A controversial question perhaps but one aspect that is sure to affect mail order companies, internet based retailers and in fact anyone posting packets in the UK has been very much overlooked!

This being the removal of the 100g, 250g and 500g packet tiers. From the end of April there will be a single initial 750g packet threshold which is going to add heavily to the postage costs for small items. In many cases posting small and light packets using Royal Mail will become non-cost effective.

Campaigners across the UK have slammed Royal Mail price rises, which they agree will be bad for business. Industry regulator Ofcom announced it would relinquish the power to set stamp prices to Royal Mail, which immediately responded by hiking the price of first-class stamps by 30 per cent from 46p to 60p. Second-class stamps will rise 38 per cent, from 36p to 50p. The changes come into effect on April 30. However the impact on packet costs has been largely over-looked.

Currently (up until the end of April 2012) the Royal Mail Packet thresholds and costs are as follows:

• Packets up to 100g – £1.58
• Packets up to 250g – £1.96
• Packets up to 500g – £2.48
• Packets up to 750g – £3.05

From 3oth April the very first tier will be 750g at a cost of £2.70 and whilst the cost of a 750gram packet is reducing by 35p the increase for the smaller, lighter packets is very significant indeed.

• Packets up to 100g – increase of £1.12 (71%)
• Packets up to 250g - increase of 74p (38%)
• Packets up to 500g - increase of 22p (9%)
• Packets up to 750g – reduction of 35p

Whilst this will simplify matters for Royal Mail and reduce their workload in checking weights of packets this represents a significant increase on postage costs which unfortunately must be borne by small business and consumers alike. It puts the 14p increase in a first class stamp into perspective and whilst this increase is significant in itself, many will agree that for a manually intensive business the service and performance of Royal Mail is generally very good.

However, the treatment of packet costs has been hidden in the small print but this could have a massive impact on businesses already squeezed by reduced margins and the economic problems we all face.

Companies like the retail giant Amazon will certainly be able to accommodate the changes without a major problem as they attract the best postal discounts available. However, the small to medium sized company that posts large volumes of packets will have to address the impact on postal increases up to 71 percent!

Royal Mail, which the government plans to privatise, said the move was necessary because its core business was loss-making due to artificially low prices and less mail being delivered to an increasing number of addresses. Steve Leach, Royal Mail’s north west operations director, said: “We are not relying on price rises alone to restore Royal Mail’s financial viability. We’re modernising our operations as fast as we can.

However, John Walker, chairman of the Blackpool-based Federation of Small Businesses, said: “Rapidly raising stamp prices now will be bad for business. ”With small businesses and consumers being hit by other rising costs, this has come in at a time when they can ill-afford it.”

We agree but lets not forget that the increases are as high as 71% - Shame on you Royal Mail!

Over three quarters (79%) of respondents said that their marketing departments were responsible for social media.

This suggests that companies are confident with marketing-led social media use but are nervous about operationally led activity.

Many companies are wary of the potential for public relations disasters, according to the report.

But they are monitoring social networking sites extensively. Facebook and Twitter are the most monitored platforms, at 85% and 76% respectively.

And, 81% of respondents said their call centres responded to social media complaints. Almost half (43%) said they almost always respond to complaints.

Anecdotal evidence shows that Twitter is popular with call centres. One customer service director told callcentrehelper.com: “I love Twitter because it forces customers to get to the heart of the complaint… it forces the business to reply similarly, so what you get is two posts that people take a question and answer from.”

Training is an issue as call centres need to have the right written skills to deal with customers on social media. One contact centre manager has found that some agents use text speak when talking to customers on Twitter, which isn’t always appropriate.

Source – DMA

Some 600 customers had cards debited twice, at an average of £50 each time, after repeating a purchase which the system told them had initially failed. Various online postage applications – such as Price Finder – have been down since 21 November.

Royal Mail apologised for the pre-Christmas difficulties.

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A week ago, the BBC News website revealed how small businesses and people starting to send Christmas cards and presents had faced problems on the Royal Mail website.

The Price Finder page – which calculates postal costs of packages based on size and weight – has been closed due to “technical difficulties”. Online stamp buying, redirection and redelivery services were also affected on occasions. A Royal Mail spokesman said that the shutdown had been caused by a shift of online services to a new server. The entire website closed for a short period on Wednesday evening.

Now, Royal Mail and Capgemini, which manages the Royal Mail website, have admitted to charging problems owing to the technical issues.

The problems surround the SmartStamp and Online Postage sections of the website. Customers who have been charged twice will be refunded and receive a “goodwill payment” of £25. The maximum amount charged wrongly in a single transaction was £200, a spokesman said.

Disruption

Some customers who have paid for postage online have found that this has not printed out onto envelopes. Others have found that top-ups to their pre-pay account cannot be seen on the screen.

“Royal Mail and Capgemini would like to sincerely apologise for the disruption at this key time of the year for our customers,” said chief executives Moya Greene and Paul Hermelin in a statement.

“We do really appreciate the level of inconvenience this is causing some of our SmartStamp and Online Postage customers.”

No estimate was made as to when the service would be back in order.

One angry customer is Iain Campbell, 51, who runs a mail order children’s clothing business with his wife in St Helens. He said they were being forced to write out addresses on packages by hand at the busiest time of the year, were having to rely on post office staff getting pricing correct, and international orders were proving difficult. ”About 75% of our business is done in the last two or three months of the year,” he told the BBC News website. ”Why did they have to work on the website at Christmas, rather than in January when it is quieter?”

 Source: BBC News

The comments follow a high-level summit of business mail users, postal service providers, senior marketers and industry trade associations, which was hosted by the DMA to address industry concerns about the current Ofcom public consultation on a raft of controversial changes to postal regulations to boost Royal Mail’s profitability.

Companies that use mail for sending customer bills or statements have already been squeezed by a 15%-20% price increase this year on the cost of transactional bulk mail services. Many have indicated they plan to withdraw from using mail if Royal Mail takes advantage of its new commercial freedom to impose another round of large price increases.

Commercial bulk mail users represent Royal Mail’s biggest customers and underwrite the cost of an affordable Universal Service.

Last month Ofcom, the new postal regulator, launched the public consultation about how postal services should be regulated over the next seven years. The proposals include continuing to allow access to Royal Mail’s network for competitors, monitoring Royal Mail’s price margins to prevent unfair treatment of competitors, and removing price controls to give Royal Mail the ability to set the cost of their retail products.

Concerns about the potential impact of these changes prompted the DMA and the Postal Trade Association Forum to convene a summit for businesses and organisations affected by the proposals. Representatives at the summit reached agreement on a number of critical points in responding to the consultation. As well as voicing fears about the potential for abuse of market dominance and threats to competition, all doubted the projections for future mail volumes and Royal Mail’s ability to meet efficiency and cost reduction targets particularly in light of current economic forecasts.

Commenting on the outcome of the summit, Mike Lordan, chief of operations for the DMA, said:

“The proposed changes to postal regulations set out in the public consultation are clearly intended to make Royal Mail an attractive proposition for investors. However, we believe there’s a danger that the Government has gone too far in its plans to prepare Royal Mail for sale to the private sector.

“We called the postal summit to coordinate an industry-wide reply to the Ofcom public consultation because we want to see a healthy and vibrant Royal Mail. The businesses and organisations we’ve spoken to are in complete agreement that some of the proposed changes to postal regulation could be hugely damaging to the long-term prospects of transactional and advertising mail.

“Granting a monopoly the ability to raise its prices without adequate safeguards is very dangerous and could drive more and more businesses away from mail, which is concerning as mail volumes are already declining year on year.”

The DMA is currently canvassing opinions from its members for use in its official response to the Ofcom consultation, which closes on 5 January.

Source: DMA

Contact
Tristan Garrick, DMA PR manager
Tel 020 7291 3315
Email tristan.garrick@dma.org.uk

Of the 2,226 consumers surveyed for the third Consumer Channel Preference Study, 60% said they enjoy checking their physical mail, highlighting what the study refers to as an “emotional connection” to postal mail.

Over-reliance on email messaging may actually hurt marketers, according to the study, which found the perception that reading email is faster than reading postal mail declined among email account holders from 47% in 2010 to 45% this year.

Warren Storey, VP of product marketing and insight at ICOM, a division of Epsilon Targeting, said the findings are not all that unexpected when “you know the data and consumer trends.”

“It’s just ‘surprising’ because everything you hear in the media is basically counter to what the consumers are actually telling us, which is that direct mail is still the preferred channel,” Storey said.

While Groupon and LinkedIn, for example, are grabbing high-profile media attention by generating “giant” initial public offerings, “direct mail is one of those mediums that is always quietly there in the background doing a great job,” Storey said.

The most ideal way to reach consumers, according to the report, is to use a combination of media to build consumer trust, including media that some marketers might consider to be “old school,” like direct mail, TV and newspapers, said Storey.

“There is definitely a growing trend that email inboxes are getting more and more full,” Storey said. “Over the last three years, we’ve seen an increase of the percentage of consumers saying, yeah, they like getting email, but they get far too many. In the U.S., 75% of consumers say they get more email than they can read.”

Ultimately, the overarching theme of the study, according to Storey, is that marketers should think twice before they disregard direct mail.

“It’s not sexy. It’s not terribly innovative,” he said. “But it works.”