Pricing in Proportion and how to use it to your advantage

Chapter 11.3 Getting the most from the post This chapter includes: The postal market what is on offer Using a competitive postal market Pricing in Proportion and how to use it to your advantage Outward mailing delivering your message Response Services boost your response Despatching the goods International direct marketing using the mail Where to find out more About this chapter The postal market in the UK over the last two years has seen some of the most significant changes in its 350 year history. Removing Royal Mail s monopoly and introducing competition have resulted in changes to the products and services on offer and accelerated the pace of change. The introduction of Pricing in Proportion in August 2006 has also changed many of the rules about mail and its format-based pricing has already had an impact on the design of direct mail. This chapter tells you about some of the key services that are now available to help you use and integrate mail in your direct marketing. Whether you are prospecting, managing the relationship with your customers or distance selling, getting the most from the mail is an important part of any marketing campaign. Author/Consultant: Alex Walsh 11.3 1

Alex Walsh Head of Postal Affairs The Direct Marketing Association 70 Margaret Street LONDON W1W 8SS Tel 020 7291 3311 alex.walsh@dma.org.uk Alex is Head of Postal Affairs at the Direct Marketing Association representing the interests of nearly 1,000 users of Direct Marketing. He is responsible for all postal matters at the DMA, from helping members with specific issues through to providing input to the industry Regulator, Postcomm. After graduating from Birmingham University with a degree in Biological Sciences Alex joined the retail marketing department of Chevron Oil. He then spent five years with Bell and Howell as a European Product Manager, before moving into the agency world, first in market research before joining a business to business advertising agency as an account director. After time spent working for Mailcom and a number of Direct Marketing agencies, he helped set up a new Marketing Services agency as joint Managing Director. After a number of years in this role Alex left to work as a consultant and trainer before joining Royal Mail, where he had a number of Marketing roles related to the development of Direct Mail and relationships with key industry partners such as Mailing Houses and Trade Associations. After nearly 10 years at Royal Mail he felt it was time to move on and left to join the Direct Marketing Association in January 2006 as their Head of Postal Affairs. Chapter 11.3 Getting the most from your post The postal market Mail is remarkable in being able to contribute to every phase of a marketing campaign from the start of a campaign through to the delivery of your product. The strengths of mail in targeting, relationship-building and goods delivery make it an indispensable marketing tool across all business sectors. Mail is the perfect advertising medium for delivering your message and your brand image to individuals in your target audience. The strengths of mail in outbound communication are matched by its abilities to receive incoming information from your customers. Even in the age of email prospects still frequently use mail to respond through a postal coupon or a reply-paid service. And with the sale made, mail services can close the loop and deliver the goods. Mail also works well with electronic media to get real, physical 3D goods to real customers. It is no surprise then that the latest figures from the Direct Mail Information Service (March 2006) show that the mail medium is still very healthy. Expenditure on direct mail in 2005 was 2.37 billion, representing over five billion items, with expenditure in the 4th quarter up 2.4 per cent year on year. 11.3 2

As integrated, multi-media campaigns are being increasingly used mail often takes a central role in the media mix, being used in very different ways to traditional direct mail. In this chapter we tell you about how to use a competitive mail market and the services that can help you: Communicate with individual customers and prospects Maximise response Deliver goods or fulfilment materials to your customers Use the mail in international marketing Table 11.3.1 is a guide to which types of products apply to different parts of the marketing process. Products and services in italics are available from more than just Royal Mail; the others are at the time of writing only available from Royal Mail. Table 11.3.1 Marketing activity Mail service Inland International Outward mailing Low volume mailings Low volume mailings delivering your message Stamped mail/pre-paid Airmail letters, small envelopes packets, printed Stamp rolls papers Franking machines International signature Printed postage Impression services (PPI) International Surface Mail Airpacks Higher volume mailings Higher volume mailings Mailsort or equivalent International Zone Mailsort Light and Format sort Cleanmail International no sort Walksorto Presstream mailmedia Reply services to boost Business Reply plus International response response Freepost Plus services Freepost name mailmedia Despatching goods Guaranteed and signed Airmail letters, small for services packets, printed Packetpost papers Packetsort/Plus International Packetpost returns signature services Courier services (before 9, Airpacks before 12, 24 hours, Courier Services 48 hours etc.) 11.3 3

The information in this chapter is subject to change, as existing products and services are developed and new products are launched. You can keep up to date with the latest developments at Royal Mail by visiting www.royalmail.com or by visiting Postcomm s site www.postcomm.gov.uk. Postcomm s site also has links to all the licensed postal operators. Using a competitive postal market After a number of years of little significant change in the UK postal market the last year has seen more activity than ever before, culminating in the full liberalisation of the postal market on 1 January 2006. Although many companies had already taken advantage of the introduction of competition in bulk mail in 2003 to reduce their postage costs the full liberalisation presents additional opportunities and challenges. Competition and Regulation have already resulted in big changes with, for instance, Royal Mail reporting some of the best Quality of Service results ever. Many organisations have also seen the benefits of competition for themselves through lower prices, improved service and product developments. There is however still a long way to go to achieve a level playing field and significant barriers to genuine competition remain; for instance, every licensed operator except Royal Mail has to charge VAT. This means that for many organisations that can t reclaim VAT (e.g. financial services and charities) Royal Mail remains the only realistic choice. This section will cover: What liberalisation of the postal market means What it means for users of direct mail How it works How you can save money on your postage The disadvantages of not using Royal Mail How to find out more information From 1 January 2006 Royal Mail s monopoly to collect and deliver post has been removed and any licensed operator can collect, process and deliver mail. There are currently 19 licensed operators (including Royal Mail) as at October 2006. Postcomm (the economic regulator) has imposed a number of conditions on Royal Mail that ensure that it can t act in a non-competitive way, to allow competitors to build up their business. Best estimates are that Royal Mail s competitors accounted for three to five per cent of all mail in the UK during 2005. There are two main ways in which the other 18 licensed operators can compete with Royal Mail: 11.3 4

Figure 11.3.1 /LFHQFHG3RVWDO 2SHUDWRUFROOHFWV PDLOIURPFXVWRPHUV /LFHQFHG3RVWDO 2SHUDWRUSUHSDUHV PDLO VRPHPDLOZLOOEH FXVWRPHUSUHVRUWHG /LFHQFHG3RVWDO 2SHUDWRUGHOLYHUV PDLOWR5R\DO0DLO 0DLO&HQWUH 5R\DO0DLOGHOLYHU WRFRQVXPHUVDQG EXVLQHVVHV WKH³ILQDOPLOH ³'RZQVWUHDP$FFHVV PHDQVWKDWWKHSRVWDORSHUDWRUFROOHFWVDQGSURFHVVHVWKHPDLO WKDWLVWKHQJLYHQWR5R\DO0DLOIRUGHOLYHU\0RVWRIWKHPDLOFXUUHQWO\EHLQJFDUULHG E\5R\DO0DLOFRPSHWLWRUVLVFXUUHQWO\XVLQJ³GRZQVWUHDPDFFHVV /LFHQFHG3RVWDO 2SHUDWRUFROOHFWV PDLOIURPFXVWRPHUV /LFHQFHG3RVWDO 2SHUDWRU VRUWVSUHSDUHVPDLO VRPHPDLOZLOOEH FXVWRPHUSUHVRUWHG /LFHQFHG3RVWDO 2SHUDWRUGHOLYHUV PDLOWRWKHLURZQ GHOLYHU\FHQWUHV /LFHQFHG3RVWDO 2SHUDWRUGHOLYHUVWR FRQVXPHUVDQG EXVLQHVVHV ³(QGWR(QG RU³E\SDVV ZKHUHWKHOLFHQVHGRSHUDWRUGRHVQRWXVH5R\DO0DLOIRU DQ\SDUWRIWKHPDLOSURFHVV7KHOLFHQVHGRSHUDWRUZLOOFROOHFWSURFHVVDQGGHOLYHU WKHPDLOLWVHOI&XUUHQWO\WKLVLVRQO\DYDLODEOHIRUEXVLQHVVWREXVLQHVVPDLOLHLWLV FROOHFWHGIURPDEXVLQHVVDGGUHVVDQGGHOLYHUHGWRDEXVLQHVVDGGUHVVEXWLWLV DQWLFLSDWHGWKDWVRPHOLPLWHGHJFRYHUDJHRISRSXODWLRQFRYHUHGGD\VD ZHHNEXVLQHVVWRFRQVXPHUVHUYLFHVZLOOEHODXQFKHGE\WKHHQGRI The DMA sends out around 10,000 copies of its Member Directory each year. The Directory weighs about 750 grams and is sent to business addresses. In April 2006 the DMA contacted a postal consultant to explore alternatives to using Royal Mail for despatch of the Directories. Because the delivery addresses were mainly businesses the consultant advised using an end to end service that bypassed Royal Mail completely with a cost saving of 26 per cent on the postage. All licensed operators have to agree to conditions that guarantee the integrity and security of the mail, and their Quality of Service is usually at least as good if not better than Royal Mail s. There is genuine choice about which postal operator you choose to use for your mailings. In some cases there are significant cost savings or different terms and conditions compared with Royal Mail. This is more likely where the postal operator can bypass Royal Mail completely. Bear in mind that all mail from Royal Mail s competitors will use a different PPI (Postage Paid Impression) that will identify the carrier even if it is actually delivered by a Royal Mail postman. There are now software and consultants available that can analyse a mailing and determine the most cost-effective distribution by using more than one carrier. Although this can result in the greatest savings it does need management and coordination of the various suppliers. 11.3 5

With the introduction of Pricing in Proportion from 21 August 2006 using one of Royal Mail s competitors may also mean that you are less restricted on the formats that you can use. Can I save money on my postage? Yes but it s not guaranteed! How much or even whether you save money will depend on a number of factors. Each of Royal Mail s competitors has its own requirements in the way that mail is prepared and presented and this will result in additional set up and processing costs that can in some cases negate any savings. If your mailing is under 100,000 it s likely that you won t see much if any -saving compared with Royal Mail. Regularly moving between operators or using multiple operators for a single mailing will not only incur additional expense but also increase the likelihood of errors as suppliers have to cope with the different requirements. The best way to ensure that you achieve the best possible price is to discuss your requirements with your suppliers especially your mailing house. They will be able to advise on the alternatives and the relative costs involved. Are there disadvantages in not using Royal Mail? The mail carried by Royal Mail competitors will be easily identified by a different PPI (e.g. it will say something like UK Mail instead of Royal Mail) and this can have an impact on customers perceptions of the company/brand. Obviously if you move your postal business from Royal Mail then you will also lose support such as Account Management and Customer Operations Managers (COMS). How do I find out more? Contact the licensed operators direct (all their contact details are on the Postcomm website www.postcomm.gov.uk/postal-licences-and-operators/licensedpostal-operators). Speak to your mailing house and your agency about what you re planning to do and ask for their advice and help. If possible speak to customers of the operator you re thinking of using to find out what their experience has been. If you still have concerns, test the service on a non-critical mailing to see for yourself how it works. 11.3 6

Pricing in Proportion (PiP) On 21 August 2006 Royal Mail introduced a fundamental change to the way that mail is priced. Mail is now priced according to a combination of format and weight instead of just weight alone. These changes have meant that many of the existing rules of direct mail no longer work since the economics have completely changed. There is a new set of questions to be answered such as whether it is worth paying more for the postage by using a larger format to achieve standout. This section will cover: The key elements of Pricing in Proportion Summary of the key changes from weight-based pricing to PiP Tips on getting the most out of PiP How to find out more information Some have said that PiP will stifle creativity but I believe it will have the opposite effect. Doormat competition is tough at the best of times, but faced with the prospect of most envelopes being C5 or smaller, we have to make the most of what we ve got. Our mailings will need every ounce of creativity if we are not to be overlooked by Mrs Sample. We believe that you can still get great creativity to work in a format less than 240mm x 165mm x 5mm. Nick Couldry, Creative Director, Whitewater Key elements of Pricing in Proportion PiP is based on three main formats letters, large letters and packets; and then a limited number of weight bands for each format. (NB: Some bulk mail services also offer an A3 packet as an additional format). Full details on formats and pricing are available at www.royalmail.com 11.3 7

Letter This covers items including most postcards, bills, statements and most greetings cards. Packet) Dimensions: 240 x 165mm Maximum thickness: 5mm Maximum weight: 100g (NB: Same dimensions but >100gms is a Large Letter This covers items such as magazines, CDs and A4 envelopes. Dimensions: 353 x 250mm Maximum thickness: 25mm Maximum weight: 750g Packet This covers anything longer or thicker or wider than a large letter so packets include items such as VHS cassettes, books, prints and posters in cylindrical packaging. You ll need to weigh these, just as you do now, to see the new cost prior to sending. NB: An A3 Packet format is also available for some contract mail products. To fit in the A3 Packet format, your item must be: no bigger than 297mm x 420mm big, no thicker than 25mm and weigh no more than 750g. Visit www.royalmail.com for more details Illustrations and information courtesy of Royal Mail. 11.3 8

What has changed and break-even points The main impact from the introduction of PiP can be summarised as such: large lightweight items (such as a C4 envelope with a few sheets of paper in it) will cost more and heavy items (such as a mail-order catalogue) will cost less. Table 11.3.2 shows some more detail and the break-even point at which the mailing will either cost the same or less under PiP (at prices current in 2006) than it did under weight- based pricing before 21 August 2006. Table 11.3.2 Tariff Product Format Break-even Winners (cheaper point under PiP) Mailsort MS1 1400 Letter 61g 61 100g Large Letter 81g 81 750g A3 Packet 191g 191 750g Packet 251g >250g MS2 1400 Letter 61g 61 100g Large Letter 71g 71 750g A3 Packet 211g 211 750g Packet 301g >300g MS3 1400 Letter 61g 61 100g Large Letter 71g 71g 750g A3 Packet 201g 201 750g Packet 291g >201g Packetpost Packetpost 1 Large Letter 131g 131 750g Packet 611g 611 1000g Packetpost 2 Large Letter 161g 161 750g Packet 641g 641 750g and and 789g 789 1000g Packetsort Packetsort 1 Large Letter <100g <100g and >120g 120 750g Packet 601g >600g Packetsort 2 Large Letter <100g <100g and >150g 151 750g Packet 641g 641 750g and 791g >790g Standard 1st class Letter 61g 61 100g tariff Large Letter 61g 61 750g Packet 400g 401-450g is the same Over 450g is cheaper 2nd class Letter 61g 61 100g Large Letter 151g 151 750g Packet 451g >450g Carefully planning your mailing piece to take advantage of the formats and weight bands available under PiP can make a big difference to your postage costs. 11.3 9

Top tips to get the best out of PiP Avoid light large letters typically a C4 envelope with a couple of A4 sheets inside. Under 70 grams it will be more expensive. Fold A4 if possible folding A4 will move the item from a large letter to a letter and save postage Watch the thickness many packets could qualify for cheaper letter or large letter prices if you keep the thickness to less than 5mm (letter) or 25mm (large letter) A3 packet is cheaper than packet only available for bulk mail users but often a cheaper option for some items e.g. parts and samples, books, cylindrical packages Use the free weight the first price band now extends to 100g instead of 60g. Can you use the additional weight? If you go above 100g think whether you can use any additional free weight since the price now remains the same up to 250g Any shape within format is allowed provided you are within the overall dimensions of the format you can still mail round, star shaped or other unusual shape mailers at the same price as a conventional shape. Outward mailing delivering your message If you are sending out any more than a few dozen items of mail a day, you probably won t want to stick a stamp on each one. Happily, there are a number of labour-saving and money-saving alternatives. The volumes indicated are just a guide to help you find the best service for your needs. Low-volume mailings At the time of writing (October 2006) most of Royal Mail s competitors are not handling one-off small volume mailings so these are the services that are likely to be most useful to you: Stamp rolls 500+ items. Stamped/Prepaid envelopes for weekly volumes of 100-500 items. Prepaid in cash 500+ items. Franking machines 500+ items. Printed Postage Impressions (PPIs) 1,000+ items. mailmedia TM 1,000 + items. 11.3 10

1. Stamp rolls If you prefer to use stamps for a mailing, but do not have time to stick them on your envelopes by hand, stamp rolls of gummed 1st and 2nd class stamps can be applied by machine. Rolls of 500, 1,000 and 10,000 are available for next-day delivery, and other sizes or formats such as self-adhesive stamps can be ordered. For more information, visit www.royalmail.com 2. Prepaid envelopes Standard prepaid envelopes can be purchased from Royal Mail Direct by visiting the website at www.royalmail.com. However if you need a large number, it may make sense to print your own envelopes. This allows you to have them made to your own specification and improve corporate branding by printing your logo or message. There is no need to store all the envelopes; you can call them off as they are needed. 3. Prepaid in cash Most main post offices and some delivery offices will frank your mail for you through their Prepaid in Cash service. You simply hand your unstamped items over the counter and pay the standard postage for each item, in a lump sum. Royal Mail then franks each item before delivering it as usual. There is a minimum number of 500 items or a minimum cost of 95. 4. Franking machines Franking is a fast and convenient alternative to stamps. Instead of putting a stamp on the envelope by hand, the value of the postage paid and the date is printed by machine. When you use a franking machine you have a contract with Royal Mail that allows you to purchase your postage in advance. The franking machine postmarks any number of your letters or parcels up to your prepaid total. You can use franking to pay for all types of mail to any destination worldwide, including 1st and 2nd class, Packets, Recorded Signed for, Special Delivery and Swiftair. It is particularly suitable for low-volume direct mail, e.g. local retail or small businessto-business applications, but is sometimes used for higher volume mailings too. Franking machines can be bought, leased or rented from a number of companies authorised by Royal Mail (see contact information section at the end of this chapter). 5. Printed Postage Impressions If you despatch large quantities of identical inland or international mail, letters or packets, the Printed Postage Impression (PPI) facility may prove to be the most time and cost-efficient option for you. To use PPI you print your envelopes with a unique licence number incorporated into a Printed Postage Impression. Each licensed Postal Operator has their own unique design of PPI in addition to those offered by Royal Mail. 11.3 11

Higher volume mailings For larger mailings, there are a number of purpose-designed services available from a number of postal operators. Since Royal Mail still has around 97 per cent of the market and most other licensed operators use downstream access (i.e. they use Royal Mail for final delivery), the section below concentrates on Royal Mail products and services. Where alternatives are available from other suppliers this is included in the section. Useful products and services include: mailmedia Mailsort and competing products Mailsort Light Cleanmail Walksort Presstream mailmedia This product from Royal Mail can be used to send all forms of mail from a letter to a large packet. mailmedia combines a range of mailing options. mailmedia has an initial weight step of 100 grams and can be used for items up to two kilograms. The product also has an initial entry level of 1,000 items for all items, making it easier to set up test cells or run smaller mailings. mailmedia offers a unit price for the outward mail item that includes postal responses of up to 10 per cent of the original mailed volume. mailmedia clean If you can t spare the time to sort your own items, choose the mailmedia clean service and Royal Mail will do the sorting for you. The addresses must be printed in a font that machines can read, i.e. an Optical Character Recognition (OCR) font. mailmedia 700 The biggest savings are available through mailmedia 700 (suitable for larger mailings). Mailmedia 700 offers discounts if you sort your mail into approximately 700 predetermined delivery selections and include a Customer Barcode (CBC) on each item. mailmedia 1400 Also suitable for larger mailings, mailmedia 1400 offers substantial discounts if you re prepared to sort your mail into approximately 1400 predetermined delivery selections. For more information or to book a mailing using mailmedia please contact the mailmedia booking centre on 0845 60 90 500. 11.3 12

Royal Mail s Mailsort and competing products Mailsort from Royal Mail is an important range of services for large-volume mailings. It offers you a discount in return for doing some of the sorting work yourselves. You sort your mailing items, usually by computer, into postcode groups before handing them over in bags and bundles to Royal Mail for delivery. Your mailing must comprise at least 4,000 letters, or 2,000 letters within the same postcode area (e.g. OX, CV, B etc.) or 1,000 packets of the same size and weight. Mailsort prices offer a discount of up to 36 per cent off public tariff. The exact figure will depend on the format and weight of your mailpack, the volume sent, time of posting and the type of Mailsort service you use. Delivery options available are: Mailsort 1 Targeted for delivery the next working day Mailsort 2 Targeted for delivery within three working days Mailsort 3 Targeted for delivery within seven working days There are additional discounts available if you use mail addressed using an optical character recognition font (Mailsort 120 OCR) or apply a Customer Barcode to each mailing piece (Mailsort 120 and 700CBC). See www.royalmail.com/mailsort for the latest specifications and prices. There are also a number of competing products to Mailsort available from other licensed operators. These operators may offer lower prices, additional information (such as tracking to delivery centre) and later collection times. For details of what each licensed operator offers visit: http://www.psc.gov.uk/postal-licences-and-operators/licensed-postal-operators To use Mailsort or any of the competitive products you will probably need to be a contract holder and deal directly with the postal operator, or use a mailing house with its own contract. All the postal operators will supply a sortation database and relevant software to help you plan and manage the necessary handling operations. Mailsort Light Adding an extra stage to a mailing can be a powerful way to boost response, either by building expectation through a teaser mailing or providing a final prompt through a reminder mailing. Royal Mail s Mailsort Light lets mail users take full advantage of this by offering a further discount on multi-stage advertising mailings where at least one stage of the mailing is a lightweight piece. To qualify for Mailsort Light your multi-stage mailing must amount to 40,000 items in total consisting of: A main stage At least one lightweight stage (which must be sent using Mailsort 3). The mailings must be clearly linked as part of the same campaign and the lightweight element must weigh less than 15 grams. For the latest information about Mailsort Light, go to www.royalmail.com/ mailsort. 11.3 13

Cleanmail Cleanmail provides mailers with the opportunity to benefit from a work-share discount by providing correctly addressed machinable mail bearing either an OCR readable font or a barcode. However, the Cleanmail service is for unsorted machinable mail. Your mail needs to be faced, trayed (to a maximum weight of 10 kg per tray), labelled and segregated into 1st or 2nd class. If your address accuracy is over 95 per cent you ll qualify for an additional discount (Cleanmail Plus). There are also competing products to Cleanmail available from other licensed operators. These operators may offer lower prices, additional information (such as tracking to delivery centre) and later collection times. For details of what each licensed operator offers visit http://www.psc.gov.uk/postal-licences-and-operators/licensed-postal-operators Walksort Walksort is a version of Mailsort that provides a discount of between 36 and 42 per cent on postage for mailers who sort and bundle mail by individual postal delivery walk. The service is ideal for organisations such as local authorities or utilities that post to a high proportion of addresses within a specific area since, in order to qualify, the mailing must be sent to at least 10 per cent of households within the coverage area. There are two service options: Walksort 1 delivery next working day after posting Walksort 2 delivery within three working days of posting Reply services to boost response Research shows that the easier you make it for a customer to respond, the more responses you will receive. Putting effective response channels in place is one of the most important parts of campaign planning. Royal Mail offers a number of postal response services to help you strike the right balance between convenience for your prospects, and for you. These are: Response Services (Business Reply Plus and Freepost Plus) FREEPOST NAME Private box mailmedia 11.3 14

Response Services (Business Reply Plus and Freepost Plus) These products provide a quick and easy way for your customers to reply to you without having to pay for the postage. They encourage customers to respond and show your business to be helpful and customer-orientated. Business Response and Reply items are processed by machine and therefore offer the cheapest option if you can meet the format specifications. The Response Services licence allows you to use either service and you then pay the postage only on the items sent back. The key difference between Business Reply and Freepost is style of presentation. With Business Reply, favoured for business-to-business communications, all your reply cards and envelopes are preprinted with your address and the symbols identifying the service. This means Business Reply is an option when you are placing inserts in magazines or mailings to your customers. Business Reply can operate at either 1st or 2nd class postage rates. Freepost can be used in this way too, and is especially good for a consumerfriendly image. The extra advantage with Freepost is that respondents can use their own stationery to contact you, which means you can advertise easily on TV, radio or in the press. The design specifications for Business Reply and Freepost and full details of the service are available at www.royalmail.com. FREEPOST NAME This is a postal response mechanism from Royal Mail Response Services, developed for use in media where fast communication is imperative, e.g. TV, radio, cinema, posters, Teletext and on vehicles. It allows advertisers to use a one line address, e.g. FREEPOST NICKELODEON. No full address or stamp is required. FREEPOST NAME offers many benefits: it is memorable and helps reinforce the brand. The service is available through a 12-month licence fee ( 150) plus premium rate postage per item. FREEPOST NAME can carry a registered company, product or brand name. Generic names are allowed on a first come, first served basis. PO Boxes PO Boxes enable you to quote a box number instead of a return address. This reduces the length of your address and makes it easier for customers to remember. Replies go directly to your local Royal Mail delivery office. You can collect your replies yourself, or have them delivered to you. Distance-selling regulations prohibit the use of abbreviated addresses such as PO Box numbers for cash-with-order advertisements. If customers are sending you cash, you must ensure your full trading address is displayed. Details of PO Box charges are available at www.royalmail.com 11.3 15

Mailmedia Please refer to the section on higher volume mailings for details of this service. Despatching the goods The increasing popularity of remote shopping, both through mail order and the internet, has placed fresh emphasis on delivering the goods. A virtual purchase cannot represent real income until real goods are delivered to a real address. The quality and timing of delivery services are essential in establishing good customer relations and turning first-time buyers into long-term customers. There are a number of companies offering delivery services including Royal Mail, TNT, DHL, Business Post and UPS etc. These companies offer a range of services that should be able to meet any specific requirement. Examples of the Royal Mail services are shown below but most of the other courier and delivery companies will also offer similar services. Guaranteed and Signature Services Royal Mail offers two signature services, one of which is guaranteed: Special Delivery and Recorded Signed For. Special Delivery Guarantees delivery of your items by 12 noon the next working day to 99 per cent of UK addresses with a money-back guarantee for delay. Special Delivery uses its own dedicated, secure overnight delivery network. In the unlikely event that your item is lost or damaged, you can receive compensation of up to 250. The cost of this cover is included in the price. For a higher level of compensation, you can increase cover to either 1000 or 2500 for a small additional payment. A Confirmation of Delivery service is available: by calling 0845 700 1200 after 13:00 you can confirm that your item has been delivered, or you can check online. Recorded Signed For Although Recorded Signed For does not offer a guaranteed delivery time, Royal Mail only delivers if it can obtain a signature from the delivery address. Proof of posting is given in the form of a receipt. Delivery can be confirmed via the tracktrace facility on the internet or by phoning the Confirmation of Delivery helpline: by calling after 14:00 you can confirm that your item has been delivered that day. Packetpost Packetpost is a product from Royal Mail that offers a convenient and simple method of posting medium to large numbers of packets, without the need to weigh and stamp each packet individually. It applies to any item over 60 grams, with no weight limit on 1st class postings and a one kilogram weight limit on 2nd class postings. There is no set minimum daily quota and Packetpost delivers to all UK addresses. The service is offered at two levels: 11.3 16

Daily Rate for organisations that post a medium numbers of packets daily and more than 5,000 packets a year, or about 100 packets each week. The weight of each day s packets is divided by the number of items. This gives an average weight from which a price can be calculated for that day s despatch. Flat Rate for organisations that post more than 10,000 packets a year, or about 200 packets each week, and whose packets have a stable average weight. Price is simply calculated by counting the number of items charged at a prearranged flat rate, based on the average weight of each packet. There is also a service called Packetpost Returns. This helps customers send back anything they decide not to buy. It s not only free for your customers; it s convenient and easy too. All they have to do is return the package to their local post office. To use Packetpost Returns, you ll need to have more than 2,000 packages a year sent back to a single address within your business. You need to separate your Large Letters from your Packets if you want a separate price per format. If you do present mixed format postings (i.e. Packets and Large Letters together), you will be charged at the Packet format price. Packetsort and Packetsort Plus If you are sending over 250 Packets or 250 Large Letters at a time then these services can save money compared to Packetpost. Using a simple sorting system you re charged based on the average weight of all the items you don t have to weigh each one individually which helps save you even more in your fulfilment costs. Packetsort Plus offers additional savings in return for more pre-sortation by the customer. As with Packetpost, you need to separate your Large Letters from your Packets if you want a separate price for each format. Alternatively, you can present the entire posting as mixed format (Packets and Large Letters together) and pay the Packet format price for the entire posting. Other delivery services Depending on what you require, most courier and delivery companies will offer a service that will meet your needs. The types of services available include: Guaranteed next-morning delivery by 09:00, 10:00 or noon Next day (to arrive by close of business) 48 hours 11.3 17

Signed for/proof of delivery Don t forget when choosing a delivery company to find out whether: They confirm delivery (is this on request or as standard?) You (and your customer) can track and trace their delivery? How? There are weight limits per item or delivery They offer flexible collection times to suit you They offer insurance cover (and how much) and any compensation or guarantee for non-delivery They offer Saturday or evening delivery International direct marketing using the mail Overseas mailing services One way to tackle the important but complex business of marketing overseas is by international direct marketing using the mail to find and locate prospects, generate sales leads, sell direct, and deliver the goods. As customs and tariff barriers have relaxed, international direct marketing provides real opportunities for British businesses. As you would expect, Royal Mail offers a complete package of international services that are suitable for direct marketing but, depending on your requirements, there are alternatives from other postal administrations. It s not possible to cover all the suppliers and products here and unless you are regularly sending large volumes of mail internationally it is best to use a Mailing House or Consolidator at least for high-volume international mailings (information is available from http://themca.org.uk). Royal Mail products that can be used for international direct marketing include: Airmail Letters, Small Packets, Printed Papers International Bulk Mail International Destination Sort International Zone and Format International Response Services and reply coupons International Signed For 11.3 18

Outward mailing delivering your message internationally Low volume mailings Airmail letters The Airmail Letters service gives you a complete, fast and reliable worldwide coverage for business or personal mail. Delivery to Western Europe is within two days of posting, to Eastern Europe within three days of posting and to destinations outside Europe within four days. (Surface mail letters can be sent to destinations outside Europe.) Airmail letters have a weight limit of two kilogram. Items should carry a special airmail label or you should write PAR AVION BY AIRMAIL in the top left-hand corner. Printed Papers, small packets Special rates are available for printed papers such as books, brochures or leaflets and small packages for air and surface mail. Check www.royalmail.com for the latest information on restrictions (not available to all countries) and prices. Higher volume mailings International Bulk Mail International Bulk Mail lets you send international mail at the same time as Mailsort, Presstream or Walksort inland mailings, or alternatively as standalone mailings. The service makes sending international bulk mail as easy as sending inland items. You just place all your international items into a single bag with the rest of your mailing and hand it over to Royal Mail. Machine sortation at Heathrow Worldwide Distribution Centre means you don t have to sort your mail by country or region and makes the process more costefficient, so the price is highly competitive for you. Key features: No minimum volume of international mail if part of an inland mailing ideal for small international runs Minimum volumes if a standalone international mailing: 4,000 letters 1,000 flats or packets All items in a mailing must be the same format (letter, flat or packet) and the same shape and size but may vary in weight Items must be presented by service speed as not all services are available to all destinations this could mean that a single mailing be split by service speed (i.e. standard for Western Europe and economy for North America) Your minimum annual spend on International Bulk Mail must be 2,500 There are three service options, which each depend on destination: 11.3 19

Table 11.3.3 Region Western Rest of North Middle Central Africa Far East Europe Europe America East and South and Asia and America Australasia Priority 3-5 days 3-5 days 5-7 days 5-7 days 5-7 days 5-7 days 5-7 days Standard N/A N/A 10-14 days 10-14 days 14-21 days 14-21 days 14-21 days Economy 5-10 days 10-15 days 6-8 weeks 8-12 weeks 8-12 weeks 8-12 weeks 8-12 weeks Priority items are sent by the next available flight and the receiving country s equivalent of 1st class mail. Standard items are sent by air, when there is capacity, and the receiving country s equivalent of 2nd class mail. Economy items are sent by surface mail and the receiving country s equivalent of 2nd class mail. International Destination Sort If you send large amounts of mail overseas and you re prepared to do some sorting yourself, International Destination Sort can save you money. All you have to do is sort mail by destination and by type; for example, letters, flats or packets. You can send all types of mail, personal and printed, as well as packages with commercial value. You can save even more if you re sending printed material (such as newspapers and books) to a single address by using a labelled M-Bag, as this isn t opened during transit, reducing sorting, handling and costs. Key features: Save money on international bulk mailings by doing the sorting yourself Make even bigger savings when sending printed material to a single address Up to three delivery speeds to match your budget and deadlines A step by step User Guide and all materials supplied Royal Mail offers three delivery speeds to suit your budget and your deadlines. Take a look at the table below to see how long mail takes to get to each region. Table 11.3.4 Region Priority Standard Economy Western Europe 3-5 days N/A 5-10 days Rest of Europe 3-5 days N/A 10-15 days North America 5-7 days 10-14 days 6-8 weeks Middle East 5-7 days 10-14 days 8-12 weeks Central and S. America 5-7 days 14-21 days 8-12 weeks Africa and Asia 5-7 days 14-21 days 8-12 weeks Far East and Australasia 5-7 days 14-21 days 8-12 weeks 11.3 20

International Zone and Format International Zone and Format services offer you a value for money, high-quality way to distribute your international business mail. Preparation is easy you don t have to buy stamps or use a franking machine, just sort your mail into Western Europe, Rest of Europe and Rest of the World. For items going to Western Europe, you can save even more by splitting your mail by format. You can send all types of business mail, printed or personal, as well as goods up to two kilograms. If you don t send large volume mailings that often, you can use the On demand service, as long as you spend 100 or more per mailing. Key features: Significant cost savings and fast delivery Two delivery speeds to match your budget and deadlines: Priority or Economy Step by step User Guide supplied as well as all materials Delivery aims are as follows: Table 11.3.5 Western Europe Rest of Europe Rest of World Priority 3-5 days 3-5 days 5-7 days Economy 5-10 days 10-15 days 8-12 weeks For more details on these international mail products visit www.internationalmailsort.com. International reply services to boost response Although other postal administrations offer postal response services most companies posting out of the UK will use Royal Mail s international response options: International Response Services International Signed For International Reply coupons International Response Services International Response Services make it easy for your customers to respond to you for free, or by just paying part of the postage cost with International Stamped Response services. You pay an annual licence fee, plus a fee for each response you receive. You can choose what your responses will look like too. You can use the simple design of the International Business Reply packaging (available for 200 countries) or the more local look of the International Admail Letter available to selected destinations. 11.3 21

Key features: Enable your customers to respond to you from overseas for free Easy budgeting with an annual licence fee and cost-per-response One simple response service design available for over 200 countries Or, choose a more local look with International Admail services available in selected destinations International Signed For Similar to the domestic product but you have the choice of sending your item by Airmail or Surface mail. A signature will be taken for your item on delivery at its destination. Key features: Choose to send your item via Airmail or Surface mail Delivery to just about anywhere in the world Signature taken on delivery at destination International reply coupons Sending an International Reply Coupon with your mailing means the recipient can reply to you for free or by paying only part of the postage cost. You can buy the coupons from most large post office branches. Then whoever you send the coupon to can exchange it for international postage at a post office in their own country. They can be used to buy postage for anywhere in the world, not just to reply to the country they have been sent from. Key features: Send coupons for exchange to any country except Taiwan Exchange coupons for actual postage Use coupons to purchase postage for anywhere in the world The current version of the International Reply Coupon has an expiry date of 31 December 2006. After this date, International Reply Coupons with this expiry date can no longer be exchanged for postage. A new version of the International Reply Coupon with an expiry date of 31 December 2009 is available from post office branches from 31 July 2006. 11.3 22

Despatching the goods internationally Depending on what you require many courier and delivery companies will offer a service that will meet your needs and you should contact them directly for details of their services and prices. Royal Mail does offer some specific services that are suitable for low-volume mailings and fulfilment, e.g. Airmail Small Packets and Prepaid Airpacks This convenient and economical service for goods, gifts and commercial samples offers savings against Airmail Letter rates with worldwide coverage, (a surface mail service is also available). Maximum weight is two kilograms (apart from Saudi Arabia, one kilogram). A letter, invoice or other document can be enclosed if it relates to the contents of the packet. Delivery is within the same timescales as those for Airmail Letters. Alternatively, you can purchase prepaid Airpacks, especially designed for use with the Small Packet Service, at any post office or by mail order from Royal Mail, Tallents House, 21 South Gyle Crescent, Edinburgh, EH12 9PB, or from the shop at www.royalmail.com. Airpacks come in two sizes (C3 and C4) and prepaid up to 500 grams and 300 grams respectively. International Signed For Similar to the domestic product but you have the choice of sending your item by Airmail or Surface mail. A signature will be taken for your item on delivery at its destination. Key features: Choose to send your item via Airmail or Surface mail Delivery to just about anywhere in the world Signature taken on delivery at destination How to find out more information Royal Mail latest specifications and prices for all Royal Mail products and services including a definitive document library. Also has links to research and data etc. on direct mail. www.royalmail.com Postcomm the economic Regulator of Postal Services. Lists and contacts of all licensed operators as well as market data, details of Royal Mail s licence and obligations and consultations on every aspect of the postal market for redirections through to Royal Mail s price control. www.postcomm.gov.uk 11.3 23

Postwatch the consumer watchdog for postal services. Focus is primarily consumer but does also cover business. Has a different perspective to Postcomm, representing the users of mail. www.postwatch.co.uk Direct Marketing Association the DMA represents nearly 1,000 users of direct marketing and the website has information on all aspects of direct marketing ranging from legislation to research. The site also allows you to search for DMA members offering a specific service. www.dma.org.uk Mail Consolidators Association mailing houses that specialise in consolidating international traffic. www.themca.org.uk QMP an accreditation scheme for mailing houses including facility to search for particular services or by geography. www.qmp.org.uk 11.3 24