Tag: UK

Royal Mail evidence to the independent review of the postal services sector

Posted by | May 20, 2008 | |

Royal Mail has now submitted its second set of evidence to the Independent Review of the UK Postal Services Sector. The company’s submission is outlined in the letter below, which was sent yesterday, along with its evidence, to Richard Hooper CBE at the Review Panel. The Management Summary is also attached.

Dear Richard

We are pleased to submit our second set of evidence for the Independent Review of the UK Postal Services sector. As you know, Royal Mail and its people believe passionately in the one-price-goes anywhere Universal Service at the heart of a vibrant UK postal market – and your review will be central in determining whether it can survive. The Universal Service connects us all together, it creates the opportunity for businesses to connect to each other and to consumers, it allows everyone to participate in the growing internet economy no matter where they are. It is literally part of the social fabric of this country and preserving it is not just an important priority but an essential one.

The Universal Service is, however, now in the red for the first time, having made an estimated loss last year of around GBP 100 million. We therefore wholeheartedly agree with the sentiment expressed in the Review Panel’s first report earlier this month “that the status quo is not tenable”. The Review Panel’s first report makes clear that a key part of the problem is the way in which the industry is regulated: the current regime was designed for a market in which volumes continue to rise yet the reality is that the overall UK postal market is declining, Royal Mail’s ability to compete with other mails operators is severely limited by regulatory constraints, and mail is increasingly competing with other communications media including broadband. It is clear that the postal services industry is not adequately responding to the fundamental market decline as the internet economy grows, and we agree with the Review Panel’s view set out in their interim report, “that the way in which the postal sector is regulated will need to change”.

Our firm belief is that a healthy, efficient and profitable Royal Mail is critically important for the future of the Universal Service and for the industry as a whole. Our Shareholder has given us support and investment over the last few years but we recognise that Royal Mail must do all it can to accelerate its transformation plan and take radical action to modernise and reduce costs in order to underpin the Universal Service in a declining market. As you have already concluded in your initial response, the overriding criterion is to “ensure that a universal service is sustainable” which is underpinned by five criteria:

• A high standard of service for customers
• An appropriate regulatory regime to protect customers where barriers to entry mean that there is limited competition and choice
• A regulatory framework which encourages fair and innovative competition where no barriers exist
• A stable financial future for Royal Mail
• The incentive for Royal Mail to modernise its operation, making it much more efficient, and change its culture

Royal Mail wants to ensure that there is a clear, deliverable and sustainable solution to the issues facing the postal industry and it is our hope that all stakeholders commit to delivering it quickly. Royal Mail believes that the solution has 13 key elements which, if implemented, would secure the Universal Service and help create a vibrant future for postal services within the wider communications market:

1. Royal Mail accelerating the pace of our cultural and operational transformation in a declining market.
2. The Universal Service confirmed as a high-quality, six-day, first and second class service which is geographically uniformly priced with existing high quality of service targets.
3. The Universal Service comprising stamp mail with product and price regulation for stamp and meter mail only to allow Royal Mail to continue to champion

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Postcomm hold open meeting on postal strikes (UK)

Posted by | May 19, 2008 | |

On 14 May, Postcomm held an open meeting ‘After the Postal Strikes’ to hear evidence on Royal Mail’s application for suspension of the ‘c factor’ adjustment (restrictions on the level by which Royal Mail can raise prices if service quality is not met) and the bulk mail compensation scheme, following industrial action last year.

Postwatch presented a number of areas in the application which Postcomm should investigate further, including whether:

– the whole of quarter 3 (from 3 Sept to 2 Dec) should be included in the application.
– recovery periods, following industrial action, within the application are reasonable.
– claims for unofficial industrial action should be included.

Postcomm have invited further written evidence by any interested parties on the impact of industrial action and Royal Mail’s application to be submitted by the end of May.

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Customers ready to pay for first class post (UK)

Posted by | May 19, 2008 | |

Residential customers would rather pay a premium for next-day postal delivery than see standards fall, according to Postwatch.

In its latest evidence to the independent review of the impact of competition on the postal market, the consumer watchdog said users were opposed to any move away from the one-price-goes-anywhere service.

Under the terms of the universal service obligation, Royal Mail has to offer one delivery a day to every address in the UK, six days a week. The way this is paid for became a pressing issue this month when Royal Mail estimated the service made a loss of about GBP 100m last year.

Postwatch chair Millie Banerjee said today: “Postwatch is a keen supporter of a sustainable universal postal service which meets the needs of senders and receivers.

“We are acutely aware that declining mail volumes and the recent announcement by the Royal Mail that the UPS has become loss making gives customers real cause for concern about the future of the service they value.”

Included in Postwatch’s submission are the results of research carried out on its behalf among residential customers, small businesses and bulk mailers.

The research found that while the existing universal service obligation met users’ needs, many said some areas could be improved, including reliability and speed of delivery. Residential customers wanted deliveries six days a week while businesses were unconcerned whether they were made five or six days a week.

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Postwatch’s evidence to the Independent Review of the Postal Market

Posted by | May 19, 2008 | |

Postwatch, the watchdog for postal services, has today submitted to the Independent Review Panel answers to forty questions principally relating to the provision of the universal postal service (UPS). Postwatch also submitted and published the research it commissioned about the value of the universal service to customers.

Millie Banerjee, CBE, Chair of Postwatch said: “Postwatch is doing all it can to help the Independent Review Panel come forward with recommendations that overtly take account of customer needs. Postwatch is a keen supporter of a sustainable universal postal service which meets the needs of senders and receivers. We are acutely aware that declining mail volumes and the recent announcement by the Royal Mail that the UPS has become loss making give customers real cause for concern about the future of the service they value.”

Postwatch’s research is wide ranging and assesses; whether the current universal service fulfils customer needs and expectations, the sustainability of the universal service in the light of market changes; and alternative mechanisms for funding the universal service.

A summary of the research into the User needs of the Universal Service is attached at the end of this release. The main points from the customer perspective being:
• Next day delivery, reliability (in terms of published performance target being met) and deliveries to the door are valued;
• The frequency of collections should be included in the UPS but no strong preference for more than 5 days a week;
• Strong support for one price goes everywhere postage and recognition that current postage prices are affordable; and
• Homes but not all businesses value 6 deliveries a week.

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Royal Mail and Vialuna launch dialogue mail to help businesses develop deeper customer relationships

Posted by | May 19, 2008 | |

Royal Mail is continuing to support the direct marketing industry in an increasingly competitive advertising landscape by launching “Dialogue Mail”, an innovative customer relationship management solution combining traditional direct mail with digital media.

In partnership with dialogue marketing specialists, Vialuna, Royal Mail now offers an integrated solution that will enable brands to have more in-depth and engaging conversations with prospects or existing customers.

Dialogue Mail capitalises on the power of direct mail to drive customers online. Recent Royal Mail research revealed that over half (55 per cent) of consumers prefer to be contacted by a combination of DM and online and that integrating digital advertising with direct mail campaigns can increase customer spend by almost 25 per cent.

The Dialogue Mail journey begins with an intrigue-based mailshot designed to pique recipients’ interest and direct them online. Vialuna’s technology creates personalised URLs, meaning the campaign is individually tailored to each customer. The interactive microsites can be designed to allow customers to share their preferences, request specific products or information and fundamentally direct their overall customer journey.

Crucially, all interaction is captured allowing the brand to learn more about individual’s behaviour and shape future communications to make them more relevant. Vialuna’s Dialog Engine tracks campaign responses and delivers lead alerts directly to sales teams in real-time.

Dialogue Mail is the latest concept in a series of innovative direct mail solutions from Royal Mail designed to help businesses win customers, build loyalty and enhance their brand through the post. The CRM-focused proposition complements Personalised Integrated Media and Sensory Mail, both launched last year, to make direct communications more engaging.

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