When Neopost S.A., headquartered in Europe, became the parent company of two key players in the American mailing systems industry, insiders wondered how Neopost, Inc. and Hasler, Inc. would coexist in a market where they had been strong competitors. It has been just over a year since the two became sister companies, and they have found that, while the relationship remains competitive, having a common parent has created opportunities for real growth.
The two companies face the challenge of finding the best way to take advantage of the benefits of having a common parent while at the same time conducting their separate businesses, conceiving and implementing their own business plans, promoting their own identities and competing in the marketplace.
Individual Strategies
Both companies continue to create their own strategies within their parent company's broad strategic guidelines. They independently define which market segments they choose to emphasize and determine distinct and differing infrastructures needed to support their strategies.
Neopost, Inc. viewed the new situation as a reason to make significant internal changes. In the past year, the company revamped its branch operations to put more power and support in the field. It increased business support for major accounts and for government and document-handling customers. The company also focused on the dealer side of the business to establish better relationships and to differentiate the types of programs and support its dealers needed. As part of its support efforts, the company moved all training, with the exception of technical, to its headquarters in Hayward, California, and created Neopost University to offer product and management training to employees and dealers alike.
To Scot Stern, president and CEO of Neopost, Inc., the infrastructure changes were only the beginning. "If you asked me the most important challenge we faced, I'd say it was the cultural change. We're now initiative-driven. We're targeting initiatives to make our customers feel better about us, to make our branches, our employees and our dealers feel better about us and, most importantly, to become a bigger force in how we promote the product line. People are responding to that."
For Hasler, Inc. company president and CEO John Vavra, having a new owner was like starting with a clean slate. "The opportunities are just tremendous. Our growth projections from last year to this year are double-digit. We now have a parent company that is supportive of our growth and is dedicated to the mailing and shipping industry at a time when the market opportunity is huge."
Both companies have chosen strategies that are intensely customer-focused. "It all starts with the customer," says Stern. "We are putting a lot of effort toward restructuring technical service. The changes in our infrastructure improve customer satisfaction, customer choice and the most important aspect customer communication."
"'Customers come first' is our company-wide commitment to customer service," Vavra explains. "Prior to last year, we had five separate departments that a customer or dealer might need to go through to get an answer to the question. We now have customer care teams where customers can get all of the information they need with one call. We hope to do more in the future.
A Will to Succeed
While the individual companies focused internally on their strategies, the parent company looked for general policy directives to optimize the quality of services and create cost savings both companies could share. According to Patrick Nangle, chief operating officer of Neopost, S.A., responsible for its businesses in North America and Japan, "We're looking at all parts of the business that don't impact the separate market positions of the two companies. We have examined broad strategies to assist both companies in their respective efforts to reduce their operating costs."
The result is the creation of a new company, Mailroom Services Inc. (MSI). Neopost, Inc. and Hasler, Inc. can now elect to effectively outsource some of their operational activities to MSI at significant cost savings. MSI includes a new logistics center in Memphis, Tennessee, for warehousing and distribution, a single meter repair facility and a financial services operation.
Stern already sees the benefit that MSI is bringing. "We're able to focus our business on our customers, and we're moving away from some of the mundane sides of our business that we had to put a lot of effort into before. We're clearly resource rich as a result of synergies."
Nangle also explains that a lot of work has been done to organize a research and development support team on a global basis. "That's been done very quickly and I would say very successfully. Mailroom Technologies, Inc. (MTI) was created to house the US-based members of the global research and development group. MTI provides an important research and development capability in the US with an emphasis on the needs of the American market. This allows the two companies to focus intensively on marketing, sales, after-sales support and distribution."
Nangle is excited by the possibilities this presents as the two companies move forward. "The Hasler acquisition has facilitated bringing innovative products to market more quickly. The consolidation of research and development functions on a global basis enables far more research and development investment than either company could support individually."
"Since the acquisition, Hasler, Inc. has launched 22 new products in 2002 and five to date in 2003 with more in the pipeline," says Vavra. "We've never seen this type of investment in product introductions in the history of the company. We are now able to provide a wide variety of products to meet our customers' varied needs. I think this is by far the most important benefit to the industry."
The two companies also see new efficiencies as a definite bonus in each of their ongoing partnerships with the U.S. Postal Service. Nangle is quick to point out that "Neopost, Inc. and Hasler, Inc. keep the Postal Service aware of what they're doing and try to find a convergence of their abilities and the Postal Service's needs as they strive to achieve mutual goals."
Competitive Clout
While many companies that experience such far-reaching changes need time to find their competitive footing, the two companies have each been energized by the opportunities their changes have created.
According to Nangle, "The most interesting change in the past year is the ability to put a range of state-of-the-art products in the hands of both companies. Both companies now offer a full complement of products from the low to the high end in mailing machines and folding and inserting machines. It makes both companies much more competitive against other industry participants. If the two companies can each combine the will to succeed with the right products, then they can certainly enhance their respective abilities to more effectively compete in the marketplace."
The companies also see a benefit from the competition between themselves. They now strive to compete more on customer satisfaction and customer service than simply on product. Nangle is impressed by the opportunities this competition will create. "Having a more focused approach, a better understanding of customers in a more defined segmentation and then addressing specific customer needs is what will put power behind the brands."
Creating Market Awareness
"Market awareness is probably the biggest challenge they face they have the products, and they have motivated people. But the two companies are not known enough in the marketplace. I'm really encouraging these two companies to promote their separate identities and build their brands," says Nangle. "I want them to have a firm understanding of who they are and how they want to present themselves, and then take that message to the market. They have great products, and they have highly motivated people. Now they need to tell the world."
Vavra shares the enthusiasm. "Because most of the marketplace needs to change to new mailing technology, more customers are faced with critical buying decisions. I think we are in the perfect position to help them choose our products. I believe we're each going to keep our customers; the question is: How many of the other competitors' customers are we going to gain?"
Carol Rugh is a freelance writer. For additional information on Neopost, Inc., contact the company by phone at 888-Neopost or visit www.neopostinc.com. For additional information on Hasler, Inc., call 800-243-6275 or visit www.haslerinc.com.
