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Are postal prices making businesses feel second class?

April 30, 2012 by James Harris

If there were queues at your local Post Office last week, this is why: Royal Mail’s much-talked-about prices increases came into force today. The price of a first class stamp is up 30%, from 46p to 60p. Second class stamps have rocketed by an inflation-busting 38% - from 36p to 50p.

The most obvious and immediate effect of the price rise has been stamp stockpiling. But perhaps more worryingly, research conducted by Pitney Bowes suggest that 81% of small and medium-sized companies think today’s postal rate change will have a negative impact on their business.  Of these, 7% say that they fear their business may not survive the threat.

Going second class?

The research, conducted amongst 1,000 businesses, found that 15 per cent of companies would consider moving to a franking machine to avoid the price hike. However, almost half claimed they will be sending less post, or swapping postal communications for email. And 25% reckoned they’d switch to second class more often in an effort to save cash.

Given the widespread news coverage and controversy over the new prices, it’s perhaps surprising to see the research reveal that many businesses were entirely unaware of the changes.  Almost three quarters (69%) of those polled said that advance information provided to them was ‘poor and confusing’, and they were not aware that the changes would be so significant.

Stamp out any panic

So, how prepared are you for the new postal rates? Well, it doesn’t spell disaster just because you’re not sitting pretty on thousands of stamps. “It’s important that businesses don’t panic and abandon physical mail in a bid to avoid high postage rates,” reckons Phil Hutchison, marketing director of Pitney Bowes UK.

He says that while email has a part to play, an envelope sent through the post is still a compelling proposition: “Successful customer communications depend on a delicate balance of message, medium and timing. Although digital communications undoubtedly have their place, traditional print campaigns are still critical for most businesses and are likely to remain so for many years to come.”

Tweak your postage habits

You may be able to reduce the impact the rate change has on your company by making small changes to how you use the mail. Shifting to a franking machine can save you a significant amount of cash – in some cases, bulk discounts can be more than enough to offset the increased price of stamps.

There are other benefits to using a franking machine too. You can add your logo to the top right of every envelope you send, reinforcing your company identity and perhaps increasing the number of people who open your mailings.

If you’d rather stick with stamps, take a close look at how Royal Mail charges for different envelope sizes. If you fold your documents into letter format, you can cut the cost of first class postage from 90p to 60p.

For more help dealing with the postage increase, you can check www.ratechange.co.uk, where Pitney Bowes has published advice.

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