Service perceptions key to future of UK postal market

Three quarters of Royal Mail business customers say they would move some or all of their business if a competitor offered equivalent service quality at a 5% discount, but 82% believe that Royal Mail’s service is better.

The findings reveal that although caution is prevalent in the business mail market, volume might quickly find its way to alternative suppliers if the general perception of the services levels offered by the private sector improves.

In addition, Postcomm’s 2005 Business Customer Survey revealed that only half of Royal Mail users are happy with the state-owned company and 20% expected its introduction of size-based pricing to increase their use of alternative operators.

Although only 7.6% of respondents used an alternative supplier, they reported similar price and service quality scores to Royal Mail and are intending to marginally move more business to them. Twenty-five per cent plan to switch more business and 12% plan to switch back to Royal Mail.

Postcomm highlighted its unhappiness with the level of customers’ awareness of the competition timetable and of alternative suppliers.

Postcomm chairman Nigel Stapleton said: “The lack of knowledge — particularly among small firms — is disappointing, and something we are addressing along with Postwatch, the consumer group, to raise awareness across the UK.”

Of 300 business mailers surveyed, more than 80% favoured competition. Their annual mail spend ranged from £5,000 to over £500,000.