Businessmodel of Pitney Bowes

Customer Segments

Pitney Bowes has a mass market business model, with no significant differences between customers. The company targets its offerings at organizations of all sizes and industries.

Value Proposition

Pitney Bowes offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by offering a wide variety of options. Since 2000 it has completed over 83 acquisitions, mostly of services and software businesses, investing $2.5 billion. These additions have enabled it to integrate many new capabilities into its portfolio.

The company has embraced innovation throughout its history. It is responsible for many industry firsts, including the following:

• Introduction of the AddressRight address & barcode printer
• The first in-line weighing and metering system
• The first secure digital postage meter
• The first ink jet postage meter
• Introduction of the Digital Document Deliver (D3) platform, which enables message management via the Internet, e-mail, fax, or hard copy The company has established a powerful brand as a result of its success. It bills itself as the largest manufacturer of postage meters, with 85% of the U.S. market and 60% of the world market. It has over 1.5 million customers in 100 countries, and its client firms include 90% of the Fortune 500. Lastly, it has won many honors, including recognition as one of the “Best Companies to Work for in India“ by The Economic Times and one of the“Best Large Employers“ by *Forbes *(both 2016).

Channels

Pitney Bowes’ main channels are its direct and inside sales teams, independent dealers and distributors, and website. The company promotes its offering through its social media pages, direct mailings, telemarketing, advertising, trade shows, and conferences.

Customer Relationships

Pitney Bowes’ customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees. The company’s website includes product tips, answers to frequently asked questions, and an option for customers to monitor their service through an online account. That said, there is a personal assistance component in the form of phone, e-mail, online, and on-site support.

Key Activities

Pitney Bowes’ business model entails designing and developing its products and services for customers. It relies on third-parties for product manufacturing as well as a variety of components, supplies, and services.

Key Partners

Pitney Bowes maintains the following types of partnerships:

Systems Integrators and Alliances – Firms that offer consulting and other services to the company’s clients

Technology and OEM Partners – Firms that integrate the company’s solutions into their platform or service offerings

Resellers – Firms that purchase the company’s solutions and sell them to their clients

Specific partners include NetSuite, Mapping Solutions, DataSource Technology, and Crossbow.

Pitney Bowes also invites developers to use its APIs to create their own eCommerce applications.

Key Resources

Pitney Bowes’ main resources are its human resources, who include technology staff that design and develop its offerings, sales/marketing staff that promote them, and customer service staff that provide support. It also places a high priority on intellectual property, with 3,500 patents worldwide in areas such as cell phone payment, ticketing, shipping, encryption, laser printing, and mail production and processing. In fact, it has been regularly ranked as one of the top 200 firms receiving U.S. patents by the Intellectual Property Owners (IPO) Association.

Cost Structure

Pitney Bowes has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is sales/administration, a fixed cost. Other major drivers are in the areas of cost of business services, cost of equipment sales, and cost of support services, all variable expenses.

Revenue Streams

Pitney Bowes has four revenue streams:

Product Sales – Revenue generated from sales of equipment, supplies, and software

Rentals – Revenue generated from the rental of equipment such as postage meters and mailing equipment, as well as from subscriptions for digital meter services

Financing – Revenue generated from lease financing for products (mainly through sales-type leases) and revolving lines of credit for the purchase of postage and supplies

Service Sales – Revenue generated from the sale of support (e.g., maintenance) and business services (presort mail services, shipping solutions, and global ecommerce solutions)