Analysis

New Yodel CEO: Building a consumer brand is not the priority

September saw retail and logistics industry veteran Mike Hancox take the helm at parcel delivery company Yodel. He is hoping his wide-ranging CV, including time at Yodel’s predecessor White Arrow Parcels, Hermes and several retailers will help him to start delivering profits at the carrier.

“What I bring is not just a long history in the parcel delivery industry but also knowledge of what is required as a retailer,” Hancox tells eDelivery.

He says he has taken on a “tough job”, highlighting how Yodel has not been delivering strong financial figures despite the strong growth in the ecommerce market. Although he doesn’t share specific figures, he says he wants to begin announcing a quarterly profit.

When taking the job, he admits he was concerned about negative perceptions of the company. Hancox says that taking the reins has been a “pleasant surprise”, claiming the company has “record levels of customer service”.

“I would say we have kept it a secret; we’ve not wanted to raise our heads above the parapet to announce how well we’ve been doing.”

He says operational metrics are all “excellent” and this is starting to come through in financial metrics. He says he is mainly focused on “getting us across the line to declare us a profitable business.”

What does this profitability mission entail? Firstly there is reducing the cost per parcel, largely through automation and new IT systems, which he says will mean several hundred fewer people working at Yodel during peak period.

Secondly there is increasing revenue per parcel, which will partly be done through price rises but mainly through what Hancox calls “charging the appropriate rate”.

Hancox says there is great flexibility in the network compared to competitors, meaning it can ship a large of differently sized items. He says weight has not always been accurately captured as parcels go into the network, meaning that Yodel has been undercharging.

“When we demonstrate we are undercharging [our customers] are quite accepting of us charging the right rate.”

Assuming that Hancox is successful in achieving profitability, where will this revitalised Yodel fit into the market? Hancox differs from the school of thought espoused by DPD and Hermes: that carriers should have their own connection with the customer. DPD, for example, last December boasted 1.2 million active users of its mobile app during the month.

Part of his initial to-do list has been benchmarking how Yodel sits alongside competitors; for example, seven-day delivery is not something it can compete on.

Hancox sees Yodel as fundamentally a B2B brand.

“Building a consumer brand is a long-term job.

“When you get to the end-customer, they’re not so much selecting based on carrier brand; it’s convenience that they want instead.”

Even for a brand that is not “consumer-facing”, customer perceptions matter. A MoneySavingExpert poll last year found Yodel getting a great or ok rating from 46% of respondents compared to 54% saying it was poor.

However, Hancox says the company’s reputation has notably improved in terms of TrustPilot ratings, customer satisfaction scores and net promoter scores.

“You look at the recent history and Yodel is certainly on par with other carriers.

“I don’t believe there is a massive negative attached to the Yodel brand.”

Yodel has invested in a more carrier-agnostic route with its Xperience technology. This offers an API to retailers so that they can display order information and delivery and returns tracking information on their site. However, it is not a multi-brand solution.

Hancox says the company has no interest in extending this agnostic approach to the company’s vehicles, however. As an example, electric vehicle delivery company Gnewt Cargo features the ASOS brand on some of its vehicles.

“This is a discussion I’ve come across many times; it always results in more problems than it’s worth.

“Many years ago with Parcelnet (which later rebranded as Hermes) one of our big customers was Next. We had a discussion about Next branding on Parcelnet vehicles, but what message does that send? It suggests you’re prioritising that retailer and there is a commercial discussion over the advertising.”

Ultimately, the goal is to build a reputation as “a high-quality service at a fair price with a range of options that suit different retailers, whatever that is.”

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