and the ability to get quick access to applications and information using customized QR codes. PB currently has more than 50 billers using the service.

Pitney Bowes has been improving its applications for helping organizations understand and act on customer communications more intelligently. It now has one of the most sophisticated sets of applications for increasing the value velocity of customer relationships. To accomplish this, PB has organized its software offerings into four areas. First, the data area includes a collection of data integration, quality and master data management capabilities to address the two top barriers to  information management according to our benchmark research: having data spread across systems and having multiple versions of the truth. In this area, location intelligence improves the quality of the information through geocoding, use of its Spectrum technology platform and partnerships with Experian to help enrich the data. The company has announced a new master data management (MDM) solution that does not take a traditional data-centric IT approach but is built for businesses that need to establish a consistent definition of customers and the social networks they operate within, and thus is more of a customer information management application. While MDM is an engaging topic and focus for IT, its time to value for businesses has not been short, as it requires a degree of data transformation.

The second area of its focus is insight, where the company can help with building strategies to better identify the direction of communications and interactions with customers through the use of customer analytics and location intelligence software.

The third area is strategy, where software can help define customer segments and direction to show where to focus to get the most value. This area is powered through business unit Portrait Software’s analytics and segmentation. PB recently released a new version of Portrait Explorer with a new user experience for assessing customers and segments. The new release simplifies ways to assess and understand customers and allows for enrichment of the data through its partnership with Experian. It uses predictive analytics, which our benchmark found is helping businesses take advantage of new revenue opportunities and increase profitability, among other benefits.

The fourth area is communications. Pitney Bowes helps users design and deploy communications across channels to improve customer dialogue. It offers multiple products in this area, including Portrait Interaction Optimizer and a new version of Pitney Bowes EngageOne that was announced in April. The EngageOne product provides a robust way to design templates for personalized interactions with customers and can manage interactions in a secure document vault.

Pitney Bowes is evolving the focus of customer communications management from transactions to marketing and customer service, and turning itself into a more strategic and analytics-driven software provider for this. By stratifying the message, method and relevancy of its efforts, it can articulate the value of its offerings. The company has a large potential market to tap; our benchmark research into customer relationship maturity found that marketing, customer service, sales and contact center are the most popular channels in more than half of organizations but are not necessarily where personalized interactions are occurring across multiple channels.

Pitney Bowes’ biggest challenge is not the market or its technology advancement but  communicating the value of its products through its website and social media channels. It will need to dramatically improve its marketing efforts to gain recognition for what is has developed and made available today.

If you are interested in an analytical, interactive approach to developing effective customer communications and interactions for improving the customer experience, consider the depth of the software Pitney Bowes provides. It is advancing the efficiency and outcomes of communications with customers, which is an area in which just about every organization has room for improvement.

Regards,

Mark Smith – CEO & Chief Research Officer

The Pitney Bowes Business Insight (PBBI) analyst summit and conference this week provided an opportunity to hear about the $5 billion technology provider’s strategy to become “the leader in customer communications.” This term makes sense when applied to a division of the company that brought the efficiency of the postal meter to mailrooms around the world. Of course a lot has changed for the company and for business since then. Today parent company Pitney Bowes envisions success in a future with limited or no print and mail business.

The trend away from postal mail and toward Internet-connected devices is clear. Pitney Bowes CEO Murray Martin explained how the company plans to capitalize on the new market dynamics. It has made strategic investments in software companies MapInfo, Group1 and recently Portrait Software. It has aligned its corporate focus with that of its Business Insights business unit – a difficult process that now seems to be bearing fruit. At the summit Martin outlined how Pitney Bowes can position its software, services and hardware to help customers with profiling, preparation, multichannel output, customer response management and analytics.

Pitney Bowes has used its technology to improve customer communications, which has led directly to $8 million in revenue to date, Martin said, with $66 million more projected in the next four years. Earlier this year the company unveiled Volly, an Internet-based digital delivery service designed to help businesses convert from physical direct mail to marketing messages that target smartphones and tablets. Volly helps eliminate the inefficiency of bulk print and mail, which is also anti-green and a poor corporate sustainability approach to customer communications. In addition, Pitney Bowes released pbSmartPostage to provide cloud-based postage and labeling to any PC with an Internet connection.

PBBI President John O’Hara outlined how the company’s software, information and services portfolio facilitates lifetime customer relationships. I would say that the outcomes of such is where business investment is made is in improving the customer experience which our benchmark research has found is a critical business priority. The company provides information and services to help organizations cleanse and enrich their customer information. This part of the business, built on the Spectrum Technology Platform, helps customers with information management and location intelligence. With the upcoming version 7, the product will provide better usability and support a range of address validation and other data cleansing, and enrich customer information with international geocoding for more than 90 countries. It will support a broader range of technology programming interfaces, including connections to applications like Oracle Siebel and SAP, and will offer localized versions of the application in French and Japanese.

At the core of PBBI’s customer communications portfolio is its customer analytics suite. As our customer analytics benchmark research found, improving the process and the analytic prowess of organizations is critical. PBBI advanced in this area through its acquisition of Portrait Software. My colleague Richard Snow assessed the value of predictive analytics in PBBI’s product line. Its suite of seven customer analytics applications helps organizations focus on acquisition, onboarding, growing, retaining and regaining customers. Unlike customer analytics tools that focus on historical analytics, the Portrait suite is built on a predictive analytics technology that can help users understand future outcomes. My colleague David Menninger has written about the importance of predictive analytics and why it is critical to look at both past performance and planned actions. Now PBBI can leverage its assets that use location intelligence and provide data integration and quality to expand its reach. Large organizations such as US Bank, Merrill Lynch, T-Mobile and Lloyds TSB already use PBBI’s customer analytics capabilities, giving PBBI a foundation to expand upon.

The PBBI portfolio also emphasizes location intelligence, which is a $200 million business led by new SVP and GM James Buckley. Location intelligence software, which we have researched extensively, supports a range of services that can be integrated into applications on smartphones and tablets. While the company’s MapInfo Professional brand continues to maintain a healthy base of customers, management sees the future of the product line as being part of the company’s larger focus on helping companies in customer communications.

I was surprised to hear fewer details than I heard at last year’s conference about integration of Location Intelligence with the rest of the company’s portfolio. This potential integration is clearly a large opportunity, but PBBI must more directly communicate why location is required for operating and analyzing customer communications, and how its software does it faster and better than applications without location intelligence.

SVP and GM Jay Bourland, who manages the technology that supports customer communications, spoke about the challenges in multichannel customer communications. Our benchmark research into contact center technology found customer communications to be changing dramatically, now handling up to more than a dozen types of communication. PBBI’s EngageOne Communication Suite supports this communication via batch, interactive, on-demand and shared services, with a WYSIWYG interface that provides capabilities from design to delivery of communications. is the company now is more clear about its part in the strategy than in previous years.

PB also sees the importance of providing consulting services to CMOs across industries. Four years ago the company acquired Digital Cement to help bring a relationship management team into the business. Optimizing customer relationships requires not just a good strategy but a good plan and good technology. With its deep direct-marketing expertise, PBBI can leverage other parts of the software portfolio to deliver results for marketing executives. The company boasts an impressive range of clients in this area, including Dell, Ford, J&J, Kraft and Samsung.

The day ended with Group Technology Officer Tim Shaw’s look at the future of customer communications. PB aims to help customers determine when and how they communicate with a business. Shaw says organizations must move beyond the transactional and promotional approach to understand why, when and where communications should engage with a customer. At that point, an organization can focus on differentiating its communications through an emotional approach where the point and passion of the interaction are blended. PB is investing in technology across this customer life cycle.

PBBI’s focus on the customer is a smart one, and unique in the industry. It leverages the company’s current business as it transitions into the future. Being a multibillion-dollar company with operations around the globe helps PB learn how customer communications should operate. With the ability to analyze and facilitate communications and interactions, PB can help organizations get smarter in many areas, including multichannel contact centers that operate across lines of business. My colleague Richard Snow has pointed out that businesses need to get smarter in contact centers by using smarter technology including multichannel customer interactions. PB must strategically engage business leaders from marketing and customer organizations to determine how to improve communications and analytics. Reaching out to customers and further investing into a partnering strategy that lets its technology interface with other applications should help further PB’s strategic importance in the business technology market.

Regards,

Mark Smith – CEO & Chief Research Officer

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