As I am sure you have heard, as of this week, the cost of a first-class stamp in the UK has risen from 46p to 60p, while a second class stamp has increased from 36p to 50p.
Price rises are never going to be welcome, but Royal Mail has stressed the changes were not only inevitable but necessary to keep the six-day universal postal service alive.
EU Must Be Joking
Even after the increases, second class stamps will still be amongst the cheapest in Europe, while first class are still around half the cost of posting letters in France and Germany.
Royal Mail also pointed out that service standards in the UK are “appreciably higher” than in many other EU countries, with deliveries over six days against an EU minimum obligation of five days, and a next-day target of 93%, the highest for any major European country.
Royal Mail has also made many operational improvements to the Postcode Address File (PAF) recently, including the introduction of British Forces Post Office data.
Pushing the Envelope
Indeed, Royal Mail offers a high-value quality service that needs to be paid for. Consumers get a remarkable, reliable service, with a letter delivery service to every one of the 28 million addresses in the United Kingdom at a uniform price, irrespective of distance travelled.
Like so many things in the UK, the postal service can be somewhat taken for granted – and if it takes bringing the price of stamps more in line what our European cousins pay to save it, that seems more than reasonable to us.
But the changes have left many companies wondering how it will affect their overheads. Initially it may appear challenging for small and medium size businesses, but what’s the truth behind the headlines?
Frank It, My Dear, I Don’t Need a Stamp
Closer scrutiny reveals that price increases for franked mail are a lot more modest. A first-class 100g franked letter is up to 44p from 39p; second-class up to 31p from 28p.
This makes a switch to franked mail cheaper than the price of stamps even at pre-change prices.
Behind the panic, higher-volume business customers will simply not feel the effect in the way many are suggesting, and do in fact appear to be somewhat protected.
Addressing the Problem
Due to errors in the postal address, Royal Mail destroys on average 25 million letters, packets and parcels every year. A mountain of undelivered correspondence – costing millions in postage – is amassed at the firm’s National Returns Centre at a rate of almost 70,000 items per day. It should come as no surprise that the majority of this is business mail. Beyond postage costs, this undelivered mail means extra cost and damaged reputations for your business.
For a business, outdated data could mean a failed or misplaced delivery, a missed opportunity, and a lost sale, not to mention brand damage. Part of the service we pay for is Royal Mail’s tenacious grip on the accuracy of its address database, the Postcode Address File (PAF®).
The same cannot be said of the databases maintained at the other end: somewhat inevitably, consumer data degrades at a phenomenal rate of 13% and business data by 37% on average every year, as people move house, change their names, and even pass away. These errors in addressing come at a cost for both the business involved and the Royal Mail themselves who have to attempt to process the invalid addresses.
Catalogue of Errors
What are the costs of this on your business? We can tell you. Imperfect address data costs UK businesses £146 million every year. It might not be as satisfying to complain about boomerang mail shots when your next catalogue goes out, but the cost is significant.
So while the inescapable stamp price changes might make our Christmas card list a little more expensive this year, hopefully they may also be a wake-up call to review all our mailing activities and avoid unnecessary cost and expense.How do you think the price changes will affect your business? Get in touch.