Pitney Bowes 2003 Annual Report Download - page 7

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signing up for its value-added services, including
access to Delivery Confirmation™ , Signature
Confirmation™ , Priority Mail®and Certified Mail™ .
•Our Small Business Solutions group remains a
major contributor to our revenue and profits,
thanks to its strong performance in customer
acquisition and retention, product management
and cross selling. At year-end, we had a customer
base of 825,000, representing a net increase of
100,000 small business customers since the
beginning of 2002. The growth in the customer
population has also driven small business
ancillary revenue to record highs. Our effective
use of new distribution channels, including
outbound telemarketing, direct mail, the Internet,
e-mail and co-marketing with partners like the
U.S. Postal Service and Sprint, is helping fuel
this success. With over 20 million small
businesses in the U.S., there is clearly room
for continued growth.
•Our Document Messaging Technologies business,
which provides high-end mail and document
systems for our largest corporate customers,
delivered its strongest six-month performance
in several years in the second half of 2003.
Among our strong portfolio of integrated mail
and document solutions, our APS™Series
Advanced Productivity System merits special
mention. This high-speed intelligent inserter
processes up to 22,000 mail pieces an hour and
can be integrated with the DFWorks™suite for
online management of all document processes.
RR Donnelley, the largest printer in North America,
for example, is using the APS™system to expand
its capacity and efficiency without adding floor
space. Each APS™system does the work
RR Donnelley previously needed up to three systems
to do.
Executing Our Growth Strategies
We made good progress in executing our growth
strategies in 2003, particularly in two areas —
expanding our participation in the mailstream
and better defining our areas of opportunity for
enterprise document management solutions.
• Mailstream Expansion
Mail will continue to be a vital component of the
communication flow for organizations of all sizes.
Our vision is to enhance the value of mail for all
users by making it more affordable, accessible,
information rich and secure. Both the U.S. Postal
Service’s 2002 Transformation Plan and the 2003
President’s Commission on the United States Postal
Service validate this vision for the future of mail.
We expect the report to be a catalyst for the
continued transformation of the mailing industry
on a number of fronts, including broader
partnerships with the private sector to promote
work-sharing discounts; increased retail access
to mail services; increased use of technology to
add value, reduce costs and enhance security;
and continued price stability coupled with
increased price flexibility.
It is in the context of this transformation that I
would like to discuss our strategy for mailstream
expansion.
We are expanding our participation in the
mailstream beyond solutions for sending out
First-Class, transactional business mail. Our
intent is to add value at every point in the mail
process and to more types of mail, such as
marketing mail and consumer-originated mail.
Two achievements in 2003 illustrate our success.
Our successful integration of PSI Group has made
us a leader in the $3.6 billion presort market, an
exciting new area for us. PSI Group consolidates
and presorts mail before it enters the U.S. Postal
Service mailstream, helping our customers earn
postage discounts and expediting delivery. We
have doubled the number of PSI Group presorting
facilities from 12 to 24 since the 2002 acquisition.
We are now processing about 6 billion pieces of
mail a year through our PSI Group network alone
— more than most national postal systems around
the world.
We also recently entered into an agreement
with eBay®to provide Internet postage services
for eBay users. You can learn about this exciting
alliance with eBay on page 11.