Spotlight – The last post?

Louise Cooper highlights the potential impact of Royal Mails introduction
of Pricing in Proportion next month.

Setting the price of postage according to the size of the letters we send is a concept that Royal Mail has pursued for some time in order to rebalance its prices in line with costs. Its not new, and is already employed worldwide in countries from Canada to Germany. After public consultation and being granted permission to make the change, Royal Mail plans to introduce Pricing in Proportion on 21 August this year. So, why is Royal Mail making this change?

In short, it costs Royal Mail more to sort, handle and deliver larger envelopes and lightweight packages. It wishes to introduce proportion into its prices so that it doesnt cost more to process mail than the price of the postage  which is currently the case with large, lightweight items of mail.

Focus on format

The changes will have an impact on all businesses  and arts organisations are no exception. At the very least, organisations will find that postal costs are likely to change (increasing or decreasing depending on activity) and many will need to start to consider changing mailing practices (packing newsletters in A5 envelopes rather than A4, for instance).

A simple six-step evaluation can help arts organisations to re-assess their postage procedures in the light of the changing cost structure:

1. What services does the organisation use? (standard, franking, mailsort, etc.)
2. How much of each type of mail is currently sent per week/month?
3. What changes can be made to stationery format?
4. What practical changes can be made to mail formats?
5. What changes can/should be made to stationery supplies/ordering?
6. What staff training is necessary to facilitate the changes?

Proper preparation

There will be winners and losers financially due to these changes, but Royal Mail are offering compensation packages for larger users only. There will be no specific mitigation for small and medium enterprises, nor will there be any legal requirement on Royal Mail to provide mitigation as a result of the impact these changes may have on some businesses. Businesses that arent larger users need to be well informed and prepared.

The good news is that users of ordinary stamped mail will not be penalised for genuine underpayment mistakes for an, as yet, unspecified period. Furthermore, 70% of business mail will remain unaffected by the move. And of the remaining 30%, some will actually see a reduction in their prices. And if prices are set to rise, in some instances it may be possible to avoid the increased costs by, for example, folding the A4 item to A5.

When the new size- and weight-based pricing comes into effect, mail will fit into one of three categories: letters, large letters and packets.

” Letters will include most letters, postcards, greetings cards, bills and statements and some brochures and catalogues. Letters will be up to A5 size, 5mm in thickness and 0100g in weight (an increase on the current standard letter format of 60g in weight).
” Large letters will include most brochures, catalogues, company reports, magazines, CDs and DVDs. Large letters will not exceed 353mm x 250mm in size (which is slightly larger than standard A4 paper) and 25mm in thickness.
” Packets will include VHS cassettes, books, some magazines and catalogues, parts and samples, foodstuffs, prints and posters in cylindrical packaging. Packets will be any item longer than 353mm or wider than 250mm or thicker than 25mm or heavier than 750g.

The maximum weight allowed for Second Class items will increase from the current 750g limit to 1kg, though the maximum weight allowed for First Class items will remain 20kg. Royal Mail have an easy-to-use calculator on its website, if you would like to know what impact pricing in proportion will have on the cost of your mailings.

Opportunities

These changes could present opportunities for arts marketers. Marketing has always needed a balance between creative ideas and costs. The new classifications for mail have more generous weight allowances, so if youve got more to say, youll be able to add extra pages or items to make your mail stand out, or use a better paper stock to print on  without adding to the postage cost. If the changes are managed well, many arts organisations could benefit from pricing in proportion.

Louise Cooper is Sales and Marketing Director of Nationwide Mailing which provides help and advice on Royal Mail services. t: 01733 372690;
e: [email protected]