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Royal Mail gets green light on price rise

Economic challenges have forced many businesses and consumers to become more innovative in order to stretch dollars further. For companies, that has meant scaling back operations, using their resources more efficiently and reverting to lower-cost, higher-return tactics such as direct mail.

Other groups have had to pass their increased costs on to customers. Royal Mail recently announced that it would be increasing the cost of its First Class stamp from 46 pence to 60p, a move it says was necessary for preserving the viability of its universal postal service, Neil Maidment writes for Reuters.

"We know how hard it is for households and businesses when our economy is as tough as it is now," said Moya Greene, Royal Mail CEO, in a statement. "No one likes to raise prices in the current economic climate but, regretfully, we have no option."

Greene added that Royal Mail retains its position as one of the top European postal services with the "lowest prices for both consumers and business."

In the statement, Royal Mail noted that it would also continue its efforts to be more efficient while also cutting costs, a process that can sometimes be painful. 

Following the announcement, mailroom equipment provider Neopost issued a statement reminding small businesses that transferring from using stamps in their direct marketing campaigns to franked mail could provide discounts and cost savings. As the company noted, franking can be up to 39 percent less expensive than stamps, particularly when sending high volumes of mail.

"Royal Mail wants to support businesses with cost-effective postal solutions during this period of economic uncertainty," Neopost observed. It added that with franked mail prices remaining low, companies can increase their mailing volumes, which may generate more business.

Organisations can make their mail operations even more cost-effective by devoting more time to list cleansing and keeping their customer contact databases clear of errors, duplications and outdated entries. If companies are more precise when launching a mailing blitz, their response rates and returns on the investment can be driven higher.

The Direct Marketing Association also responded to the announcement, with chief of operations Mike Lordan saying the group hoped Royal Mail would be responsible with its new commercial freedom "by consulting and listening to its customer before it implements any changes."

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